Annual Report • Apr 1, 2011
Annual Report
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HAMBURGER HAFEN UND LOGISTIK AKTIENGESELLSCHAFT Annual Report 2010
| HHLA Group | |||||
|---|---|---|---|---|---|
| in € million | 2010 | 2009 | Change | ||
| Revenue and earnings | |||||
| Revenue | 1,073.1 | 990.7 | 8.3 % | ||
| EBITDA | 306.9 | 277.5 | 10.6 % | ||
| EBITDA margin in % | 28.6 | 28.0 | 0.6 pp | ||
| EBIT | 192.9 | 160.2 | 20.4 % | ||
| EBIT margin in % | 18.0 | 16.2 | 1.8 pp | ||
| EBIT from continuing activities 1 | 190.7 | 177.7 | 7.3 % | ||
| EBIT margin from continuing activities in % | 17.8 | 18.0 | - 0.2 pp | ||
| Profi t after tax | 113.9 | 89.1 | 27.8 % | ||
| Profi t after tax and minority interests | 76.2 | 53.0 | 43.7 % | ||
| Balance sheet and cash fl ow statement | |||||
| Total assets | 1,715.1 | 1,590.5 | 7.8 % | ||
| Equity | 567.0 | 637.0 | - 11.0 % | ||
| Equity ratio 2 in % |
33.1 | 40.0 | - 6.9 pp | ||
| Cash fl ow from operating activities | 206.9 | 193.2 | 7.1 % | ||
| Investments | 173.8 | 159.7 | 8.9 % | ||
| Employees | |||||
| Employees as of 31.12. | 4,679 | 4,760 | - 1.7 % | ||
| Performance data | |||||
| Container throughput in thousand TEU | 5,844 | 4,913 | 19.0 % | ||
| Container transport 3 in thousand TEU |
1,696 | 1,500 | 13.1 % |
| Port Logistics subgroup 4, 5 | Real Estate subgroup 4, 6 | |||||
|---|---|---|---|---|---|---|
| in € million | 2010 | 2009 | Change | 2010 | 2009 | Change |
| Revenue | 1,044.1 | 962.9 | 8.4 % | 34.0 | 32.7 | 3.8 % |
| EBITDA | 290.1 | 261.1 | 11.1 % | 16.8 | 16.4 | 2.2 % |
| EBITDA margin in % | 27.8 | 27.1 | 0.7 pp | 49.5 | 50.2 | - 0.7 pp |
| EBIT | 179.9 | 147.7 | 21.8 % | 12.7 | 12.3 | 3.2 % |
| EBIT margin in % | 17.2 | 15.3 | 1.9 pp | 37.4 | 37.6 | - 0.2 pp |
| EBIT from continuing activities 1 | 177.7 | 165.1 | 7.6 % | 12.7 | 12.3 | 3.2 % |
| EBIT margin from continuing | ||||||
| activities in % | 17.0 | 17.2 | - 0.2 pp | 37.4 | 37.6 | - 0.2 pp |
| Profi t after tax | 107.6 | 82.8 | 30.0 % | 4.8 | 6.1 | - 20.8 % |
| Profi t after tax and minority interests | 69.9 | 46.7 | 49.6 % | 4.8 | 6.1 | - 20.8 % |
| Earnings per share in €/share 7 | 1.00 | 0.67 | 49.3 % | 2.34 | 2.34 | 0.0 % |
| Dividend in €/share 8 | 0.55 | 0.40 | 37.5 % | 1.20 | 1.00 | 20.0 % |
EBIT without one-off restructuring effects of CTL (previous year: CTL and combisped)
Equity ratio in 2010 after a reclassifi cation from minority interests to fi nancial liabilities
3 The transport volume was fully consolidated 4
Before consolidation between subgroups 5 Listed A shares
6 Non-listed S shares
Basic and diluted
8 2010: Dividend proposal
HHLA's container terminals link ships and rail networks together 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 Europe. Technical innovations and automated work processes enable a level of productivity which sets both national and international benchmarks. With its Container Terminal Odessa (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.
Revenue in € million
332
282
| in € million | 2010 | 2009 | Change |
|---|---|---|---|
| Revenue | 605.3 | 561.6 | 7.8 % |
| EBIT | 155.7 | 149.6 | 4.1 % |
| EBIT margin in % | 25.7 | 26.6 | - 0.9 pp |
| Employees as of 31.12. |
2,891 | 2,961 | - 2.4 % |
| Container throughput in thousand TEU |
5,844 | 4,913 | 19.0 % |
HHLA Intermodal offers a comprehensive transport and terminal network for containers. While the Intermodal companies create high-performance rail links between ports in Northern Europe and their hinterland, a growing number of inland terminals provide the high service quality demanded by maritime logistics in hinterland regions as well. The market leader Metrans links the Czech Republic, Slovakia, Hungary and Slovenia with the German seaports, while Polzug Intermodal focuses in Poland and the CIS. Meanwhile, TFG Transfracht is a market leader in Germany and also serves Switzerland and Austria. The container forwarder CTD operates truck services in the metropolitan areas of major German cities and over long distances throughout Europe.
06 07 08 09 10
370
277
317
1
| in € million | 2010 | 2009 | Change |
|---|---|---|---|
| Revenue | 317.3 | 277.3 | 14.4 % |
| EBIT | 24.8 | 4.4 1 | 462.6 % |
| EBIT margin in % | 7.8 | 1.6 | 6.2 pp |
| Employees as of 31.12. |
777 | 751 | 3.5 % |
| Container transport in thousand TEU |
1,696 | 1,500 | 13.1 % |
incl. one-off restructuring effect amounting to € 17.5 million
HHLA Container segment Port Logistics subgroup HHLA Logistics segment Port Logistics subgroup
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. With 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 all around the world.
| in € million | 2010 | 2009 | Change |
|---|---|---|---|
| Revenue | 120.4 | 114.9 | 4.8 % |
| EBIT | 6.2 | 8.2 | - 25.0 % |
| EBIT margin in % | 5.1 | 7.2 | - 2.1 pp |
| Employees as of 31.12. |
441 | 475 | - 7.2 % |
HHLA Real Estate boasts a broad portfolio of services, from project and property development to district management and active urban redevelopment. At the heart of its activities 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 warehouse complex – which is designated as a historical landmark – attracts tenants from the media, 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.
| in € million | 2010 | 2009 | Change |
|---|---|---|---|
| Revenue | 34.0 | 32.7 | 3.8 % |
| EBIT | 12.7 | 12.3 | 3.2 % |
| EBIT margin in % | 37.4 | 37.6 | - 0.2 pp |
| Employees as of 31.12. |
38 | 40 | - 5.0 % |
We are one of Europe's leading port logistics groups. With our Container, Intermodal and Logistics segments, we are vertically aligned along the entire transport chain. Effi cient container terminals, high-performance transport systems and comprehensive logistics services form a complete network between the international port and the European hinterland. Our environ mentally friendly logistics chains support global economic developments and draw on our strengths: moving, networking and developing.
Moving Networking
10 Hamburg: the logistics hub
13 Permanently connected
18 A transport chain for Europe
21 The industrialization of the transport chain
22 Deichmann chooses rail
High-tech climate protection
Planning, controlling, programming
Highlights of 2010
Klaus-Dieter Peters Chairman of the Executive Board
After correcting its revenue forecast upwards several times during the course of the year, Hamburger Hafen und Logistik AG (HHLA) fully met these expectations in the 2010 fi nancial year and even slightly exceeded its earnings forecast. At the same time, we made signifi cant progress with important forward-looking measures and initiated new projects. These included systematically further extending our European network for hinterland transport and increasing the number of mega-ship berths we can offer in Hamburg.
Overall, 2010 was a very pleasing year for our company. This is illustrated not only by the gain in market share brought about by an aboveaverage growth in container handling volumes. As our net profi t for the year after minority interests also experienced a disproportionately high increase, the Executive and Supervisory Boards of HHLA will be able to propose at the Annual General Meeting on 16 June 2011 an increase of around 40 percent in the dividend. This will mean paying out € 0.55 per market-traded share in the Port Logistics subgroup entitled to dividends. We paid out € 0.40 per share during the 2009 crisis.
There are various reasons behind our company's fast and strong recovery:
I The Port of Hamburg's main customers include economic regions whose foreign trade or economic performance was particularly hard hit by the crisis. As a consequence, the strong revival in China's foreign trade and the upturn in many Central and Eastern European economies prompted a strong recovery in handling and transport demand in Hamburg.
The macroeconomic environment was therefore much more favourable than during 2009. However, we were also able to capitalize on these parameters so successfully because we consistently enhanced our effi ciency and performance during the crisis. The steps taken included:
By taking these steps in 2010, we consistently further pursued our strategy of vertical integration along the transport chain between the international port and clients in the European hinterland. This has had a positive effect on business developments at HHLA and beyond. As HHLA's European transport network is geared towards intermodal transport using rail, the company is playing a major role in helping Hamburg to keep expanding its role as the leading European rail port. We have succeeded in continuously upping the proportion of rail transport in recent years. Rail services already account for well over 70 percent of transport on long-distance routes and no less than 98 percent of journeys to Austria. This is a signifi cant achievement as regards climate and environmental protection, but rail transportation also offers considerable growth potential for the future, a capacity which road haulage no longer has.
As ships continue to grow larger and larger, port lay time is becoming increasingly important. Container mega-ships are particularly susceptible to losing some of their cost advantages if they are laid up in port for longer periods of time due to growing throughput volumes. Here, too, we are well equipped: our container terminals' throughput per hour of ship's lay time – the key productivity indicator for our clients – is constantly improving. Both Burchardkai and Altenwerder set new records in 2010, all of which further strengthens their leading positions in Europe. The high performance and reliability of our Hamburg terminals thus play an important role in making the Port of Hamburg an attractive option. This is even more signifi cant at present, as the delay in dredging the river Elbe's shipping channel is currently restricting capacity utilization on large container ships.
Our employees are key to our company's performance. During the year under review, their dedication and fl exibility once again made a crucial contribution towards our ability to successfully master the ever-growing demands of the maritime logistics sector. With our "Secur-
ing the Future" project, we succeeded in safeguarding jobs during the crisis and simultaneously improving our staff's skills. More than 400 employees in Hamburg took part in the incentive, which offered an attractive combination of short-time working hours and qualifi cation measures.
Having successfully overcome the 2009 crisis and recorded a strong recovery in the 2010 fi nancial year, our company is in a good position for further development. Although growth can be expected to become weaker as the year progresses, and pent-up demand gradually ebbs away, we expect to see an increase of around 10 percent in our transport volumes in 2011. This is based on current forecasts for the coming year, which predict growth of 5 to 6 percent in container traffi c via the North European seaports. As competition remains intense, we are setting ourselves the ambitious target of achieving growth in revenue matching that of volumes, and at the same time, to increase our EBIT margin as a result of the improved capacity utilization of our facilities and systems.
We took action in 2010 to continue on our successful business path. One of our key projects here was transferring the successful business model used for transport routes in South-Eastern Europe to other regions. As part of this initiative, we will open additional inland terminals which meet the needs of maritime logistics and extend our system of shuttle train links. HHLA will therefore open new inland terminals in Poland and the Czech Republic in 2011. In June 2010, HHLA and Eurogate established the joint venture IPN Inland Port Network. Its aim is to improve links between our main market of Germany and the Port of Hamburg in the future. The joint venture is currently preparing to establish a network of high-performance inland terminals in Germany. This new network will offer much more favourable conditions for stepping up the use of shuttle connections.
To further improve transport for the "last mile" between inland terminals and customers' premises, the HHLA subsidiary CTD and EKB, a transport company from Bremen, established the joint venture CIT Container Inland Trucking in July 2010. CIT will develop a comprehensive, road-based delivery network for inland terminals in Germany.
We also launched important forward-looking projects in our Container segment last year. First and foremost, this meant continuing with the modernization programmes at our Hamburg container terminals. The focus of this work is on Burchardkai. Over the coming years, the terminal will gain additional mega-ship berths to cater for demand, along with a new, state-of-the-art block storage system for container storage. This is a further reminder of how valuable our fl exible extension programme for our facilities is, as it allows us to adjust the type and pace of improvement work to actual developments in demand. We also initiated a major project for the future at our Container Terminal Odessa in 2010. The prime objectives of this extension project are to signifi cantly improve handling conditions for large vessels and to ramp up capacity. By 2012, the work to enlarge the existing terminal will have created deep-water berths and considerably increased the area of the terminal.
Having successfully overcome the 2009 crisis and experienced a fast and strong recovery in 2010, our company is now ideally prepared to master current and future challenges and to realize its opportunities for sustainable growth. As we move forward, we can draw on our wellestablished strengths:
With this combination of strengths, we fulfi l our corporate responsibility. This is ensured by our long-term, sustainable strategy in which efforts to fulfi l economic, social and ecological objectives complement each other. On this basis, we will continue to pursue a future-proof success path.
Yours, Klaus-Dieter Peters Chairman of the Executive Board
1 Klaus-Dieter Peters First appointed on 1 January 2003
First appointed on 1 May 1996
I Information systems
Responsibility
3 Heinz Brandt First appointed on 1 January 2009
Responsibility
I Internal audit
I Real Estate segment
HHLA keeps global goods fl ows moving 24 hours a day, 7 days a week. The very latest technology, the courage to innovate and the company's extensive expertise all ensure the utmost in effi ciency and performance. As a result, HHLA's terminals and transport networks defi ne state-of-theart maritime logistics.
Straddle carriers transporting a container at the HHLA Container Terminal Burchardkai.
There are more than 10,000 nautical miles between China and Europe, between Ningbo on the Chinese coast and the Port of Hamburg. This is the diary of a journey. It is the story of how Europe's largest shoe retailer, Deichmann, sends its latest collection of men's, women's and children's shoes on a voyage across the seas to Europe, and how HHLA links global transport chains with its modern container hub in Hamburg.
Hamburg, 10 December 2010, 7.45
a.m. At fi rst light, the outline of a giant emerges just beyond the suburb of Wedel on the river Elbe. 51 metres wide and almost 366 metres long, the Christophe Colomb operated by French shipping company CMA CGM is sailing up the river Elbe. It is one of the largest container ships in the world. Captain Pascal Jean Auvet makes the fi nal preparations to enter the Port of Hamburg.
Five weeks earlier – Ningbo in China, 7 November, 11.30 a.m. The bright blue side of the CMA CGM Christophe Colomb towers above the quay at the Chinese Port of Ningbo. The last box of
goods for Europe has just been loaded – including container CMAU 146090-0, packed to the brim with the latest collection of men's, women's and children's shoes for the Deichmann branch at Mariahilferstrasse 41 in Vienna, among others. Europe's largest shoe retailer, Deichmann, manufactures its shoes all around the world and has a major production facility in the city of Wenzhou in China. Almost as soon as the Deichmann shoes had rolled off the conveyor belt and been packed, container CMAU 146090-0 was transported from Wenzhou to Ningbo – more than 200 kilometres away – before being loaded onto the Christophe Colomb. Container ships
CMA CGM Christophe Colomb entering the Port of Hamburg.
One of the manufacturing facilities used by Deichmann – Europe's largest shoe retailer – is located in the Chinese city of Wenzhou. There, the shoes are packed into containers and transported 200 kilometres by rail to the port of Ningbo. They are then loaded onto a container ship before embarking on a voyage to Europe, some 20,000 nautical kilometres away. The Asia–Europe service FAL 5/ AE8 operated by the shipping companies CMA CGM and Maersk completes this journey in about fi ve weeks.
such as the Christophe Colomb are crucial to global trade, carrying heavy loads along fi xed routes to tight schedules. In 2010, CMA CGM and Maersk set up a new liner service, the FAL 5/AE8, linking Asia's fast-growing economies with Northern Europe. The service is operated by container ships with a capacity of up to 14,000 standard containers (TEU). The sea route from Ningbo to Hamburg – the Pacifi c to the North Sea – is around 20,000 kilometres long.
Suez Canal, 28 November, 0.57 a.m. At a speed of around 7.5 knots, the mighty Christophe Colomb forges its way down Egypt's Suez Canal, which stretches more than 160 kilometres. It is the world's most important shipping route, linking the Mediterranean Sea with the Red Sea and making it unnecessary for vessels to travel all the way around the African continent, which would add about seven days to the voyage from Asia to Europe.
Hamburg, Burchardkai, 29 November, 8.00 a.m. HHLA shipplanner Sven Merzlanovits can monitor all the containers stacked on the Christophe Colomb on the screen in his offi ce at the Container Terminal Burchardkai (CTB). Red, green, blue, yellow – the colourful containers are piled up in such a way that they can be lifted off the ship in Le Havre, Rotterdam and Hamburg without any timewasting restowing. The containers destined for Hamburg are highlighted blue.
The container ship CMA CGM Christophe Colomb (front) shortly before it berths at the HHLA Container Terminal Burchardkai in Hamburg.
They include container CMAU 146090-0, which holds some 5,000 pairs of shoes due to arrive at the Deichmann stores in Austria in time for Christmas. "Of course, ships with a capacity of 14,000 standard boxes pose a particular challenge for the shipping companies and us terminal operators," explains Merzlanovits. Long before the Christophe Colomb reaches Hamburg, the qualifi ed industrial engineer starts working with CMA CGM on the logistics of unloading and loading the containers at HHLA's terminal. These days, transport chains are planned in minute detail, carefully coordinated and fi nely tuned.
lowing a stop-off at the French Port of Le Havre, the Christophe Colomb casts off from the quay wall. Merzlanovits starts clarifying the fi nal details for the container handling in Hamburg. At the same time, he plans the loading of the ship at the Port of Hamburg. His plans have to take into account stowing instructions from the shipping company CMA CGM. The shipplanner uses a planning software to work out on his computer screen exactly where each container should be stacked on the ship. You could call it the maritime transport chain's answer to Tetris. Meanwhile, the relevant shift manager at Burchardkai calculates the optimum number of container gantry cranes to use.
8.45 a.m. The sound of a 108,000 hp diesel engine throbs through the hull of the Christophe Colomb. Tugs help the Christophe Colomb to berth at the new berth at Burchardkai. Crane operators, crane supervisors, checkers and lashers – who secure (lash) and release containers – all prepare to work on the ship. In the control centre at Burchardkai, the shift manager, process controllers and online planners all start their jobs on the computer screens. At the same time, HHLA's straddle carrier drivers climb into their 15-metre-high vehicles at the terminal. A gigantic, carefully coordinated handling apparatus gears up, ready for action.
Burchardkai, 9.00 a.m. Shipplanner Merzlanovits climbs up the gangway to the Christophe Colomb. Together with Chief Mate Julien Rodrigues Genest, he checks whether the proposed stowage plan can be implemented. About
Industrial engineering graduate Sven Merzlanovits (on right, speaking with a ship's offi cer) is a shipplanner at the HHLA Container Terminal Burchardkai (CTB). Merzlanovits talked to us about how to perfectly stack thousands of brightly coloured containers, the networking of port operations and the impact of high tech on maritime logistics.
Being a shipplanner is a very international job because many of the shipping companies we work for are based abroad and the ships' crews usually come from all over the world. You come into contact with totally different ways of thinking. Constantly working together to manage the handling of container ships is what makes this job so appealing.
First and foremost, a shipplanner is responsible for drawing up stowage plans for container ships. As soon as we receive comprehensive data about the cargo along with stowage instructions from the shipping companies, we draft a stowage plan for the container ship with the help of our modern planning software. At the same time, we have to optimize the logistics processes at the container terminal.
The whole ship handling process has changed with the advent of modern IT systems and increasing vessel sizes. We now focus more than ever on logistics at the container terminal and on the perfect interplay between all systems involved in ship handling – such as container gantry cranes, straddle carriers and storage blocks.
For instance, by ensuring that the uppermost container on a stack is the fi rst one that needs to be transported to the ship and loaded, rather than the one right at the bottom. The correct order is hugely important in ship's planning as it allows us to prevent time-consuming restacking manoeuvres.
We shipplanners always have to think and work with a view to the whole. We are involved in planning and logistics – but we are also in personal contact with many other players, such as shipping companies, ships' crews, shipping agents and even the harbour police. Our role couldn't be more pivotal.
30 minutes later, Merzlanovits drives across Burchardkai back to the terminal building in his red VW Fox. The container handling starts. "Even though I've been doing this for years, I'm always fascinated when everything dovetails smoothly," says the shipplanner.
Burchardkai, 12.14 p.m. Sleet batters against the windows of the crane's glass cabin. The steel legs of container gantry crane no. 28 tower 49 metres above the quay and the 68-metre-long booms have been extended. "Thousands of containers have to be unloaded and loaded here today," says crane operator Soenke Greve. He is on the early shift, driving one of seven container gantry cranes being used to dispatch the Christophe Colomb's cargo since 9.00 a.m. Precision is crucial. The huge ship is due to leave Hamburg again the very next day.
The operator of a container gantry crane unloading the containers.
Burchardkai, 12.15 p.m. Greve pushes the joystick in front of him forwards and the cabin slowly glides along the boom, passing over a mountain of containers. Greve's container gantry crane can lift four standard containers at once – a total weight of 120 tons. That is a recordbreaking capability. To cope with the latest generation of container ships, HHLA has equipped a berth at Burchardkai with
Europe's most high-performance container gantry cranes.
Burchardkai, 12.16 p.m. A small computer screen in the crane's cabin tells Greve which of the brightly coloured containers he has to lift off the deck of the Christophe Colomb. Greve looks through a window in the fl oor of the cabin, slowly lowers the spreader – which itself weighs tons – and
Containers are deposited on the quayside before straddle carriers take them to the yard.
locks on to container CMAU 146090-0 in bay 57 of the Christophe Colomb. There is a muffl ed sound. Greve heaves the box up off the pile. If the crane supervisor gives him the green light, Greve can set the container down on the quayside. Then he can pick up the next box.
Burchardkai, 12.16 p.m. Several hundred metres away, process controller Manfred Fuß is in the control centre, monitoring the unloading of container CMAU 146090-0. Once Greve has set the box down on the quayside, it fl ashes on the surveillance monitor. HHLA has invested in a new integrated terminal operating system at Burchardkai known as ITS. As well as enabling staff to monitor handling in real time, it steers the automatic stacking of the containers in the modern storage block at the terminal. ITS makes sure that all the systems involved in container handling can be optimally linked together and controlled. From his desk in the control centre, Manfred Fuß works closely with the online planners during the container handling. The online planners ensure that the container gantry cranes are used effi ciently to handle the ship's cargo. Thousands of containers have to be unloaded and loaded without the cranes getting in each other's way.
Burchardkai, 12.17 p.m. As soon as the box was set down on the quayside, Ulf Niekrenz automatically received a transport job order. He drives a 60-ton straddle carrier to container gantry crane no. 28 to pick up the box.
Burchardkai, 12.20 p.m. Niekrenz leaves container CMAU 146090-0 in the drop-off lane of the storage block. 5,000 pairs of shoes for the Deichmann stores in Austria have completed the fi rst stage of their journey to the European hinterland. The computer-controlled rail-mounted gantry cranes at the fully automated yard sort the container into the ideal interim storage position prior to its ongoing journey. The timetable for the rest of its journey has already been set. It will be transported by rail to the Czech city of Prague, then on to Dunajská Streda in Slovakia before arriving in the Austrian stores of Deichmann.
The mooring gang release the mooring lines at Burchardkai. The Christophe Colomb sails down the river Elbe towards the North Sea with new cargo bound for Asia.
Economic expert Prof. Michael Bräuninger from the Hamburg Institute of International Economics (HWWI) believes there is signifi cant growth potential for maritime logistics in Hamburg. His assessment is based on the tremendous backlog demand in Eastern Europe and the high level of service offered by Hamburg-based logistics companies.
"It goes without saying that Hamburg enjoys a very favourable geographical position in terms of transport links. However, its success as the dominant port for trade between Europe and Asia rests largely on the high standards of its maritime logistics companies." For Professor Bräuninger, the logistics involved in transcontinental transport chains have long since become "a highly complex affair often underestimated by the general public". With its unrivalled breadth and level of specialization, Hamburg's "maritime cluster" is another of the city's strengths, along with the expertise and passion for innovation of its logistics companies.
However, the success enjoyed by Hamburg in recent years is also attributable in part to the markets linked via the port. In a study on the economic signifi cance of the Port of Hamburg published in 2010, the HWWI lists these as being the Far East and South America for the overseas market and
the Baltic region plus much of Central and Eastern Europe for the European market. The outcome is that: "Especially since 2000, container throughput in Hamburg has easily outpaced world trade."
"Due to their backlog demand, the economies of Eastern Europe are likely to maintain this dynamic growth in future," says Bräuninger. Hamburg is ideally positioned to benefi t from this fast rate of growth. The region's well-developed transport network – both for ships via the Baltic Sea and for hinterland traffi c by rail – provide the necessary conditions. HWWI's long-term development forecast projects growth rates of 4 percent for Eastern Europe and just over 7 percent for South-East Asia. Michael Bräuninger adds: "If the project to deepen the river Elbe is quickly implemented as announced, there is every reason to believe that container traffi c via Hamburg will continue to enjoy aboveaverage growth."
A long-legged straddle carrier setting down a container at Burchardkai.
HHLA organizes exemplary transport and logistics chains with its networks and terminals. Goods fl ows, carriers and the accompanying data are interlinked with the aid of intelligent processes. This industrialization of the transport chain reduces costs and is good for the environment. With its networks, HHLA provides the same highquality service for both maritime logistics and transport deep in the European hinterland.
HHLA GESCHÄFTSBERICHT 2010 HHLA ANNUAL REPORT
A container train from Hamburg reaches the Prague inland terminal operated by HHLA's subsidiary Metrans.
Every day up to fi ve pairs of container trains operated by the HHLA subsidiary Metrans link the Hamburg container terminals with the Czech Republic and South-East Europe. We followed the transport chain by tracing container CMAU 146090-0 and about 5,000 pairs of shoes inside it on their journey from Burchardkai to the Deichmann stores in Austria.
2010, 10.50 a.m. Metrans train 41316 from Prague has arrived on time for its fi ve-hour slot in siding 7 of the rail terminal at Burchardkai. On the fi rst fl oor of the blue, red and grey main building at the HHLA Container Terminal Burchardkai (CTB), there is a fl urry of activity in the rail cargo handling control centre. "We'll pack it to the gunwales with 60 boxes," proclaims a voice from somewhere in the cramped room, which is full of monitors, walkie-talkies, phones and a large control screen. Bernd Lentfer, Head of Hinterland Operating Administration, smiles: "The shuttle trains of Metrans are easy to
plan. All the incoming and outgoing trains are almost always full." The "60 boxes" – half 40-foot and half 20-foot containers – add up to 92 TEU in total, the global unit of measurement based on the standard 20-foot container. With this load, today's train to Prague is fully booked.
Burchardkai, 11.25 a.m. At siding 7, work is well under way, accompanied by light snow fl urries. Ten straddle carriers whizz back and forth between the imposing storage block collection points and the elongated rail terminal. They have to bring the containers exactly into position ready to be transferred to the train. Like
the platforms at many centrals stations with high-speed services, the sidings are divided into sections A to F to aid positioning. The key is for the IT system and the control centre staff to organize the discharging and loading of the train as smoothly as possible in close contact with the straddle carrier drivers. This also ensures optimum workfl ow for the drivers of the rail-mounted gantry cranes, too, huge cranes which span several sidings.
Burchardkai, 3.48 p.m. The process is running more or less perfectly today: the advance planning was good, customs had no objections, and the rail staff worked
Container handling at the Burchardkai rail terminal.
quickly. Michael Helk from the Hinterland Operating comments: "It's all going very smoothly." At 2.31 p.m., a green light fl ashes up on the surveillance monitor: container CMAU 146090-0 has been loaded on carriage 33544960171-5 in section A. By 3.21 p.m., the whole train is ready to go. At 3.48 p.m., the giant – more than 600 metres in length – slowly pulls away. At this moment, the Metrans dispatchers in Prague and logistic experts of Deichmann simultaneously receive digital notifi cation that the team at Burchardkai has once again done its job to perfection.
A container train leaving the Port of Hamburg.
Burchardkai alone dispatches 32 trains every day. Thorough preparations are needed to ensure that everything runs like clockwork. Sönke Volkmer, Managing Director of Metrans Germany, organizes the whole process. He shared with us his most important professional secret: "A good relationship with everyone involved in the transport chain is very important to us. Everyone is committed to giving their all, and we can build on that." He coordinates the shipping company, customs, the rail operator, Burchardkai, Deichmann and Metrans in Hamburg, Prague and Dunajská Streda. He has a dedicated coordinator for each container terminal in Hamburg. They are responsible for organizing the processes associated with the 1,781 Metrans train services which link Hamburg with Prague in 2010. That means as many as fi ve trains a day and up to 40 per week. In 2010, Metrans achieved record capacity utilization of almost 100 % on the Hamburg–Prague route. Volkmer is full of praise for the shoe retailer: "As far as we're concerned, Deichmann is an exemplary partner." The chain's logistics philosophy complements the Metrans concept perfectly. His monitor fl agged up the Deichmann container, CMAU 146090-0, at 12.33 p.m. back on 1 December: " Order from customer in our system". The
The route taken by Deichmann's shoes from the Port of Hamburg to the Viennese stores.
Metrans system, customs and Burchardkai are all automatically notifi ed of customer orders from Deichmann. Data is constantly updated and documents are prepared for the fi nal container handling
right up until the container physically arrives at Burchardkai. Everything goes smoothly this time for CMAU 146090-0. The customs offi cers do not carry out a spot check and the container is already on its way to Prague at 3.45 p.m. on 11 December, just over 24 hours after it arrived in Hamburg.
Děčín, freight rail terminal, 12 December 2010, 6.10 a.m. Despite diffi cult weather conditions, the journey via Magdeburg and Dresden went smoothly. At 6.00 a.m., the train stops in Děčín when the driver and chief guard reach the end of their shifts. Děčín is the fi rst Czech town beyond the German spa town of Bad Schandau on the river Elbe. Metrans trains are among the most frequent visitors to this ruggedly picturesque stretch of track that runs along the Elbe. With their solid rows of containers, they are easily identifi able from quite a distance. Metrans has its own rolling stock and uses a sophisticated logistics system that utilizes capacity to the full. This means the company can pack containers more tightly and run fuller trains than its competitors. The rail company transported more than 160,000 containers on the Hamburg– Prague route in 2010, easily exceeding its previous record dating from just 2008. The Czech economy has currently pulled out of recession. Both exports and imports are in full swing. Germany accounts for 31 percent of exports and 28 percent of imports, making it the Czech Republic's leading trade partner. 75 percent of this trade is conducted by rail – and the majority is handled by Metrans.
The weather is no better in Prague: it is still snowing lightly when Metrans train 41315 arrives at one of Europe's largest hinterland terminals. The terminal has a capacity of 15,000 containers and its railway sidings are spread across a large area, allowing ten trains to be processed at once. All the workfl ows in Prague have been carefully planned in advance, just like at Burchardkai. When the train comes to a halt on Monday morning, a feeder train is already waiting on the adjacent track. It will leave for Dunajská Streda – some 380 km away – at 12.26 a.m. The containers are transhipped directly from train to train using a rail-mounted gantry crane, ensuring a highly effi cient and
With its intelligent concept for transportation between the quayside and customers in Europe's hinterland, the rail service operated by HHLA subsidiary Metrans points the way for the future of European container traffi c.
With its bits and bytes, the digitalization of analogue media radically changed the world. However, the general public is less aware of the "digitalization" of cargo transport brought about by the humble container. With this steel box, nearly all the goods people ship can suddenly be the same shape. As a globally standardized receptacle, it prompted the industrialization of the transport chain. By signifi cantly boosting effi ciency and drastically reducing transport costs, it was the major driving force behind the current pace of globalization.
This process of industrialization is already at an advanced stage in maritime logistics, with container megaships and increasingly automated terminals like the HHLA Container Terminal Altenwerder. However, on the whole overland transport still has a long way to go. This is particularly true of long-distance transportation: far too few companies utilize the advantages of the rail system over trucks for hauling containers.
HHLA's subsidiary Metrans shows that it doesn't need to be this way. With its intermodal transport concept combining road and rail, Metrans organizes standardized transport chains between the seaport and customers' hinterland sites. End-to-end information chains form an elementary part of this system – something which even today is far from being a matter of course in transport logistics. Also critical are large-scale inland terminals which function as hubs as well as the organization of long-distance transportation via regular shuttle trains. Every day, as many as fi ve pairs of trains link the major inland terminal in Prague directly with the Hamburg container terminals. Once they arrive in Prague, goods can be shipped to the Czech Republic, Slovakia and Hungary by direct trains or trucks. The Prague terminal also serves as a buffer or temporary storage facility for goods fl ows.
It is a successful system which also has big plans for the future. Over the next few years, HHLA plans to roll out this system trialled by Metrans in Poland and Germany.
cost- effective connection. A crane operator in the cab of a rail-mounted gantry crane at the Metrans terminal in Prague.
The cargo travels as far as Dunajská Streda (Slovakia) by rail.
Dunajská Streda, 13 December 2010, 9.11 a.m. Smart and tidy, the newest Metrans terminal is located outside the old town near the Danube in the triangle formed by Vienna, Budapest and Bratislava. And it looks just as good on the ground as it does from the air. An exemplary terminal layout was used for the newbuild, which was constructed on a greenfi eld site. The area has space for 25,000 containers and the generous area surrounding the sidings allows several block trains to be processed at the same time. This terminal even grew during the recent crisis. At the very height of the recession in April 2009, Deichmann opened a new distribution centre at the terminal. Now, more than 15 percent of all the shoes sold by Deichmann in Europe
– 21 million in 2010 – pass through this site. 5,000 of them are in the box labelled CMAU 146090-0, which arrives at the terminal on this wintry Monday morning. From the train, it is taken straight to the distribution centre. Here, the 5,000 pairs of shoes are divided up into consignments for the various Austrian stores.
Vienna, Schenker site, 14 December 2010, 1.45 p.m. Deichmann uses its own distribution centre at the Schenker site by Albern Harbour in Vienna to cater for the high demand in the Austrian capital. Metrans has yet another role to play here. Peter Kiss, Managing Director of the Slovakian Metrans subsidiary, explains: "We offer a special standard of quality with our all-in-one service." This includes organiz-
ing transportation to Vienna, of course. A container with a shipment of shoes bound for Vienna is loaded up at the distribution centre and dispatched at 11.06 a.m. By 1.45 p.m., it has reached the warehouse at Gottfried Schenker-Strasse 1. Now it is just a few kilometres to the fi ve stores in Vienna.
Vienna, Mariahilferstrasse 41, 15 December 2010, 8.12 a.m. At the large Deichmann store in one of Vienna's historical shopping districts, the 21,000-kilometre journey from China comes to an end. The shelves are restocked for the fi nal phase of the Christmas rush, which is already benefi tting from the more up beat economicoutlook. It has been exactly 37 days, 20 hours and 42 minutes since the Christophe Colomb set sail from Ningbo.
The Metrans terminal near Dunajská Streda with Deichmann's distribution centre at the top left.
Europe's largest shoe retailer collaborates with HHLA's subsidiary Metrans in the fi eld of logistics: a textbook example of successful globalization.
In 2010, the family-owned company Deichmann sold almost 140 million pairs of shoes in Europe. 21 million of these were shipped via the distribution centre opened in April 2009 in the Slovakian town of Dunajska Streda near the Hungarian border. This distribution centre – the seventh and latest to be established by the Deichmann group in Europe – now serves seven countries: Slovakia, the Czech Republic, Austria, Hungary, Bulgaria, Slovenia and Romania.
Deichmann's Managing Director Karsten Schütt, Head of Logistics at the Essen-based fi rm, is delighted with the latest distribution centre: "We're achieving the same level of productivity as at our other sites and we also benefi t from the proximity to our markets." Another real advantage is that the centre neighbours the Metrans terminal with its direct links to the container terminals in Hamburg and Bremerhaven. Almost half a million shoes pass through the centre every week.
Deichmann manages all the logistics processes itself – from its factory in China to stores in Vienna, Budapest or Bratislava. An end-to-end information system accessible to all transport chain partners forms the heart of the whole logistics concept. This ensures that everyone involved is kept permanently in the loop regarding transportation status. Truckers, shipping companies, seaport terminals, rail operators and inland terminals all constantly update their data and can thus signifi cantly optimize and standardize their processes.
23
The system has proved highly successful. In recent years, Deichmann has increased capacity utilization at its distribution centres by 20 percent and established a more constant fl ow of goods to its stores. This is good news for the environment too. In 2000, 70 percent of all Deichmann shoes were shipped via Antwerp and most were then distributed throughout Europe by truck. By contrast, some 75 percent now arrive in Hamburg or Bremerhaven and most of these are then delivered to European consumers using environmentally friendly intermodal transport (long-distance rail service, truck for the "last mile").
DEICHMANN SE is headquartered in Essen (Germany). Established in 1913, it is wholly owned by the founder's family. The company is Europe's market-leading shoe retailer and employs more than 30,000 people around the world. Stores are operated under the DEICHMANN name in Germany, Bulgaria, Denmark, the UK, Italy, Croatia, Lithuania, Austria, Poland, Romania, Sweden, Slovakia, Slovenia, Spain, the Czech Republic, Turkey and Hungary. The brand will also be rolled out in Portugal and Serbia in 2011. In addition to this, the group is also represented in Switzerland, the Netherlands and the USA.
Many innovations for maritime logistics are developed by HHLA itself and undergo initial tests at the company's facilities. The staff is playing a crucial role in the Group's technological leadership. An extensive training and staff development system strengthens employees' knowledge and creativity. The result is a never-ending modernization process with practicable innovations.
Operation managers in the control centre at the HHLA Container Terminal Altenwerder.
Automated guided vehicles (AGVs) emit 30 percent less CO2 thanks to hybrid diesel-electric engines. The next generation of vehicles could be battery powered if the trial proves successful.
The rail terminal with seven sidings ensures that more goods can be transported by rail, which is better for the environment. Block container trains can be marshalled directly without shunting.
Semi-automatic double-trolley container gantry cranes have generators which recover electricity when the container is lowered, saving 20 to 25 percent of their energy needs.
The adjacent logistics centre means traffi c is reduced due to the short distances involved. Several logistics companies (such as HHLA Logistics) are establishing a freight traffi c centre nearby.
Automated storage blocks, operated by rail-mounted gantry crans, opens up new possibilities for the effi cient use of space. Only half the conventional amount of yard space is needed per container.
Technological leadership and a high level of electrifi cation are working hand-in-hand to protect the environment at the HHLA Container Terminal Altenwerder (CTA). With this winning combination, electricity from renewable sources is being used to reduce the whole terminal's carbon footprint by around 60 percent.
As well as being the world's most highly automated container terminal, Hamburg-Altenwerder can also boast the highest level of electrifi cation. This is great news for the environment, as the terminal's energy requirements – over 50 million kilowatt hour (kWh) of electricity – have been sourced entirely from renewable sources since 2010. Use of
this carbon-neutral energy source reduces the whole terminal's carbon footprint by around 60 percent. But this has not stopped the terminal from also trying to save energy: automated processes are constantly being optimized with the aid of special algorithms. Special software calculates the shortest and therefore most energy-effi cient routes
across the terminal and minimizes the stacking manoeuvres in the container store. In 2010, the "Multiple Load" project alone led to a saving of 292,000 kWh less electricity and 334,000 fewer litres of diesel being used. The initiative focused on transporting and handling two standard containers at the same time.
Intelligent controls are the most important means of making automated processes even more effi cient. Many staff at the HHLA Group all use the same tool to improve effi ciency: networked IT systems, some of which were developed in-house.
When they see that processes at the HHLA Container Terminal Altenwerder are almost fully automated, visitors often think that everything happens "as if by magic". It is true that there are only a few employees at the quayside, although more than 800 people work at the terminal. In the operations centre alone there are 150 employees, who ensure that everything runs according to the terminal's well-planned schedule. The control centre is at the heart of this complicated apparatus. It is always staffed by 15 operations managers, around the clock. The centre's large windows enable them to monitor the fl ow of hundreds of thousands of steel boxes every year and ensure that they are handled as effi ciently as possible, as planned.
Admittedly, automation with the aid of state-of-the-art IT plays a key role. However, computers are only machines l– useful tools which cannot replace experienced staff and their ability to make sound judgements, especially in tricky situations. This is made very clear by the
kind of control centres that can be found at all HHLA container terminals. Only real people can assess the current situation correctly; only they can input the necessary parameters into computers in order to react to important requirements. In the short term, this could be special customer requests or technical blips. In the long term, it means lots of little things which – when taken together – constantly optimize workfl ows. That is the reason why the terminal in Altenwerder, originally designed for 1.9 million TEU, can now handle around 1 million TEU more than this. To achieve this, IT programs were adjusted, vehicle paths were altered, and algorithms were recalculated. HHLA has a large IT department which develops its own relevant programs and optimizes the interfaces with third-party systems. This is essential because very few external specialists are really familiar with the terminals' workfl ows.
These specifi c requirements mean that new job profi les often emerge – for example in servicing and fault clearance, where highly specialist staff write their own control software. However, making intelligent use of modern IT is part of day-to-day work not only at the container terminals. Staff use IT systems and think in terms of process chains across all areas of HHLA's activities. For instance, employees at the Hansaport bulk goods handling centre monitor throughput in the control centre, dispatchers at the railway companies track each and every container on screen, and CTD has even developed special software and screens for truck drivers designed to prevent empty trips at the port.
The training provided by HHLA also takes this into account, explains Holger Jensen, Director of HHLA's own specialist college. Project management has been part of the curriculum since 2006 and the workfl ows in the transport chain are treated holistically. "Planning and control skills are become increasingly important," comments Jensen. "More and more machinery is coordinated and controlled remotely; schedules have to be drafted and optimized."
Jonas Maybaum, 24, completed his apprenticeship in port logistics at HHLA with the best score in Germany and now operates rail-mounted gantry cranes.
Jonas Maybaum is a ray of sunshine in his brand-new high-visibility jacket, his smile is almost as radiant as clothes. And that's no surprise. After achieving the best score nationwide in his apprenticeship to become a certifi ed specialist in port logistics in 2010, he has already secured his ideal job – at HHLA. "The training at HHLA is really well organized," explains Maybaum. "We were given handson experience of the work processes and the teaching was geared towards our specialisms."
He never wanted an offi ce job – his dream was to operate a rail-mounted gantry crane. He found it easy to operate the crane's joystick because he grew up with computer games. Nevertheless, the tips and tricks passed on by his experienced coaches helped him to latch onto a container from a height of over 15 metres and place the swaying box on a railway carriage. "It's the old hands who make us what we are," praises the youngster. And his work? "There's no better job out there for me," he says.
Thomas Reich, 25, didn't just complete training as a mechatronics engineer at HHLA – his professional activities are geared entirely towards the future.
Mechatronics – the combination of mechanical engineering, electrical engineering and IT – is a key 21st century technology. Thomas Reich agrees; he started training to become a mechatronics engineer in August 2003 at HHLA. But the 25-year-old didn't stop there. He wanted more: more knowledge and more responsibility. So when HHLA offered a sixmonth full-time training course in automation technology, he seized the opportunity. The course focused on stored programmable controls for machinery. Thomas Reich believes that this is what the future will be about. After all, container gantry cranes, block storage facilities and straddle carriers all need software to run. At the same time, he started a course at an evening college to become a state-certifi ed mechatronics technician. The 25-year-old takes it all in his stride: "You have to make the most of opportunities like this. And it's a really interesting subject."
In July, a new mega container ship berth was opened for business at the HHLA Container Terminal Burchardkai with the handling of the CMA CGM Christophe Colomb. With a stowage capacity of 13,880 TEU, the French shipping company CMA CGM's new fl agship was the largest container ship ever to have berthed in Hamburg. HHLA has equipped a berth with fi ve new super post-panamax container gantry cranes to maximize productivity when handling ships of this size. These tandem gantry cranes are capable of unloading two 40-foot containers or four 20-foot containers from a ship in a single movement. They are the largest and most powerful container gantry cranes of their kind in Europe. Burchardkai now has a total of ten super post-panamax container gantry cranes for mega container ship handling.
The new Feeder Logistik Zentrale (FLZ) was unveiled to the public in January. The FLZ is a joint project between HHLA and Eurogate. It coordinates the activities of feeder ships throughout the Port of Hamburg. These feeders are responsible for distributing the cargo brought in by container ships. "The FLZ is unique in the world. It considerably strengthens Hamburg's position as a feeder hub," praised Bernd Bertram, who manages the Danish shipping company Unifeeder's operations in Germany.
Metrans – a HHLA subsidiary – transported its two millionth standard container (TEU) between Prague and the Port of Hamburg in October. A special celebration was held to mark the event, which was attended by the Mayor of Hamburg, Christoph Ahlhaus. During the Mayor's visit to Prague, a rail gantry crane lifted the two millionth box onto a Metrans carriage.
HHLA and Polzug reacted to growing demand for container transport in one of Poland's key economic regions by opening a new inland terminal in Katowice. The fullservice terminal meets the high demands placed on handling terminals for intermodal transport in Europe. HHLA Intermodal Polska invested a total of around € 10 million in the construction of the new terminal, which opened in June.
In May, HHLA and Eurogate established the joint venture Inland Port Network (IPN) to build up a network of inland terminals in Germany. This will enable the two companies to support customers in the hinterland of German seaports with the same high standard of service they
offer in maritime logistics. With their integrated depots, the terminals will also offer storage capacity in close proximity to clients' target markets. During the initial phase, the team will develop terminal concepts, assess sites and build up facilities.
Northern banks of the Elbe
The "Areal West" architectural competition was launched to fi nd ideas for a newbuild to fi ll the last vacant site in the string of prestigious buildings lining the northern bank of the river Elbe in Hamburg-Altona. Hamburg's Chief Construction Offi cer Jörn Walter, the Managing Director of Fischmarkt Hamburg-Altona GmbH (FMH) Hartwig Sommerfeld and the Director of the HHLA Real Estate segment Thomas Kuhlmann presented the winners and their designs in July. This means that the "Perlenkette" on the Elbe riverfront can now be completed.
In September, HHLA announced its modular extension concept for the HHLA Container Terminal Odessa. The company plans to add new megaship berths to enable the terminal to profi t from growth in the region surrounding the Black Sea.
man of the Executive Board) thanked all those who helped the company to develop so successfully. Frank Horch, President of the Hamburg Chamber of Commerce, congratulated the company with these words: "It is impossible to imagine the port without HHLA, just like it is impossible to imagine Hamburg without the Alster lake and Michel church. Even in our city with its long-standing tradition of commerce, a 125th company anniversary is not an everyday occurrence."
port logistics providers. The anniversary was marked on 8 March with a formal reception at Hamburg city hall and the opening of an exhibition about the company's history in the city hall's lobby. Some 500 guests from the worlds of politics and business attended the event. In
Together with EKB Container Logistik, a transport company from Bremen, HHLA's subsidiary CTD established the joint venture Container Inland Trucking (CIT) in May. Its aim is to develop a comprehensive network for the "last mile" of the container transport chain in Germany. CIT is present at key sites and provides transportation from the inland terminals to customers' premises.
The year 2010 was a mixed but generally positive year for the stock markets. The mood was predominantly upbeat at the beginning of the year: following a good start and rather restrained progress during February, trading became somewhat fi rmer from March onwards. This trend turned around temporarily in early May when the debt crisis in Greece triggered a wave of selling on the stock markets. As the year progressed, the debt problems of eurozone countries remained to be a key topic on the fi nancial agenda. On the world's trading fl oors, weak economic data from the USA was largely responsible for further – albeit mainly brief – downward slides. Nevertheless, stock markets received a broad-based boost in the second half of the year in the wake of predominantly positive economic indications on both sides of the Atlantic, as well as improving company profi ts and diminishing concerns about public debt in the eurozone. The mid-cap index MDAX, which includes the HHLA share, grew
35 percent to 10,128 points. The leading German index DAX closed on 31 December 2010 at 6,914 points, up 16 percent on the previous year.
For the most part, the HHLA share developed in parallel to the relevant indices and was able to gain 28 percent over the course of the year. In contrast to the general market trend, however, the share price dipped on publication of the company's cautious forecast for the full year 2010, which came out with the 2009 annual results and was still due to limited visibility. However, bolstered by positive industry data, the share price subsequently recovered. In the second quarter, the upgraded volume forecast published in the Interim Report and a more detailed outlook for the year as a whole were well received. However, the share price was unable to escape the volatile market trends of the subsequent third quarter. In early September, the share outperformed the
market average amid buoyant trading, positive business news and optimistic economic forecasts. This growth in value was accompanied by good corporate news, such as the contract for a major Asia–Europe service and the addition of further feeder services. High liquidity and a lack of investment alternatives also prompted many investors to enter the market at widely attractive prices. The resulting upswing gained further momentum from early October onwards, as companies published their fi gures for the fi rst nine months and forecasts for the coming year. At an international level, companies succeeded in overcoming the economic crisis during the course of 2010 and began posting strong profi ts again. With the publication of its report for the fi rst nine months of 2010, HHLA also indicated good prospects for further growth in volumes and enhanced earnings. Buoyed by growing global trade, the HHLA share also benefi ted from the general economic upswing. In 2010, the average daily trading volume was 154,626 shares (previous year: 132,816 shares), which was largely attributable to the overall, occasion-
ally volatile stock market recovery. The HHLA share closed on 31 December 2010 at € 34.55, up 28 percent on the previous year. It peaked at € 35.39 on 23 December 2010, thereby returning to the price level of October 2008 for the fi rst time. Market capitalization totalled € 2.4 billion at year-end. Earnings per listed Class A share achieved € 1.00 for 2010.
All of HHLA's investor relations activities in 2010 were once again aimed at making the company's performance transparent by means of fair, open and timely communication. The company provided information about its fi nancial performance in a variety of activities over and above its statutory duties, which include the Annual General Meeting, Annual and Interim Reports and mandatory disclosures. In order to provide retail invest-ors with the information they require, HHLA's Investor Relations team took part in a number of events
| in € | 2010 | 2009 |
|---|---|---|
| Closing price at year-end 1 | 34.55 | 26.99 |
| Highest share price 1 | 35.39 | 32.36 |
| Lowest share price 1 | 24.11 | 16.64 |
| Performance in % | 28.0 | 14.9 |
| Average daily trading volume 2 | 154,626 | 132,816 |
| Number of shares | 72,679,826 | 72,679,826 |
| Listed shares (Class A shares) | 69,975,326 | 69,975,326 |
| Non-listed shares (Class S shares) | 2,704,500 | 2,704,500 |
| Dividend per Class A share 3 | 0.55 | 0.40 |
| Dividend yield in % | 1.6 | 1.3 |
| Market capitalization as of 31.12. (Class A shares) in € million | 2,417.6 | 1,888.6 |
| Price-earnings ratio as of 31.12. | 38.4 | 33.0 |
| Earnings per share | 1.00 | 0.67 |
1 XETRA
XETRA, Frankfurt am Main, Hamburg
Dividend proposal for 2010
held by shareholder protection associations, as well as a retail investor fair, at which the Executive Board presented HHLA's current business situation and future prospects. The range of information on the HHLA share on the company's website was also steadily expanded. Investors continue to take advantage of the opportunities provided for direct communication by phone, email or letter. HHLA's capital market communication once again included teleconferences on the quarterly results, one-to-one discussions with institutional investors and analysts, roadshows and investor conferences in the fi nancial centres of Europe and North America. The Investor Relations department uses all of these activities to maintain a dialogue with shareholders and potential investors. In addition to informing interested members of the public, the team also takes up issues of particular interest for the capital market. Last year, for example, investors were particularly interested in HHLA's integrated business model and its competitiveness, as well as the market developments in port logistics and pricing trends. The deepening of the river Elbe waterway also remained an important issue. Realization of this project is still of major importance to HHLA's future perspectives.
HHLA's Investor Relations team strives to constantly improve its communications activities in order to support private and institutional investors, as well as fi nancial analysts, evaluate the company's performance and current value. This work was rewarded with an improvement in the company's score and position in various IR ranking tables.
Due to the stake held by the Free and Hanseatic City of Hamburg (68.5 percent), HHLA's shareholder structure was again highly stable. The number of shareholders recorded in the share register reached a high at the end of the year (36,884 shareholders), corresponding to an increase of 5 percent. This broader distribution of shares lends the company even greater stability. According to the voting rights notifi cations submitted to HHLA by year-end 2010 in accordance with the German Securities Trading Act (WpHG), no single free fl oat investor held more than 3 percent of the outstanding shares. Among the daily traded shares, ownership shifted towards retail investors, who held 8.2 percent (previous year: 7.0 percent) of nominal capital as of 31 December 2010. On the same date, institutional investors held 23.3 percent of shares (previous year: 24.5 percent). In regional terms, the largest free fl oat shareholders are based primarily in Germany, the UK, the USA, Australia and further countries, mainly across continental Europe.
In the reporting year, the number of fi nancial analysts tracking HHLA's business development and making investment recommendations rose by two to 26. The overwhelming majority of analysts (85 percent) recommend buying or holding the HHLA share. They cite the general economic upturn, a dredging of the river Elbe waterway and potential savings as the key value drivers. Financial analysts who recommend selling the share (15 percent) primarily highlight the risks associated with the pending dredging of the river Elbe and the increasing competition between the North Range ports.
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 maintains a close dialogue with all fi nancial analysts and strives to expand the number of independent studies on its business development. Overview of fi nancial analysts available at www.hhla.de
HHLA's third Annual General Meeting since its initial public offering was held in Hamburg on 16 June 2010. Some 1,100 private and institutional investors attended the event, which meant that almost 80 percent of the company's nominal capital was represented at the meeting. The resolutions proposed by the Supervisory Board and the Executive Board were approved with large majorities.
At the Annual General Meeting in 2010 it was resolved to pay a dividend of € 0.40 per listed Class A share. The payouts were made on 17 June 2010. At the Annual General Meeting in 2011, the Executive Board and Supervisory Board will propose a dividend of € 0.55 per Class A share. HHLA's appro priation of profi t is thus once again oriented towards both the development of results in the fi nancial year ended and the continuation of its dividend policy. In an external comparison, the dividend payout ratio in relation to the relevant annual net profi t of the listed subgroup Port Logistics would remain high at 55,1 percent.
| Type of shares | No-par value registered shares | |||
|---|---|---|---|---|
| ISIN International Security Identifi cation Number | DE000A0S8488 | |||
| SIC | A0S848 | |||
| Symbol | HHFA | |||
| Stock exchanges | Regulated market: Frankfurt am Main, Hamburg Open market: Berlin, Düsseldorf, Hannover, Munich, Stuttgart |
|||
| Stock exchange segment | Prime Standard | |||
| Prime 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 |
Prof. Dr. Peer Witten Chairman
In the 2010 fi nancial year, the Supervisory Board fulfi lled the responsibilities entrusted to it by law, the company's 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 included 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 2010 fi nancial year, the Supervisory Board held four routine meetings and adopted one resolution by means of document circulation. None of the Supervisory Board members took part in fewer than half of the Supervisory Board meetings held in the reporting year. Full attendance was recorded at all the committee meetings.
At each ordinary meeting, the Supervisory Board dealt with the current development of business and the HHLA Group's earnings position in detail. On each occasion, the Executive Board reported in particular on the development of 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.
The fi nancial statements meeting held on 26 March 2010 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 2009 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. In addition, 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 2010 fi nancial year. Also under discussion at the meeting were the agenda for the Annual General Meeting in 2010, the Supervisory Board's report to the Annual General Meeting, the Corporate Governance Report, the cooperation between CTD Container-Transport-Dienst GmbH and EKB Container Logistik GmbH & Co. KG, and the disposal of assets held by CTL GmbH, Lübeck.
The meeting on 1 July 2010 concentrated on the 2010 round of wage negotiations and the remuneration system for members of the Executive Board.
In the September meeting, the Supervisory Board focused on the 2010 amendments to the German Corporate Governance Code, a corresponding revision of the Supervisory Board's rules of procedure, and the choice of auditor for the 2011 fi nancial year. The Supervisory Board also approved a proposal to expand the container terminal in Odessa.
The last meeting in the reporting period was held on 15 December, when the Supervisory Board concerned itself primarily with the budget for 2011, which it approved, and the medium-term corporate planning for 2012 to 2015. Another matter of major signifi cance was a new remuneration system for the Executive Board members, which the Supervisory Board approved. The Supervisory Board also formulated diversity targets for its own composition, discussed the extent to which these had been implemented, and examined the results of an effi ciency review conducted as part of a self-assessment process. Details of the defi ned targets can be found in the Corporate Governance Report see also page 40 et seq.
The new remuneration system is described in detail in the Remuneration Report see also page 46 et seq. Furthermore, the Executive Board gave a detailed report on the fi ndings of the risk inventory and on risk management. 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.
The written resolution by circulation concerned an adjustment to the cooperation agreement concluded with parties including Hapag-Lloyd AG which relates to the Container Terminal Altenwerder.
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 also page 48 et seq., Board members and mandates.
The Finance Committee met four times in the reporting period: in March, June, August and December 2010. In addition to reporting on the Group's fi nancial results, the main focal points of its work at the March meeting were making preparations for the Supervisory Board to discuss the cooperation between CTD Container-Transport-Dienst GmbH and EKB Container Logistik GmbH & Co. KG, and the disposal of assets held by CTL Container Terminal Lübeck GmbH. At its June meeting, the Finance Committee examined the acquisition of locomotives for Metrans a.s. The September session focused on preparations for the Supervisory Board to discuss expanding the container terminal in Odessa and a proposal to bring forward investments at Metrans a.s. At its December meeting, one of the Finance Committee's prime concerns was its preliminary review of the budget for 2011 and medium-term planning for 2012 to 2015.
The Audit Committee convened four times in the past fi nancial year. The March meeting focused primarily on the extensive discussion
and examination of the annual fi nancial statements of HHLA, the Consolidated Financial Statements and the management reports, as well as a recommendation for the Supervisory Board regarding the submission of a proposal to the Annual General Meeting for the choice of auditor for the 2010 fi nancial year. Representatives of the auditors were present when the annual fi nancial statements were discussed. They reported on the audit's fi ndings and were available to answer questions. According to the auditors' representatives, there were no circumstances demonstrating any bias of the auditor. The Interim Report for the fi rst quarter of 2010 and the report on the work done by Internal Audit were the main items discussed at the June meeting. At the third meeting, in August, the Audit Committee concentrated on the Interim Report for the fi rst half of 2010, preparations to select an auditor for the 2011 fi nancial year, and the new version of the German Corporate Governance Code. Preparations were made to propose an amendment to the Supervisory Board's rules of procedure. The meeting in December focused on the Interim Report for the third quarter of 2010, a discussion of focal points for the audit and the audit assignment for the 2010 annual and Consolidated Financial Statements for the auditors, a discussion of the fi ndings of the 2010 risk inventory and the risk management system. At this meeting, the Audit Committee also worked on preparing the declaration of compliance with the German Corporate Governance Code, the internal control system and HHLA's compliance system, and their further development. 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 2010 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 (March meeting), as well as the budget for 2011 and the medium-term planning for 2012 to 2015 (December meeting), each in relation to the Real Estate subgroup (S division).
The Personnel Committee met six times in the year under review (March, April, May, June, October and December 2010). It primarily dealt with matters relating to the Executive Board. In particular, the committee drafted proposals to the full council concerning a new remuneration system for Executive Board members and set targets for the future composition of the Supervisory Board with regard to diversity criteria, and specifi cally the appropriate inclusion of women.
Neither the Nomination Committee nor the Arbitration Committee convened in the 2010 fi nancial year.
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 Supervisory Board closely examined the contents of the German Corporate Governance Code and, in particular, the amendments to the Code dated 26 May 2010, which were announced on 2 July 2010. 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 3 December 2010. 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 15 December 2010. 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.
As a precaution and due to a potential confl ict of interest, Wolfgang Rose (an employee representative on the Supervisory Board and a member of the Supervisory Board of Hapag-Lloyd AG) did not take part in the written circulation procedure to reach a resolution concerning the adjustment to the cooperation agreement with the shareholder consortium of Hapag-Lloyd AG. The agreement concerns the Container Terminal Altenwerder. No further 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.
The Executive Board and the Supervisory Board report on the declaration of compliance and HHLA's Corporate Governance in the Corporate Governance Report for 2010. see also page 40 et seq., Corporate Governance Report.
KPMG AG Wirtschaftsprüfungsgesellschaft, Hamburg, was elected as auditor for the auditor's review of the annual fi nancial statements an the abridged fi nancial statements and the Interim Management Report for the fi rst half of the 2010 fi nancial year at the Annual General Meeting on 16 June 2010, 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, and 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 2010 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:
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 2010 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:
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."
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 21 March 2011. In the fi nancial statements meeting of the Supervisory Board on 25 March 2011, 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 their major fi ndings, particularly regarding the company's internal risk management, and were available to answer questions. According to the auditor's representatives, there were no circumstances demonstrating any bias of the auditors. In addition to the annual audit itself, the auditor also provided services for the company regarding half yearstatements and minor tax consulting. 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 Auditor's 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 2011, 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. The annual fi nancial statements of HHLA are thereby authorized. 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.
The Supervisory Board member elected by the shareholders, Carsten Frigge – former State Secretary of the Hamburg Ministry for Economic and Labour Affairs and former Senator of Finance of the city of Hamburg – resigned from his offi ce with effect from 5 August 2010. By order of Hamburg Local Court dated 23 August 2010, Peter Wenzel was appointed to the Supervisory Board as his successor. Peter Wenzel is State Secretary of the Hamburg Ministry for Economic and Labour Affairs. In line with the recommendation in Section 5.4.3 of the German Corporate Governance Code, State Secretary Wenzel's appointment was initially made for the period up to the end of the company's next Annual General Meeting. The Supervisory Board would like to thank Mr Frigge for his good work and dedication.
The Supervisory Board would also like to thank the members of the Executive Board and all employees and their representatives at HHLA and its affi liated companies for their commitment and hard work during the 2010 fi nancial year. They have all helped to ensure that it was a good year for HHLA overall, despite the ongoing challenges posed by the global economic environment.
Hamburg, 25 March 2011
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 characterized 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 Supervisory 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 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 On the activity of HHLA in the reporting period see also page 36 et seq., Report of the Supervisory Board.
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 auditors 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 auditors and, after the auditors 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, Jörg Wohlers, has expertise and experience in the areas of accounting, the auditing of fi nancial statements and 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 see also page 48 et seq., Board members and mandates.
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 organization. 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.
The Executive Board of HHLA consists of fi ve members. For its current composition see also page 48 et seq., Board members and mandates. 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 rules of procedure 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 the 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 conducted by the Executive Board require the approval of the Supervisory Board in accordance with the Executive Board's rules of procedure. 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 material 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 company has arranged for D&O insurance with an appropriate deductible for members of the Executive Board.
The Executive Board and the Supervisory Board again dealt with matters relating to Corporate Governance in great depth during the 2010 fi nancial year. On 15 December 2010, they jointly issued the following Declaration of Compliance for 2009 as per Section 161 of the German Stock Corporation Act (AktG). The Executive Board and Supervisory Board of Hamburger Hafen und Logistik AG herewith state after due examination that in the period from 15 December 2009 (the date on which the previous declaration of compliance was issued) to 2 July 2010, HHLA complied with the recommendations of the German Corporate Governance Code ("the Code") in the version as of 18 June 2009, and thereafter the version of the Code dated 26 May 2010, and published on 2 July 2010, with the following exceptions. Furthermore, HHLA shall comply with the 26 May 2010 version of the Code in the future with the following exceptions:
the level of detail and frequency at which the company's reports are examined, the half-yearly fi nancial report and the Interim Management Report were reviewed by the auditor again this year. It is intended that this will continue in the future.
Hamburg, 15 December 2010
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 "corporate 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 and confl icts of interest, and how to deal with sensitive corporate information, especially insider information 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 synchronizes his or her activities closely with those of the Internal Audit and Risk Management departments. In 2010, further extensive steps were taken to enhance HHLA's compliance management system. The company's preventative work was strengthened by drafting and updating Group guidelines and rules of conduct, as well as holding training sessions on the code of conduct and various special issues, such as conduct in the competitive environment and occupational health and safety. Furthermore, the company introduced a Group-wide reporting system for staff to report compliance infringements and preventive measures. 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 characterized by responsibility towards its employees, the environment and society as a whole and by taking responsibility for its business activities. see also page 70 et seq., Sustainability.
At its meeting on 15 December 2010, the Supervisory Board of Hamburger Hafen und Logistik Aktiengesellschaft adopted the following statement of intent for its future composition as per Section 5.4.1 of the German Corporate Governance Code ("the Code"):
According to the Supervisory Board's rules of procedure, HHLA's Supervisory Board should "always consist of members with the necessary knowledge, skills and industry experience to fulfi l their responsibilities properly". These requirements apply regardless of the members' gender, nationality or other personal characteristics.
In addition, the current version of the Code (dated 26 May 2010) calls in Section 5.4.1 for concrete objectives to be defi ned regarding the Supervisory Board's composition. Against the backdrop of an organization's specifi c situation, these should take into account the company's international operations, potential confl icts of interest, 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. 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).
In 2009, women made up around 13.8 percent of the workforce at HHLA's German companies (average for the year). With regard to the appropriate inclusion of women on the Supervisory Board, the company is pursuing two goals. Firstly, the company aims to increase the number of qualifi ed women included in the selection stage and put forward in election proposals to the Annual General Meeting. Secondly, once the current period of offi ce comes to an end in 2012, the company aims to recruit at least one woman onto the HHLA Supervisory Board so as to better refl ect relations within the workforce.
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 the following concrete measures at its meeting on 15 December 2010, which are designed to give qualifi ed women a better chance of gaining a seat on the Supervisory Board:
Due to HHLA's business model, the company's operations focus is rather regional or site specifi c. However, as some of the members of the company's Supervisory Board have extensive relevant experience of managing international companies, it is currently not necessary to sharpen the Board's focus on an international orientation.
The rules of procedure of HHLA's Supervisory Board already 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 interests, the rules of procedure of HHLA's Supervisory Board 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 Super visory 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 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 gives 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 will continue to ensure that – in its view – a suffi cient number of independent members are appointed to the Supervisory Board in the future.
The objectives concerning international orientation, the age limit and confl icts of interests have already been achieved and/or will continue to be taken into account when selecting future candidates and making election proposals. It has not been possible to follow through on the diversity objective as yet – particularly with regard to the appropriate inclusion of women – as the current Supervisory Board members' period of offi ce does not end until 2012. However, this objective will be borne in mind when considering potential candidates for the next period of offi ce and submitting election proposals to the Annual General Meeting.
In the 2010 fi nancial year, the company did not receive any notifi cations regarding directors' dealings with HHLA shares.
As of 31 December 2010, the Executive Board and Supervisory Board overall did not possess more than 1 percent of the shares issued by HHLA.
The HHLA Group's risk management system is described in detail in the Risk and opportunity report chapter of the management report see also page 90 et seq. In accordance with the statutory provisions, it is designed to identify signifi cant risks in advance so that they can be minimized, diversifi ed, transferred or averted, ensuring the continued existence of the HHLA Group and its operating com panies. 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 authorize 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 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. 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 Financial 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 2010 fi nancial year – KPMG AG 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 remuneration 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.
The remuneration of Executive Board members in the reporting period is made up of a non-performance-related basic annual salary, a performance-related bonus and other benefi ts (primarily the use of a company car). The amount of the bonus depends on total consolidated earnings (before minority interests). The bonus is calculated on the basis of earnings before taxes (EBT) and before additions to pension provisions, less any extraordinary income from the disposal of companies, interests and/or real estate. Annual climate protection goals are also agreed, particularly regarding the reduction of CO2 emissions.
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, 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. The percentage is between 35 and 50 percent. Several different forms of income are taken into account for this, for example that from statutory pension insurance and pensions and related benefi ts from public funds.
Surviving spouses of Executive Board members receive a widow(er)'s pension of 60 percent of the pension entitlement.
Should the pension entitlement have been suspended or no longer apply, transitional pay will apply for a limited period on the basis of the annual basic salary. The service contracts valid during the reporting period include a compensation provision relating to change of control or comparable circumstances. This stipulates that Executive Board members will be entitled to receive their remuneration entitlements for the remaining duration of their respective contracts as a lump sum, discounted by 2 percent per annum. This does not affect their pension entitlements.
The members of the Executive Board were not granted any loans or similar payments. The members of the Executive Board received total remuneration of just over € 2.55 million for their services in the 2010 fi nancial year. Former members of the Executive Board and their surviving dependants received total payments of € 820,880.14. Total provisions of € 11,691,935 have been formed for pension obligations to former members of the Executive Board and their surviving dependants.
The regulations described above are based on contractual provisions agreed with the members sitting on the Executive Board during the reporting period before the German Act on the Appropriateness of Management Board Remuneration (VorstAG) came into effect. In the course of the 2010 fi nancial year, the Personnel
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Total remuneration | Appropriation to pension provisions |
||||||||
| 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | ||
| Klaus-Dieter Peters | 350,000 | 350,000 | 13,521 | 13,424 | 350,214 | 321,722 | 713,735 | 685,146 | 242,554 | 325,335 | |
| Dr. Stefan Behn | 275,000 | 275,000 | 12,237 | 10,488 | 175,107 | 160,861 | 462,344 | 446,349 | 185,867 | 316,236 | |
| Heinz Brandt | 275,000 | 275,000 | 12,734 | 11,986 | 175,107 | 160,861 | 462,841 | 447,847 | 176,702 | 149,769 | |
| Dr. Sebastian Jürgens | 275,000 | 275,000 | 8,955 | 26,444 | 175,107 | 160,861 | 459,062 | 462,305 | 88,367 | 67,856 | |
| Dr. Roland Lappin | 275,000 | 275,000 | 5,906 | 5,942 | 175,107 | 160,861 | 456,013 | 441,803 | 116,603 | 191,519 | |
| Rolf Fritsch (until 31.03.2009) |
0 | 68,750 | 0 | 6,467 | 0 | 40,215 | 0 | 115,432 | 0 | 460,438 | |
| Total | 1,450,000 | 1,518,750 | 53,353 | 74,751 | 1,050,642 | 1,005,381 | 2,553,995 | 2,598,882 | 810,093 | 1,511,153 |
Committee made proposals for a new remuneration system and drafted the corresponding key contractual components in accordance with the requirements of the VorstAG Act. The full council of the Supervisory Board examined these proposals and approved a new remuneration system at its December meeting. The new system shall be used in future when existing Executive Board contracts are amended or extended and when new contracts are concluded. Within the new system, remuneration still comprises a non-performance-related annual salary, a performance-related bonus and other benefi ts (primarily the use of a company car). The performance-related bonus is set on the basis of a three-year assessment period. 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 companies, interests and/or real estate), the average return on capital employed (ROCE) and the achievement of targets relating to environmental issues (CO2 value per container) and social issues (broken down into training and continuing professional development, health and employment) over the same period. When making these calculations, roughly equal weight should be given to EBIT, on the one hand, and the above-mentioned sustainability components on the other. Variable remuneration is capped at 150 percent of basic salary. For the most part, the new system will uphold the arrangements for pensions described above.
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 Annual 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 percent when a dividend is paid to holders of the company's Class A shares for the fi nancial year in question. Super visory Board members who belong to a committee receive an additional € 2,500 4 per committee per year, while the Chairman of the respective committee receives € 5,000 4 , but altogether no more than € 10,000 4 . Supervisory Board members who have belonged to the Supervisory Board or a committee for less than a whole year receive a corresponding pro rata payment.
Furthermore, Supervisory Board members receive a meeting attendance fee of € 250 4 for each meeting of the Supervisory Board or one of its committees. No loans or similar payments were granted to members of the Supervisory Board. Total remuneration paid to members of the Supervisory Board amounted to € 323,972.
| Fixed remuneration |
Variable remuneration |
Remuneration for committee work |
Meeting fee | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |
| Prof. Dr. Peer Witten 1 | 35,700 | 35,700 | 12,495 | 12,495 | 5,950 | 5,950 | 2,975 | 2,083 | 57,120 | 56,228 |
| Dr. Bernd Egert | 10,000 | 10,000 | 3,500 | 3,500 | 7,500 | 5,527 | 3,250 | 3,250 | 24,250 | 22,277 |
| Carsten Frigge | 5,945 | 10,000 | 2,081 | 3,500 | 1,486 | 2,185 | 1,500 | 1,250 | 11,012 | 16,935 |
| Holger Heinzel | 10,000 | 10,000 | 3,500 | 3,500 | 0 | 0 | 750 | 1,500 | 14,250 | 15,000 |
| Rolf Kirchfeld 1 | 0 | 5,053 | 0 | 1,769 | 0 | 0 | 0 | 595 | 0 | 7,417 |
| Jörg Klauke | 10,000 | 10,000 | 3,500 | 3,500 | 5,000 | 2,705 | 3,000 | 2,750 | 21,500 | 18,955 |
| Dr. Rainer Klemmt-Nissen | 10,000 | 10,000 | 3,500 | 3,500 | 10,000 | 10,000 | 3,250 | 3,000 | 26,750 | 26,500 |
| Thomas Mendrzik | 10,000 | 10,000 | 3,500 | 3,500 | 2,500 | 2,500 | 1,500 | 2,000 | 17,500 | 18,000 |
| Arno Münster 2 | 15,700 | 10,000 | 5,495 | 3,500 | 14,789 | 7,705 | 7,328 | 3,250 | 43,311 | 24,455 |
| Wolfgang Rose 1 | 17,850 | 17,850 | 6,248 | 6,248 | 2,975 | 2,975 | 2,678 | 1,785 | 29,751 | 28,858 |
| Uwe Schröder | 10,000 | 10,000 | 3,500 | 3,500 | 7,500 | 5,205 | 4,500 | 3,000 | 25,500 | 21,705 |
| Walter Stork | 10,000 | 10,000 | 3,500 | 3,500 | 5,000 | 5,000 | 3,500 | 2,500 | 22,000 | 21,000 |
| Peter Wenzel | 3,589 | 0 | 1,256 | 0 | 788 | 0 | 1,000 | 0 | 6,633 | 0 |
| Jörg Wohlers 3 | 11,900 | 5,781 | 4,165 | 2,023 | 5,950 | 411 | 2,380 | 1,000 | 24,395 | 9,215 |
| Total | 160,684 | 154,384 | 56,239 | 54,035 | 69,438 | 50,163 | 37,611 | 27,963 | 323,972 | 286,545 |
1 All figures include VAT.
The amounts reported for 2010 all include statutory value-added tax on the remuneration paid in 2010 plus additional value-added tax paid out in 2010 for the years 2009 and 2008. 3 The amounts reported for 2010 all include statutory value-added tax. 4 Amounts exclusive of statutory value-added tax.
Chairman
Businessman, Hamburg
Other Supervisory Board mandates
I Röhlig & Co. Holding GmbH & Co. KG, Bremen Board of Partners mandates
Vice Chairman Banker, Hamburg Executive at ver.di (trade union) in Hamburg Other Supervisory Board mandates
Physicist, Winsen (Luhe)
Senate Director in the Ministry for Economic & Labour Affairs of the Free and Hanseatic City of Hamburg
Graduate in business administration (Dipl.-Kaufmann), Hamburg Other Supervisory Board mandates
I Dedalus GmbH & Co. KGaA, Stuttgart (until 30 November 2010)
I Hamburg Energie GmbH, Hamburg (until 22 June 2010)
I Hamburgische Wohnungsbaukreditanstalt AöR (Administrative Board), Hamburg (until 30 November 2010)
Graduate in business administration (Dipl.-Kaufmann), Hittfeld Head of Controlling at HHLA
Port technician, Hamburg Vice Chairman of HHLA works council
Administrative lawyer, Hamburg Managing Director of HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH, Hamburg Other Supervisory Board mandates
Electrical technician, Hamburg Chairman of the HHLA Container-Terminal Altenwerder GmbH works council Other Supervisory Board mandates
Port technician, Hamburg Chairman of HHLA works council
* Seats on statutory supervisory board or comparable supervisory bodies at domestic and foreign companies.
Trade union secretary, ver.di Hamburg Other Supervisory Board mandates
I HHLA Container Terminals GmbH, Hamburg (until 31 December 2010)
Logistics manager, Hamburg
Chairman of the Executive Board of NAVIS Schifffahrts- und Speditionsgesellschaft AG, Hamburg (until 6 July 2010) Other Supervisory Board mandates
I DIHS-DAKOSY Interessengemeinschaft Hamburger Spediteure GmbH, Hamburg
I HPA Hamburg Port Authority AöR, Hamburg
State Secretary in the Ministry for Economic & Labour Affairs Other Supervisory Board mandates
Dipl.-Sparkassenbetriebswirt, Hamburg Haspa Finanzholding, Member of the Executive Board (Deputy spokesman of the executive board) Hamburger Sparkasse AG, Hamburg, (Member of the Executive Board)
Dr. Rainer Klemmt-Nissen (Chairman) Arno Münster (Deputy Chairman) Dr. Bernd Egert Jörg Klauke Uwe Schröder Walter Stork
Jörg Wohlers (Chairman) Arno Münster (Deputy Chairman) Dr. Bernd Egert Jörg Klauke Dr. Rainer Klemmt-Nissen Uwe Schröder
Dr. Rainer Klemmt-Nissen (Chairman) Thomas Mendrzik (Deputy Chairman) Dr. Bernd Egert Arno Münster
Prof. Dr. Peer Witten (Chairman) Arno Münster (Deputy Chairman) Carsten Frigge (until 5 August 2010) Wolfgang Rose Uwe Schröder Walter Stork Peter Wenzel (since 23 August 2010)
Prof. Dr. Peer Witten (Chairman) Carsten Frigge (until 5 August 2010) Walter Stork Peter Wenzel (since 23 August 2010)
Prof. Dr. Peer Witten (Chairman) Carsten Frigge (until 5 August 2010) Arno Münster Wolfgang Rose Peter Wenzel (since 23 August 2010)
The Executive Board members and their mandates*
Chairman Forwarding merchant, Hamburg Appointed: 2003 Areas of responsibility
I HHLA CTA Besitzgesellschaft mbH, Hamburg
I SCA Service Center Altenwerder GmbH, Hamburg
Graduate in business administration (Dipl.-Kaufmann), Hamburg Appointed: 1996
* Seats on statutory supervisory board or comparable supervisory bodies at domestic and foreign companies.
Attorney at law, Hamburg
Appointed: 2009
I IPN Inland Port Network GmbH & Co. KG, Hamburg (since 5 May 2010)
I IPN Inland Port Network Verwaltungsgesellschaft mbH, Hamburg (since 5 May 2010)
Graduate in industrial engineering (Dipl.-Wirtschaftsingenieur), Hamburg
Appointed: 2003
74 Course of business and economic situation
78 Container segment
Please see page 172 for a full list of HHLA's shareholdings, listed by business sector.
The HHLA Group is a leading company in the European seaport transportation industry. As an integrated handling, transport and logistics provider, the Group offers services along the logistics chain between overseas ports and their European hinterland. Since its foundation, HHLA's activities have always included the development and letting of properties in Hamburg. Hamburger Hafen und Logistik Aktiengesellschaft runs the Group as a strategic management holding company. Its operations are carried out by the 39 domestic and seven foreign subsidiaries which make up the consolidated group. No signifi cant legal or organizational changes were made to the company structure in the 2010 fi nancial year.
The HHLA Group is divided into two subgroups, Port Logistics and Real Estate. The Class A shares, which are listed on the stock exchange, belong to the subgroup Port Logistics and entitle shareholders merely to participate in the result and net assets of these commercial operations. The subgroup Port Logistics encompasses the Container, Intermodal and Logistics segments. The Holding/Other division is likewise part of the subgroup Port Logistics, although according to International Financial Reporting Standards (IFRS) it does not constitute an separate segment. The Holding company 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.
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 and Le Havre. The geographical focus of its commercial activities is on the Port of Hamburg and its hinterland. The Port of Hamburg is the 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 Fischmarkt Hamburg-Altona GmbH. 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). Under a separate agreement, the FHH municipal authority is indirectly responsible for assuming any losses of the Real Estate subgroup.
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.
The Executive Board of HHLA currently consists of fi ve members, whose areas of responsibility are defi ned by their specifi c tasks and operating segments. The Supervisory Board consists of twelve members in total, with six representing the shareholders and six representing the employees. see also page 48 et seq., Board members and mandates.
| Supervisory Board | |||||||
|---|---|---|---|---|---|---|---|
| Executive Board | |||||||
| Klaus-Dieter Peters | Dr. Stefan Behn | Heinz Brandt | Dr. Sebastian Jürgens | Dr. Roland Lappin | |||
| I Coordination executive board |
I Container segment |
I Human resources |
I Intermodal segment |
I Finance | |||
| I Controlling | |||||||
| I Corporate communications |
I Information systems |
I Purchasing and supplies/ materials |
I Logistics segment |
I Investor Relations |
|||
| I Corporate | |||||||
| development | I Legal and insurance |
I Internal audit | |||||
| I Sustainability | I Real Estate | ||||||
| I Health and safety in the workplace |
segment |
Fields of responsibility
Executive Board members
HHLA's 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 (e.g. rail, truck or feeder ship). HHLA operates three high-per formance container terminals in Hamburg (Altenwerder, Burchardkai and Tollerort, abbreviated as CTA, CTB and CTT, respectively). It also provides handling services in Odessa, Ukraine, where it operates an additional container terminal. 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 core 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. Together with strategic partners, HHLA operates the railway companies Transfracht, Metrans and Polzug, which maintain
regular rail links to and from Central and Eastern Europe. The trucking company CTD transports containers in the Hamburg, Berlin, Bremen and Stuttgart metropolitan areas, as well as over long dis tances within Europe. The segment's service portfolio also includes loading and unloading 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, fruits and motor vehicles, as well as the processing of cruise ships. In this segment, HHLA also provides consulting and management services for clients in the port and transport industry. Most of the logistics services are provided together with partner companies.
The HHLA Real Estate segment corresponds to the Real Estate subgroup. Its business activities comprise the development, letting and
managing of properties in the Port of Hamburg's peripheral area. These include the Speicherstadt historical warehouse district, the largest complex of traditional warehouses in the world. In this central location, HHLA offers some 300,000 m2 of commercial space. Other prime properties are managed by Fischmarkt 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.
With its publicly 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 land-based pre-carriage and on-carriage systems.
Sea freight shipping is overall regarded as a growth market since falling transport costs 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 standardized transport receptacle, it is the increasing integration of the emerging economies of Central and Eastern Europe and Asia in particular which has led to rising freight volumes. It is generally assumed that this trend will continue, as can already be seen from the remarkably fast recovery of global trade following the fi nancial and economic crisis. 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 industrialized nations.
The relevant market for port services along the Northern European coast between Hamburg and Le Havre (the North Range) is characterized 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.
As the most easterly North Sea port, the Port of Hamburg is in an ideal position to serve as the 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 handling volume of 7.9 million standard containers (TEU), Hamburg remained the thirdlargest port in its competitive region in 2010. Import and export volumes were once again largely balanced. This resulted in a comparatively low proportion of empty containers, adding to Hamburg's attractiveness as a port from a shipping line's perspective.
by shipping region in the port of Hamburg, 2010
60 % Asia 10 % Scandinavia 10 % Eastern Europe (Baltic Sea) 7 % Rest of Europe 6 % South America 4 % North America
Source: Port authorities
at the Port of Hamburg, split into key classes of goods, Jan.–Sep. 2010
| in million tons | Incoming | Outgoing |
|---|---|---|
| Food and animal feed | 4.2 | 3.3 |
| Electronic products, machinery |
2.6 | 3.9 |
| Chemical products | 2.5 | 4.4 |
| Textiles and leather goods | 2.2 | 0.5 |
| Agricultural and forest products |
2.1 | 1.5 |
| Stones and soils | 1.1 | 0.8 |
| Iron, steel and non-ferrous metals |
1.0 | 1.6 |
| Glassware | 0.7 | 0.4 |
| Vehicles | 0.6 | 1.0 |
| Ores and scrap metal | 0.2 | 0.2 |
| Fertilizers | 0.1 | 0.1 |
| Fuels | 0.1 | 0.3 |
| Other semi-fi nished and fi nished goods |
11.9 | 10.9 |
| Total | 29.3 | 28.9 |
Source: Statistics Offi ce North, Hamburg, data as of March 2011
Hamburg ranks 16 in the list of the world's leading international ports, now that Chinese ports, in particular, have risen to occupy leading places due to their massive growth in recent years. Consignments to and from Hamburg often originate from, or are destined for, China.
by container throughput, 2010
| in million TEU | ||
|---|---|---|
| 1. | Shanghai, China | 29.1 |
| 2. | Singapore | 28.4 |
| 3. | Hong Kong, China | 23.5 |
| 4. | Shenzhen, China | 22.5 |
| 5. | Busan, South Korea | 14.2 |
| 6. | Los Angeles / Long Beach, USA | 14.1 |
| 7. | Ningbo, China | 13.1 |
| 8. | Guangzhou, China | 12.6 |
| 9. | Qingdao, China | 12.0 |
| 10. | Dubai, United Arab Emirates | 11.6 |
| 11. | Rotterdam, The Netherlands | 11.1 |
| 12. Tianjin, China | 10.1 | |
| 13. | Kaohsiung, Taiwan | 9.2 |
| 14. | Port Kelang, Malaysia | 8.9 |
| 15. | Antwerp, Belgium | 8.5 |
| 16. | Hamburg, Germany | 7.9 |
| 17. Tanjung Pelepas, Malaysia | 6.5 | |
| 18. | Xiamen, China | 5.8 |
| 19. | Dalian, China | 5.2 |
| 20. | Laem Chabang, Thailand | 5.2 |
Source: AXS Alphaliner
In the Container segment, HHLA competes directly with other terminal operators in Hamburg and the wider North Range. Primary competitive factors – apart from pricing – are 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 ports' geographical position, its hinterland links and its accessibility from the sea.
In Hamburg, HHLA's high-performance terminals helped to maintain the company's leading position as the largest container handling fi rm with a total throughput volume in all segments of 5.5 million TEU in 2010. A good 70 % of container traffi c (previous year: 68 %) at the Port of Hamburg was handled by HHLA. HHLA was also able to recapture freight volume lost to rival ports during the 2009 crisis. Among the major North Range ports, its market share rose to 17.4 % (previous year: 16.6 %). This was due to signifi cantly stronger demand in those shipping regions which traditionally have the highest throughput, i.e. routes to and from Asia as well as the relocation of feeder services from other ports back to Hamburg. HHLA benefi ted from improving its range of services for handling large vessels and coordinating feeders, while rising ship operating costs (charter and bunker prices) helped to underline the port's geographical advantage as the year progressed.
The Intermodal segment strengthens HHLA's market position by offering a complementary range of seaport-hinterland traffi c services. In particular, HHLA utilizes the advantages of the Port of Hamburg's rail infrastructure – Europe's most important rail traffi c hub. The Group's subsidiary Transfracht has established itself as market leader for combined cargo traffi c from Hamburg and Bremerhaven by extending its shuttle train connections within Germany, to and from Austria, and to Switzerland. Meanwhile, the Metrans Group – also part of the HHLA rail network – has steadily expanded its market position as a leading provider of intermodal transportation from Hamburg, Bremerhaven, Koper and Rotterdam to the Czech and Slovak Republics and Hungary. Polzug has a strong competitive position in the rail-bound transport business from Hamburg, Bremerhaven and Rotterdam to the Central and Eastern European hinterland (primarily Poland and the CIS) and ultimately central Asia. The Group's affi liate CTD is striving to build on its sound market position for the regional delivery and/or collection of containers by truck
in the greater Hamburg region by means of a joint venture with EKB – a large Germany-wide trucking company. Furthermore, by opening its fi rst intermodal hinterland terminal in Katowice, southern Poland, the Group has started occupying further key market positions in the transport chain. HHLA has also established a joint venture with the Eurogate Group to set up a terminal network in Germany's hinterland with the same goal.
The Logistics segment serves various market sectors, some of them highly specialized. With its fruit and refrigeration centre, for example, HHLA is market leader in the fi eld of fruit handling in Germany and occupies second place in the North Range. Via Hansaport, HHLA also has a stake in Germany's biggest seaport terminal for handling dry bulk cargo. In the fi eld of port consultancy, the Group's affi liates Hamburg Port Consulting (HPC) and Uniconsult work on major development projects around the world. HHLA's complementary range of warehouse and contract logistics services supports the Group's market positions in the handling and transportation sectors.
For the Real Estate segment Hamburg is one of the largest and most interesting property markets in Germany with its population of around 1.8 million and its signifi cance as an economic centre. The HHLA Real Estate segment owes its outstanding market position to the special attractiveness of the properties it manages in Hamburg's Speicherstadt historical warehouse district and on the northern bank of the river Elbe, as well as their customized and sustainable enhancement. The segment competes with German and international investors marketing highquality properties in comparable locations.
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, from retail companies (in the fi eld of fruit logistics) to international operators of ports and other logistics centres (in the fi eld of port consulting). The Real Estate segment lets its offi ce and industrial premises to German and international corporate customers from a variety of sectors, ranging from warehousing 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. HHLA's container terminals treat ships from all shipping companies equally when handling vessels and allocating berths (multi-user principle) and can therefore offer service of a consistently high quality for all customers. HHLA's customer base currently includes 19 of the 20 largest container shipping companies. In the 2010 fi nancial year, HHLA's fi ve most important customers accounted for 50 %, its ten most important for 75 % and its 15 most important for 89 % of revenue generated by the HHLA container terminals in Hamburg. HHLA has maintained commercial relationships with 75 % of its most important customers for more than two decades.
by transportation capacity, 2010
| 1. | APM-Mærsk | 2,148 |
|---|---|---|
| 2. | MSC | 1,863 |
| 3. | CMA CGM | 1,210 |
| 4. | Evergreen Line | 604 |
| 5. | Hapag-Lloyd | 597 |
| 6. | APL | 585 |
| 7. | CSAV | 579 |
| 8. | COSCO | 545 |
| 9. | Hanjin | 477 |
| 10. | CSCL | 457 |
| 11. | MOL | 399 |
| 12. | NYK | 387 |
| 13. | Hamburg Süd | 371 |
| 14. | OOCL | 354 |
| 15. | K Line | 328 |
| 16. | Zim | 323 |
| 17. | Yang Ming Line | 322 |
| 18. | Hyundai M.M. | 287 |
| 19. | PIL (Pacifi c Intl. Line) | 264 |
| 20. | UASC | 217 |
Source: AXS Alphaliner
Revenue distribution split by customers in the Container segment, 2010
50 % Top 1– 5 25 % Top 6 –10 14 % Top 11–15 11 % Other
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 cargo, but the freight volumes and transport routes are determined by the producers or purchasers of the goods. Therefore volumes in the Container segment do not constitute an order backlog in the classical sense. Sales activities are organized 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 activities. They are also aimed at optimizing processes and thereby helping to increase value added 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 key account managers inform the container shipping companies regularly about the latest technological developments at the HHLA container terminals and advise them on ways of improving the effi ciency of intermodal container transport via the Port of Hamburg.
The two HHLA segments Intermodal and Logistics are geared differently towards the specifi c needs of 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 sales departments at their headquarters in Hamburg, Frankfurt am Main, Prague and Warsaw. They also use regional offi ces at the seaports (such as Bremerhaven, Koper and Rotterdam) and in the target markets – e.g. Berlin, Munich, Nuremberg, Duisburg, Warsaw, Dunajská Streda and central locations overseas – to provide local support for their shipping and forwarding customers and to acquire new business.
In HHLA's Real Estate segment, the sales activities are organized by way of its two central locations, Hamburg's Speicherstadt historical warehouse district and the northern banks of the river Elbe. Potential customers and tenants can therefore be advised across the whole spectrum of services by professional real estate staff who specialize in the respective properties and can offer customized solutions based on their location expertise.
HHLA's strategy is aimed at the sustainable growth of 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 future prospects. Thanks to its business model of vertical integration along the logistics chain between international seaports and the European hinterland, HHLA is favourably positioned to exploit the intensifi cation in global trade and achieve profitable 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 2010 fi nancial year. HHLA pursues the following strategic guidelines with the aim of securing and expanding its leading position as a port logistics group in the European North Range:
HHLA plans to continuously improve its competitiveness by further enhancing its service quality and technological capabilities. It is concentrating on both retaining its broad customer base and attracting new clients. Its ship handling activities focus on continuously improving the effi ciency of handling services. This involves systematically gearing the design and operation of facil ities towards maximizing land-usage, employee and capital productivity. In order to strengthen its leading position in handling technology and effi ciency, HHLA works particularly on innovating its systems and optimizing processes. To this end, HHLA continuously improves its IT basis. To ensure that it is largely independent from 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 page 68 et seq., Research and development.
HHLA's strategic foundation
In order to ensure a consistently high standard of service, HHLA will continue to pursue its multiuser concept in the Container segment, i.e. the equal treatment of all shipping companies in the handling of vessels 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 precarriage and on-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 will pave 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 the level of its value generation. This approach is geared primarily towards making effective use of the Port of Hamburg's advantageous geographical position in terms of transport links by utilizing 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. HHLA will accompany these measures by expanding its truck platform, which focuses on offering a comprehensive network for delivering and collecting sea containers over the "last mile". It is intended that all additions to the Group's integrated service portfolio will be managed in dialogue with customers and according to demand.
In addition to organic growth, HHLA regularly examines opportunities for acquisitions. Potential acquisitions and equity investments focus on port projects in attractive growth markets within the company's core region. Based on the economies of scope offered by the existing network and the opportunities it presents to tap additional potential, HHLA's core region stretches from the North Sea coast to the catchment area between the Baltic region, the northern Adriatic and the Black Sea. HHLA pursues a selective, opportunity-driven 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 value-oriented approach to enhancing the activities pooled in this segment. This includes in particular the careful 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. Herewith, HHLA aims to ensure that it can seize opportunities for value-enhancing corporate development and actively shape consolidation processes in the port logistics sector at any time. see also page 82 et seq., Financial position.
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 progression, as well as customer satisfaction, handling speed, geographical range and many more 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 page 63 et seq., Corporate and value management.
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
Sustainably increasing enterprise value at HHLA
this end, the Port of Hamburg currently employs a "landlord model", by which the public sector 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 authorizations under public law, especially offi cial authorizations in accordance with the German Federal Emissions Control Act (Bundesimmissionsschutzgesetz – BImSchG), the applicable local building regulations and water and waterways laws. All construction and extension measures require separate authorizations by the respective authorities, irrespective of the planning approval procedure for the expansion of the throughput 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 standardized 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 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 the 2010 fi nancial year, however, there were no amendments to the legal framework with a signifi cant impact on operating activities.
HHLA's primary objective is the 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 page 70 et seq., Sustainability and page 60 et seq., Corporate strategy.
HHLA uses a group-wide value management system for the planning, management and monitoring of its commercial activities. No fundamental changes were made to this system in the 2010 fi nancial year. The key performance indicator for fi nancial management is the ratio ROCE (return on capital employed). This benchmark takes account of all the Group's relevant earnings and assets parameters, thereby encouraging valuegenerating corporate decisions in the interest of a closely coordinated management of profi tability and capital employed.
ROCE – defi ning parameters and infl uential factors
| Return on capital employed (ROCE) | ||||
|---|---|---|---|---|
| Operating result (EBIT) | Average operating assets | |||
| Operating income |
Operating expenses |
Average net non-current assets |
Average net current assets |
The HHLA Group calculates ROCE as follows:
| Operating result (EBIT) | ||
|---|---|---|
| ROCE = | Average operating assets |
The numerator – EBIT – corresponds to the operating result before interest and taxes. The Group uses EBIT to measure its operating performance and the earnings generated by its commercial activities in the respective period. The operating result is the aggregate performance in a period, which is essentially determined by revenue plus other operating income less operating expenses, such as cost of materials and personnel expenses as well as other operating expenses and depreciation and amortization. The denominator – average operating assets – is based on the assets side of the balance sheet. It is calculated using the average net non-current assets (intangible assets and property, plant and equipment, investment properties, assets accounted for using the at-equity method and fi nancial assets) and the average net current assets (inventories plus trade receivables less trade liabilities). Operating assets therefore comprise the Group's assets which are used to generate the operating result.
As in the previous year, EBIT from continuing activities was used to calculate ROCE for 2010. In the reporting period, the difference to regular EBIT was due to proceeds from the sale of property, plant and equipment of a discontinued company. In the previous year, the discrepancy was attributable to non-recurring restructuring expenses, the deconsolidation loss and operating losses at this and another discontinued company. see also page 75, Group performance, Note on the reporting.
EBIT from continuing activities corresponds to the defi nitional approach to operating assets, which does not include assets held for sale.
Thus, the key performance indicator ROCE represents the average return on the capital employed to generate the regular operating performance. 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. In the 2010 fi nancial year, the long-term development of this target was explicitly emphasized by introducing a multi-year assessment time frame for calculating performance-related remuneration components at executive level. see also page 46 et seq., Remuneration Report.
Value-oriented management therefore serves to align all operating activities with the aim of raising enterprise value. Commercial activities are generally regarded as value-generating if the return on capital employed exceeds the cost of capital. Such capital costs correspond to the weighted average of equity costs and the cost of borrowed capital. In the 2010 fi nancial year, HHLA used a
EBIT – target indicator
EBIT Average operating assets Weighted average cost of capital in %
weighted average cost of capital of 10.5 % before tax to calculate its value growth at Group level. This cost of capital is based on management'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 short-term 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 a dialogue with customers – wherever allowed by the highly capital-intensive nature of the industry and investment projects that often take several years to be realized. Potential acquisition and investment possibilities that might constitute stra tegically 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 a result, the organization of feeder traffi c through the Baltic Sea port of Lübeck was discontinued during 2009.
ROCE grew in the 2010 fi nancial year as a result of the strong economic recovery. As the percentage growth in the operating result from continuing activities outstripped the increase in average operating assets, ROCE improved to 14.6 %. It was thus once again well above the weighted average cost of capital of 10.5 %. This represented another positive value contribution in 2010, with the Group recording an increase of € 8.7 million or 19.4 % on the previous year's fi gure.
| in € million | 2010 | 2009 | Change |
|---|---|---|---|
| Operating income | 1,114.8 | 1,024.5 | 8.8 % |
| Operating expenses |
- 924.1 | - 846.8 | 9.1 % |
| EBIT from con tinuing activities1 |
190.7 | 177.7 | 7.3 % |
| Average net non-current assets |
1,226.5 | 1,174.3 | 4.4 % |
| Average net current assets |
79.0 | 90.5 - 12.7 % | |
| Average operating assets |
1,305.5 | 1,264.8 | 3.2 % |
| ROCE in % | 14.6 | 14.1 | 0.5 pp |
| Relative cost of capital before tax 2 in % |
10.5 | 10.5 | – |
| Absolute cost of capital before tax 2 |
137.1 | 132.8 | 3.2 % |
| Relative value added in % |
4.1 | 3.6 | 0.5 pp |
| Absolute value added |
53.6 | 44.9 | 19.4 % |
1 EBIT unadjusted: € 192.9 million for 2010 and
€ 160.2 million for 2009
Of which 7.5 % for subgroup Real Estate
2
In the operating business units, various nonfi 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 optimization of specifi c operational processes, although they also serve the overriding objective of value-generating management. 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.
Employees
HHLA had a total of 4,679 employees at the end of 2010. Compared with the previous year's total, there are 81 employees less, or a decrease of 1.7 %. In geographical terms, the workforce was concentrated mainly in Germany, with 3,563 staff members (76 %), and particularly in Hamburg, where 3,472 are employed (74 %). The 1,116 jobs at foreign sites are located predominantly in the Ukraine, the Czech Republic, Slovakia and Poland.
by segment as of 31.12.
| 2010 | 2009 | Change | |
|---|---|---|---|
| Container | 2,891 | 2,961 | - 2.4 % |
| Intermodal | 777 | 751 | 3.5 % |
| Logistics | 441 | 475 | - 7.2 % |
| Real Estate | 38 | 40 | - 5.0 % |
| Holding / Other | 531 | 533 | - 0.4 % |
| Total | 4,679 | 4,760 | - 1.7 % |
The Container segment's workforce fell by 2.4 % to 2,891 (61.8 % of the entire workforce), primarily due to natural fl uctuation and an expanded part-time early retirement model. In the reporting year, the number of staff working in the Intermodal segment rose by 3.5 % to 777, thus comprising 16.6 % of HHLA's total workforce. Most of these jobs were created in Eastern Europe. As of year-end, the number of staff in the Logistics segment had fallen to 441 or 9.4 % of HHLA's employees. This reduction of 7.2 % represents the company's largest decrease in staff numbers. It was mainly due to the expiry of temporary contracts, not fi lling vacancies and reallocating staff within the Group. The Holding/Other division's workforce dropped 0.4 % to 531 employees, of which 497 (previous year: 502) are employed by HHLA Holding.
A collective bargaining agreement governs pay and working conditions for 92 % of the workers at German sites (previous year: 91 %). As in the previous year, the fl uctuation rate was 5.2 % at the German locations in 2010.
Due to the positive development in handling and transportation volumes in 2010, the Group was able to discontinue the short-time work scheme introduced as of 1 July 2009 at its affi liated companies in Hamburg as of 1 November 2010, with the exception of HHLA Logistics GmbH and HHLA Logistics Altenwerder GmbH & Co. KG. HHLA achieved its objective of avoiding oper ational redundancies. The qualifi cation program extended and enhanced by HHLA during the crisis will remain in place even after the return to normal working hours. HHLA used the period of short-time working to provide additional training for around 480 members of staff, thereby further expanding its employees' expertise. For example, 150 employees retrained – or are retraining – to become certifi ed specialists in port logistics. As part of its training campaign, HHLA offered over 30 different vocational and specialist training schemes for all career paths, such as port workers, skilled trades workers, administrative roles, technicians and programmers. The measures were developed with the valuable help of the Hamburg Employment Agency and various training providers. Particular importance was attached to tailor-made programmes which cover current and future challenges facing the port logistics industry. HHLA partnered with the Maritime Competence Centre (ma-co), HHLA's specialist college and external training providers to run the courses, which focused on combining theory with practice to achieve long-term learning results.
The "Securing the Future" project was pursued further in 2010. During intensive negotiations with employee representatives, far-reaching changes to the organizational and work structures were agreed for the Container Terminal Burchardkai (CTB). The work structure and the planning/ steering processes will be further optimized by means of a central framework and newly defi ned responsibilities, aligned with a view to current and future challenges. The reorganization will be phased in gradually.
Final negotiations have been conducted concerning the introduction of overlapping shifts and the associated alteration in working hours at CTB with the aim of increasing machine running times. The average employee age rose from 41 in 2009 to 42 in 2010 (men: 43; women: 38). This is primarily attributable to the reduction in recruitment due to the crisis, which automatically leads to an increase in the average age.
The majority of jobs at HHLA are in a segment of the labour market in which men are traditionally employed, and there is therefore a below-average percentage of women. In response to this, HHLA specifi cally offers women development opportunities in all areas and at all levels of the Group. The proportion of HHLA's workforce in Germany made up of women increased to 14.0 % (previous year: 13.8 %) as a result. In order to promote equal opportunities and diversity, in 2010, the Executive Board agreed on a minimum proportion of women of 20 % for all managerial positions. A systematic process is intended to plan managerial and specialist careers for female staff. Adjustments will also be made to the recruitment process. This is intended to ensure that HHLA can permanently meet its requirements for highly qualifi ed employees – both male and female. In this context, it is important to ensure that staff can reconcile work and family demands. The company does this by offering customized models for part-time working.
Despite uncertainty resulting from the economic climate at the beginning of 2010, the company remained heavily committed to further training in Hamburg. HHLA offered a total of 126 young people apprenticeship in the past fi nancial year.
HHLA is also continuously at work maintaining and improving the occupational safety of its workforce and protecting their health. The number of reportable accidents in Germany rose from its fi ve-year low of 88 in 2009 to 111 in 2010. This rise was largely attributable to a weather-related increase of accidents like falling, slipping and tripping during the winter months at the beginning of 2010.
HHLA's exemplary commitment to occupational safety was certifi ed in 2010 by the Ministry of Social Affairs, Family Affairs, Health and Consumer Protection. The company's occupational health and safety system was rated as excellent.
Purchasing is a shared service provided by the HHLA Group's management holding com pany. The central unit manages and coordinates all sourcing and procurement activities for the Group. The strategic focus of purchasing is to ensure the reliable and long-term availability of the required capital goods, raw materials, supplies, services and other products with regard to quality, price and environmental aspects.
In order to optimize central sourcing and procurement processes, purchasing is divided into four classes of goods. This enables the Group to pool its requirements and procurement activities and provide the best-possible service and quality for its internal customers.
In the 2010 fi nancial year, the construction class accounted for some 41 % of the Group-wide order volume (previous year: 21 %), followed by the MRO class (maintenance, repairs and operation) at around 32 % (previous year: 23 %). A 14 % share was attributable to equipment and energy (previous year: 45 %), while IT made up 13 % (previous year: 11 %). Contrary developments prompted a year-on-year shift in weighting between the classes of goods. While procurement in the construction goods class rose – due primarily to the establishment of additional inland terminals – and undertaking formerly postponed maintenance work caused an increase in MRO, the purchasing volume for the equipment/energy class fell due to an adjustment to the investment programme, associated with a reduction in purchases of large-scale equipment.
Overall, the procurement volume remained virtually on a par with the previous year's total. The Group utilized market opportunities to benefi t from more attractive purchasing conditions, especially for operating supplies. However, fuel became more expensive as the price of crude oil climbed.
The energy trading company established in October 2009 helped to pool demand more
Procurement volume by class of goods, 2010
41 % Construction 32 % MRO 14 % Equipment/energy 13 % IT
effect ively and to optimize the energy management. In the fi eld of procurement, it works closely with the Group's central purchasing unit. The Group achieved corresponding synergy effects in energy management and associated services during the 2010 fi nancial year. In light of price developments in the energy sector, the tranche model used to buy electricity proved to be advantageous. It allowed us to benefi t from low prices even during the 2010 fi nancial year.
The Group deliberately diversifi es its procurement activities. As a result, there were no signifi cant dependencies on individual suppliers in the 2010 fi nancial year, neither at Group nor at segment level. Against the background of volatile global economic developments, however, there was a further increase in the strategic integration of the Group's suppliers into the development of products, facilities and processes. At the same time, it is becoming more and more important to analyse and evaluate every aspect of the supplier relationship, such as reliability, quality, innovative strength, cost structures and economic stability.
It is also becoming increasingly important for suppliers to meet environmental requirements – not only regarding their products and services, but also their corporate strategy – especially as globalization continues to gather pace.
The timely procurement of supplies and replacement parts remains an important factor for the operational readiness of container handling equipment and thus places high demands on the fl exibility and automation of the procurement process. Although throughput and transportation volumes recovered more strongly than anticipated, purchasing was still able to rise to these demands in 2010. There were no supply bottlenecks during the reporting period.
The measures already introduced to optimize procurement processes were stepped up once again in 2010. As part of the drive to optimize procurement processes – based on the purchasing guidelines introduced in 2008 – an e-procurement system (SAP-SRM) was launched in addition to the existing digital contract documentation. This made processes faster, more transparent and easier to trace.
At the same time, the Group continued to incorporate subsidiaries into its central procurement processes, thus enhancing the overall level of service in its operating divisions.
Further steps were taken in 2010 to improve the Group's carbon footprint. As well as switching to green power for the HHLA Group's electricity consumers which are not involved in handling, the annual consumption of the HHLA Container Terminal Altenwerder for 2010 was rendered carbon-neutral.
A training programme specially designed for purchasing staff was run as part of the qualifi cation and skill-building initiative associated with HHLA's "Securing the Future" project. The programme focused especially on the various aspects of operational and strategic procurement.
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. A good example of how the company implements such innovations is the HHLA Container Ter minal Altenwerder, 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 unloading is conducted effi ciently. Especially in the case of container mega-ships, this leads to short lay times, giving the terminal a signifi cant edge over its competitors.
As a technological leader, HHLA is involved in researching new, eco-friendly drive systems. One current example of its work in this area is the development of a prototype battery-run AGV
(automated guided vehicle). AGVs are already used to transport containers at the HHLA Container Terminal Altenwerder (CTA). In future, they could be supplied with electric power via batteries. Together with the AGV manufacturer Gottwald Port Technology and several research bodies, HHLA has formed a syndicate to research battery-electric drive systems. The researchers have found that the new technology has certain advantages over diesel-electric drive systems as regards sustainability, as well as energy and maintenance costs. Gottwald Port Technology will now prepare the battery-powered AGV for large-scale production. The project is part of an sponsorship supported by the German Federal Ministry for the Environment.
From 2007 to 2010, HHLA also ran the OLAS project, which focused on optimizing logistics processes and new management procedures for the Container Terminal Altenwerder. This research project was sponsored by the German Federal Ministry of Economics and Technology (BMWi) and aimed to boost process integration and increase both container throughput and effi ciency at CTA, taking account of its hinterland links via road, rail and inland waterways. The project was successfully concluded in 2010. Other key projects completed include the development of the so-called multiple-load method for fully automatic, driverless transport vehicles or AGVs. The control software for these devices was expanded and optimized during test operations to allow two containers with different starting points and destinations to be transported simultaneously by a single AGV. At the same time, HHLA and the Technical University of Berlin (TU Berlin) conducted a simulation study for new approach and departure strategies for AGVs on the quayside. In another joint project with the TU Berlin and Gottwald Port Technology, HHLA developed a prototype for dynamic, optimized AGV routing. Other subprojects and results include automated chassis handling between the storage block cranes and rail loading, speeding up truck handling by using a truck appointment system with a self-service terminal, improving the management of empty container
movements, and designing and simulating both removal strategies for full containers and heavyload storage strategies.
Innovative technologies for German seaports and their hinterland links are being examined and developed as part of the support initiative "Innovative Seaport Technologies II" (ISETEC II). The aim is to enable them to cater for fast-growing transport volumes, which remain a long-term trend. Several HHLA companies are involved in various development projects. The main focus of these projects is to optimize operating processes and integrate new technologies at container terminals. Examples of how operating processes have been optimized include the integration of tandem container gantry cranes into processes and logistics management at the HHLA Container Terminal Burchardkai (CTB), the development of an innovative gantry crane monitoring system to boost productivity at the Container Terminal Altenwerder and the development of an innovative transport concept in the Intermodal segment with the aim of increasing train capacity utilization and making better use of the rail infrastructure at the port. Other subprojects include optimizing operations and maintenance in order to improve capacity utilization, increase the availability of machinery or improve occupational health and safety.
New technologies being integrated at the container terminals include the container ID system, a position detection system for port handling, and lean port management. Container ID enables boxes to be identifi ed automatically during the handling process and integrated into the information chain. Using an optical character recognition system (OCR) at the quayside means that checking processes can be performed faster and more reliably using an automatic identifi cation system. Position detection during port handling is designed to prevent delays during loading operations at the terminals. HHLA intends to put such a system in place for container handling by using innovative position detection technologies which are currently being tested. At CTB, the radio-based position detection system Symeo is already being phased in following successful analyses and tests. Lean port management strives to minimize port throughput times in order to make more effi cient use of existing resources and improve capacity utilization during the container import process. The most signifi cant packages of measures are the port-wide, customerfriendly standardization of critical information units, code lists and interfaces, the description and development of functions and services to integrate new customs requirements, and the creation of information platforms.
The research project VESUHV was also launched in 2010. Several companies from the Intermodal segment are involved in this initiative, which is dedicated to networking seaports and rail-bound hinterland transportation. Its aim is to establish standardized, timely and reliable data transfer between the German seaports and those involved in rail-bound hinterland transport with a view to improving the transport chain's performance.
In order to document its performance, the Container Terminal Altenwerder 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, perform ance level and effi ciency of a terminal on both the water and land sides, as well as its links to pre-carriage and on-carriage systems. With its successful certifi cation, CTA proved once again that it is one of the most productive container terminals in the world.
Since its foundation, HHLA attaches great importance to sustainable entreprenieurship. 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. For this reason, HHLA pursues a sustainable, long-term corporate strategy. 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.
HHLA's business model aims to provide an ecologically sound link between global goods fl ows at port terminals, on the one hand, and railways, 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 laying the foundations 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. They are constantly developed with an eye on the future. These efforts include the Group's targets to reduce its specifi c CO2 emissions by at least 10 % by 2015, compared with 2007 levels, and signifi cantly improve its facilities' land-usage productivity.
The measures implemented to minimize the impact of transport on the environment are rounded out by environmental and resource conservation measures. Well-trained employees are the foundation for all of the company's activities and when combined with exemplary occupational safety standards, they guarantee a high level of quality. HHLA's socially responsible activities focus on raising awareness of port and logistics-related issues. For example, the company intends to systematically extend its information programmes for schoolchildren and young people over the coming years.
HHLA's sustainability strategy is based on three pillars: environment, society and 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 also take a leading role in the area of sustainability.
The fi elds of activity focus on environmentally friendly transport chains, climate protection and surface area conservation. HHLA was the fi rst international port logistics provider to also regularly publish information about its carbon footprint as part of the international Carbon Disclosure Project (CDP). The company has been disclosing its carbon footprint since 2008. The CDP is a nonprofi 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
| Fields of activity | Guidelines | |
|---|---|---|
| Environment | Ecological transport chains | Active networking with other logistics operators and creation of sustainable, environmentally friendly transport chains |
| Space conservation | Increasingly effi cient use of port and logistics areas | |
| Surface conservation | Minimize impact on nature and actively protect natural habitats | |
| Climate protection | Utilize technically and economically viable means of reducing speci fi c CO2 emissions |
|
| Society | Occupational safety/ health protection |
Safety, appropriate working conditions and promotion of health-conscious behaviour |
| Staff development | Vocational education and training as well as 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 added value and consequently raise prosperity at all locations |
| Business partners | Tailor-made customer solutions and reliable cooperation with suppliers |
|
| Shareholders | Long-term increase in enterprise value and transparency for investors |
available. HHLA calculates its CO2 emissions on the basis on the Greenhouse Gas Protocol, a global standard for recording greenhouse gas emissions.
HHLA ranked fi fth in the Fraunhofer Supply Chain Services Transparency Index for Sustainability published in December 2010 and was deemed "highly transparent". The index assessed the 150 logistics providers around the world who generate the highest revenue.
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. Due to the strong growth in handling, energy consumption rose by 11.1 % to 592,795 MWh in the 2010 fi nancial year. However, the company succeeded in reducing its CO2 emissions by 0.7 % in the same period by raising the proportion of green electricity it uses. Of the total emissions, around 10,000 t of CO2 per annum are classifi ed as relatively fi xed, i.e. largely independent on actual operations. The Group reached its 2015 target of slashing specifi c CO2 emissions by 10 % much sooner than anticipated – in 2010. This was primarily due to the strong recovery in volumes combined with the prompt use of renewable energies in the year under review. HHLA will therefore set new targets for its CO2 emissions in 2011.
HHLA has been making greater use of power from renewable sources since 2009. As of this date, the electricity required by all buildings and workshops occupied by HHLA has come from renewable energies. The Container Terminal Altenwerder has been making exclusive use of green electricity since 2010. This reduced CO2 emissions by 16,575 tons in the reporting year (previous year: 3,000 tons) and enabled HHLA to improve its specifi c CO2 emissions per defi ned activity unit by 14.4 percentage points year on year. This explains the considerable change in CO2 emissions by equipment type compared to the previous year. In addition to power from renewable energies, a number of energy-saving projects at the various affi liates also contributed towards this positive development. For example, the "Multiple Load" project at the Container Terminal Altenwerder led to 292,000 kWh less electricity and 334,000 fewer litres of diesel being used in 2010. The initiative focused on optimizing control software to enable two 20-foot containers to be transported and transhipped at the same time.
A long-term increase in the percentage of electricity used within the Group's energy mix will enable the company to utilize 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 to electricity. In the year under review, preparations were made for a number of pilot and
1 % Storage cranes
The CO2 emissions are based on measured and calculated data as
at HHLA's sites in Germany and the Ukraine in m3
Source of added value Production value € 1.1 billion = 100 %
Application of added value
Added value € 502.1 million = 100 %
model projects using electrifi ed equipment and machinery. Together with the AGV manufacturer Gottwald Port Technology and several research bodies, HHLA has formed a syndicate to research battery-electric drive systems. see also page 68 et seq., Research and development. The project is supported by the German Federal Ministry for the Environment as part of the German government's National Electromobility Development Plan. An electrifi ed rail checkmobile has also been commissioned, which will reduce CO2 emissions by some eleven tons a year compared to the conventionally powered checkmobile previously used. During the year under review, a pilot scheme to test a hydrogen-powered forklift truck came to an end as scheduled. Hydrogen is not yet available at economically viable prices, but the technology proved practicable in principle. HHLA will therefore closely monitor further developments.
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 Hamburg and the Ukraine fell by 401 m3 or 0.5 % to 75,367 m3 in 2010.
Although the amount of waste produced at the Hamburg sites rose by 10 % year on year to 9,676 tons in 2010, it grew at a slower pace than handling volumes. The proportion of waste classifi ed as hazardous came to 41.3 % or 3,629 tons in 2009. In the reporting year, it dropped to 33.7 % or 3,261 tons. Of the total waste volume, 2,728 tons or 28.2 % was made up of overripe bananas and other foodstuffs unsuitable for processing or consumption. Almost 80 % of this food waste was recycled to generate biogas. In this way, some 480,000 kWh of zerocarbon electricity were produced in the reporting year. Some 2,266 tons or 23.4 % of waste was attributable to water collected at the washing and parking spaces for straddle carriers and AGVs. Commercial waste accounted for 9.0 % of waste, while about 6.8 % was paper waste. Scrap metal made up 6.5 % of the waste produced by HHLA, while engine/hydraulic oils and equipment containing oil accounted for 3.5 % of waste. The sharp fall in waste and freshwater use at the HHLA Container Terminal Tollerort during the year under review is very encouraging. For the fi rst time, this includes the effects of the chemical water treatment plant, which conserves resources on two counts, over a full twelve-month period. The water for cleaning the
straddle carriers is used several times by means of a treatment cycle. This eliminated more than 600 tons or 84.5 % of water/oil mixtures which have to be declared as waste, such as sludge from oil/water separators.
Thanks to positive developments in handling and transportation volumes, HHLA discontinued the crisis-related short-time work scheme in 2010, but retained its pioneering training programme at the Hamburg site. This training scheme safeguarded jobs and improved employees' career prospects. see also page 66 et seq., Employees. A total of 480 members of staff were trained during the programme, 50 of whom were also taught in energy effi ciency.
The number of reportable accidents in Germany climbed from 88 to 111 in 2010. This rise was attributable to a weather-related increase in accidents during the winter months. see also page 66 et seq., Employees.
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: an offi cial project which forms part of the United Nations Decade of Education for Sustainable Development. This 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 addition to this project, more than 100 children found out about sustainable developments and measures at HHLA on school trips to the terminals during Hamburg's "Climate Week".
Net added value rose by € 37.6 million to € 502.1 million in 2010. At 45 %, the added value ratio remained unchanged on the previous year. 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 amortization. Added value is shared between employees, shareholders, the public authorities (taxes) and lenders. The largest proportion, 66.2 % or € 332.5 million, went to employees. Shareholders accounted for the second-largest share of € 113.9 million
(22.7 %), followed by the public authorities with € 44.6 million (8.9 %) and payments to lenders amounting to € 11.1 million (2.2 %).
| in € million | 2010 | 2009 | Change |
|---|---|---|---|
| Employees | 332.5 | 325.7 | 2.1 % |
| Shareholders | 113.9 | 89.1 | 27.8 % |
| Public authorities | 44.6 | 36.9 | 20.9 % |
| Lenders | 11.1 | 12.8 | - 13.1 % |
| Total | 502.1 | 464.5 | 8.1 % |
In the course of 2010, the global economy recovered surprisingly quickly from its dramatic downturn. According to the International Monetary Fund (IMF), global gross domestic product (GDP) grew by 5 % in 2010, after falling almost 1 % in 2009. Following highly dynamic economic developments – due in part to pent-up demand – at the beginning of the year, the global economy entered a phase of more stable, moderate expansion in spring 2010. After having shrunk by 11 % in 2009, global trade volume rose 12 % over the full twelve months of 2010.
Economic development varied widely between individual economic regions, however. The recovery began early in the emerging nations. Although it levelled off from the start of the year, it had already outstripped the long-term growth trend again by the summer of 2010. Overall, the emerging markets achieved economic growth of 7 % in 2010. The slight fall in pace as the year progressed was partly due to the end of economic stimulus programmes and the return of restrictive monetary and fi nancial policies in certain countries, in order to counteract infl ationary pressure and the potential overheating of the real estate and capital markets. In the industrialized nations, the economic upswing only began to lose momentum from the middle of the year onwards. GDP in these nations grew by a total of 3 %, although output is still well below pre-crisis levels.
China remained the most important driver of growth in the emerging markets. GDP rose sharply until the third quarter and grew by over 10 % in 2010 as a whole. This strong upswing was driven largely by a marked increase in capital expenditure, mainly in the real estate sector. Private consumption also expanded thanks to strong growth in real income. With export growth of 31 % in 2010, foreign trade compensated for the crisis-related downswing, while imports grew even more strongly. The economies of Central and Eastern Europe – which were hard hit by the crisis – returned to growth in 2010 and recorded a 4 % rise in GDP. Russia's economic output climbed by almost 4 %, while GDP in the euro zone edged up by nearly 2 %.
The German economy proved to be Europe's economic engine in 2010, recording growth of 4 % after experiencing its deepest recession since the Second World War in 2009. Growth was driven mainly by foreign trade, although domestic demand also contributed. Exports grew 14 % in 2010, after falling 14 % in the previous year. Imports were up 13 %.
After shrinking by over 10 % in the previous year, global container throughput enjoyed signifi cant growth in 2010. According to current estimates, this growth came to around 13 % in 2010. After peaking at the beginning of 2010, the number of ships laid up around the world declined considerably as the year progressed. At the end of 2010, roughly 2.5 % of global container ship capacity was redundant. When shipping companies introduced so-called slow steaming – decreasing ship speeds with a disproportionately high reduction in fuel consumption – the resulting extension in voyage times meant that additional tonnage was also absorbed by existing services. As demand picked up, freight rates made a good recovery. However, the level dipped again somewhat at the end of the year. This remarkably improved shipping companies' earnings position following the high losses they experienced in the previous year. Experts estimate that worldwide container shipping companies may have generated earnings of up to \$17 billion in 2010.
The ports in the Hamburg-Antwerp Range (Hamburg, Bremen/Bremerhaven, Rotterdam, Antwerp) recorded a total throughput of 32.4 million standard containers (TEU) in 2010, corresponding to growth of 13.2 % on the previous year. Container throughput at the Port of Hamburg rose by 12.7 % to 7.9 million TEU. Although the recovery in Hamburg commenced much later in the year than at the western ports, it proved sequentially stronger.
| Growth in gross domestic product (GDP) | |||||
|---|---|---|---|---|---|
| -- | -- | ---------------------------------------- | -- | -- | -- |
| in % | 2010 | 2009 |
|---|---|---|
| World | 5.0 | - 0.6 |
| Emerging markets | 7.1 | 2.6 |
| Industrialized countries | 3.0 | - 3.4 |
| China | 10.3 | 9.2 |
| Central and Eastern Europe | 4.2 | - 3.6 |
| Russia | 3.7 | - 7.9 |
| Germany | 3.6 | - 4.7 |
| World trade | 12.0 | - 10.7 |
| Source: IMF |
The recovery was driven by shipping regions of particular importance to the Port of Hamburg – North-East Asia and the Baltic region. Container throughput here climbed by 18.4 % and 19.9 %, respectively in 2010. Together, the two shipping regions accounted for around three quarters of Hamburg's total container throughput in 2010. Hamburg profi ted strongly from growth on the major Far East services, which link this region with Europe using the largest container ships currently in operation. These mega-ships have a capacity of up to 14,000 TEU or more. As a result, the number of ships berthing in the Port of Hamburg with a capacity of over 10,000 TEU rose strongly – increasing from 69 in 2009 to 125 in 2010.
During the year under review, Hamburg succeeded in maintaining and extending its strong links to the European hinterland. With 154 weekly departures to the Baltic region, Hamburg has the densest feeder network serving this area. In 2010, containers with a total volume of 1.9 million TEU were transported by rail. This represents an increase over the previous record of from 2008, and once again underlines the Port of Hamburg's leading position in this market.
As the year progressed, the companies that make up the Intermodal segment benefi tted from an increasingly positive market environment. The number of containers and swap bodies transported in Germany climbed by 10 % in the fi rst three quarters of 2010. Despite this rising volume, competition remained fi erce. Although rail freight rates stabilized progressively over the course of the year, prices for rail transport in Germany crept up by just 1 % overall.
Overall, the German logistics sector also returned to a clear path of recovery and growth. Following a double-digit percentage fall in revenue in 2009 due to the recession, estimates put the increase in sector revenue at 9 % for 2010. As the end of the year approached, the industry's business confi dence indicators painted an increasingly positive picture.
| in € million | 2010 | 2009 | Change |
|---|---|---|---|
| Revenue | 1,073.1 | 990.7 | 8.3 % |
| EBITDA | 306.9 | 277.5 | 10.6 % |
| EBITDA margin in % | 28.6 | 28.0 | 0.6 pp |
| EBIT | 192.9 | 160.2 | 20.4 % |
| EBIT margin in % | 18.0 | 16.2 | 1.8 pp |
| EBIT from continuing activities 1 | 190.7 | 177.7 | 7.3 % |
| EBIT margin from continuing activities in % | 17.8 | 18.0 | - 0.2 pp |
| Profi t after tax and minority interest | 76.2 | 53.0 | 43.7 % |
1 EBIT without one-off restructuring effects of CTL (previous year: CTL and combisped)
Overall view. In the management team's opinion, the 2010 fi nancial year was highly satisfactory. Following a year dominated by the fi nancial and economic crisis in 2009, HHLA profi ted greatly from the strong global economic recovery in the year under review. The company succeeded in meeting the Group revenue forecast in full. Originally made in the 2009 annual report, this
| Forecast 31.03.2010 |
Forecast 12.05.2010 |
Forecast 13.08.2010 |
Forecast 12.11.2010 |
Actual 31.12.2010 |
|
|---|---|---|---|---|---|
| Revenue | in the region of € 1 billion, below previous year |
in the region of € 1 billion |
in the region of € 1 billion, above previous year |
over of € 1 billion |
€ 1,073.1 million |
| EBIT margin | double-digit margin |
margin in the region of 15 % |
margin of at least 15 % |
earnings in the region of € 180 million |
€ 192.9 million 18.0 % margin |
forecast was subsequently corrected upwards in the course of the year due to the unexpectedly sharp rise in demand. Moreover, HHLA even slightly exceeded its EBIT forecast and increased its net profi t for the year, after minority interests, at a faster rate than the operating result. In addition, HHLA took important steps to safeguard further growth by continuing to pursue forwardlooking projects, such as establishing its own, high-performance inland terminals.
Note 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, such as in other industries.
In order to provide a consistent reporting format, EBIT from continuing activities, which has been included since the second quarter of 2009, has been retained again in the 2010 fi nancial year. In the previous year, the difference to regular EBIT stemmed from one-off restructuring expenses and operating losses at two companies in the Intermodal segment, which were classifi ed as discontinued operations (total impact in 2009: € 17.5 million). One of the companies was sold and deconsolidated in 2009; with the other, the operating assets were sold in summer 2010. This generated total income of € 2.2 million, largely from the revaluation of property, plant and equipment.
Since the beginning of the 2010 fi nancial year, expenses for port-related external staff have been recognized in personnel expenses rather than in the cost of materials, as was previously the case. Although staff from Gesamthafenbetriebs-Gesellschaft (GHB) are fl exibly deployed according to demand, they have an employee-like relationship with the company. Reclassifying these costs as personnel expenses is therefore more accurate. The following information takes a corresponding reclassifi cation between these two expense items into account. The fi gures for the previous year have been restated accordingly. This does not affect the operating result.
As a result of the profi t and loss transfer agreement concluded within the Container segment during the reporting year, there is a conditional payment commitment to a minority shareholder which is classifi ed as debt capital in accordance with IAS 32 (Financial Instruments). The total anticipated fi nancial settlement for the absorption of estimated future results therefore led to a balance-sheet reclassifi cation from minority interests to other fi nancial liabilities.
The group of consolidated companies changed in the 2010 fi nancial year as a result of the entry of one company and the merger of three other companies. However, this had no material impact on revenue or results at Group level. see also page 122 et seq., Notes to the Consolidated Financial Statements.
Currency effects also had no material impact on the earnings position of the Group. The 2010 Consolidated Financial Statements were prepared in accordance with the International Financial Reporting Standards (IFRS) applicable in the European Union, taking the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) into consideration.
Revenue and earnings. The performance data which has a material infl uence on the majority of Group revenue was largely shaped by an extremely strong recovery in international container traffi c during the 2010 fi nancial year. As the year progressed, HHLA was able to capitalize increasingly effectively on the economic upturn and to improve its market position in comparison to rival ports in Northern Europe, increasing its business volume considerably. Container throughput in the Container segment rose by 19.0 % to 5.8 million TEU in the year under review (previous year: 4.9 million TEU) as a result of gaining additional shipping services or regaining existing ones and an increase in freight volume per ship call. Hinterland traffi c in the Intermodal segment also benefi t ted from the economic recovery with rail and road business reporting strong, double-
digit growth of 13.1 % and transport volumes of 1.7 million TEU (previous year: 1.5 million TEU).
In a highly competitive market, particularly for feeder services, the HHLA Group generated revenue of € 1,073.1 million in total. Although the increase in Group revenue was unable to match volume growth, the fi gure climbed by 8.3 % compared to the previous year (€ 990.7 million) despite lower storage charges, ongoing price pressure and shifts in the handling shares of feeder and overseas services. The stock-exchange-listed Port Logistics subgroup benefi tted in particular from the positive economic trend with its Container, Intermodal and Logistics segments and Holding/Other division. see also page 78 et seq., Segment report. In this subgroup HHLA generated revenue growth of 8.4 % to € 1,044.1 million (previous year: € 962.9 million) in the 2010 fi nancial year. This caused the proportion of the Group's total external revenue accounted for by the Port Logistics subgroup to achieve to 97.1 % (previous year: 97.0 %). The proportion attributable to the Real Estate subgroup fell accordingly to 2.9 % (previous year: 3.0 %) although revenue increased by 3.8 % to € 34.0 million (previous year: € 32.7 million).
At € -1.1 million (previous year: € 0.4 million), changes in inventories were down slightly on the previous year at Group level. Own work capitalized was also somewhat below the previous year's fi gure (€ 8.3 million) at € 7.4 million, due largely to a change in the amount of software developed internally by the company. Other operating income grew from € 29.2 million in the previous year to € 37.8 million in the reporting period. This was primarily due to lower utilization of the provisions for phased early retirement – caused by the employment situation – and the revaluation of property, plant and equipment held by a company that was discontinued.
Expenses. Operating expenses increased at a much lower rate than throughput and transport volumes in the 2010 fi nancial year. On the basis of continuing activities, the total went up by 9.1 % in the year under review as compared with last year's considerably reduced fi gure. As volumes recovered, capacity utilization improved for both the HHLA Group's handling facilities and its transport systems. This enabled the company to compensate almost entirely for the lower earnings quality via costs management. Operating expenses therefore developed virtually hand in hand with revenue.
The cost of materials, which is largely dependent on volumes, climbed by 15.6 % compared to the previous year's fi gure, coming in at a total of € 372.4 million (previous year: € 322.1 million). It therefore increased roughly on a par with volumes. The expenses posted under this item were infl uenced very strongly by purchased rail services in the fi eld of intermodal traffi c (particularly locomotive and track use). The higher transportation volume was largely responsible for the increase here. Procurement costs for fuel, energy and replacement parts also rose due to the higher volume of business. Overall, the ratio of cost of materials to revenue was 34.7 % (previous year: 32.5 %).
By contrast, the rise in personnel expenses remained well below volume growth, and at 2.6 %, the increase to € 316.8 million (previous year: € 308.7 million) also fell far short of the growth in revenue. As a consequence, the ratio of personnel expenses fell to 29.5 % of revenue, compared to 31.2 % in the previous year. Expenses for external staff, who are largely involved in handling, also grew due to increased demand. The use of short-time working hours in line with demand however was largely responsible for relieving this item, along with lower mandatory contributions to the German pension insurance scheme and fewer employees. Short-time working was only suspended in key parts of the company in late autumn. In the previous year, personnel expenses also included the impact of offering an extended range of phased early retirement options. Against the background of a considerable increase in demand, full use was not made of the options available in 2010. However, the scheme had a satisfactory outcome in terms of safeguarding jobs, as intended.
Other operating expenses increased by 0.7 % to € 121.0 million (previous year: € 120.2 million) in the reporting period. Higher maintenance costs, resulting from postponed servicing work and repairs to weather-related surface damage along with scheduled adjustments to the lease expenses for land and quay walls, were offset mainly by savings in advisory services. Taking into account a deconsolidation loss of € 3.0 million associated with the sale of a company in the previous year, HHLA was still able to keep the
13 % Depreciation / amortization
increase well below the level of revenue growth. The ratio of other operating expenses to revenue fell accordingly to 11.3 % (previous year: 12.1 %).
Depreciation and amortization dropped by 2.8 % compared to the previous year, coming in at € 114.0 million (previous year: € 117.3 million). The ratio of depreciation and amortization to revenue was 10.6 % (previous year: 11.8 %). Comparison with the previous year is affected by one-off expenses, however. In 2010, an impairment of € 3.0 million was realised on goodwill in the Intermodal segment. Furthermore, the restructuring of Lübeck traffi c in the same segment prompted write-downs totalling € 11.7 million in the previous year. Adjusted for these effects, depreciation and amortization climbed by 5.1 % as a result of on going investments. Key projects included taking additional ship berths in Hamburg into operation and the opening of a new hinterland terminal in Poland.
Earnings. Against the background of these developments, the operating result before depreciation and amortization (EBITDA) rose by 10.6 % to € 306.9 million (previous year: € 277.5 million). The EBITDA margin therefore edged up to 28.6 % (previous year: 28.0 %).
After depreciation and amortization, the operating result (EBIT) came in up 20.4 % at € 192.9 million (previous year: € 160.2 million). Based on continuing activities, i.e. adjusted for the abovementioned income from the revaluation of property, plant and equipment at a company that was discontinued, the Group improved its EBIT to € 190.7 million (previous year: € 177.7 million). The EBIT margin from continuing activities was 17.8 % (previous year: 18.0 %). Of the total EBIT, the Port Logistics subgroup generated 93.3 % while the Real Estate subgroup contributed 6.7 %.
Interest income in the fi nancial result fell to € 5.0 million (previous year: € 5.6 million), primarily due to lower interest on the Group's credit bal ances. Despite a slight increase in fi nancial liabilities, interest expenses remained virtually unchanged at € 39.9 million on the previous year's level.
At 28.1 %, the effective tax rate was lower in the reporting period than in the previous year (29.3 %). This was largely due to a shift in earnings to Group
companies with lower tax rates and a one-off reduction due to changes in the taxation of property management subsidiaries. Without this non-recurring effect, the tax rate would have been similar to the previous year's.
In light of these developments, consolidated profi t after tax and minority interests rose at a faster pace than the operating result, soaring by 43.7 % to € 76.2 million (previous year: € 53.0 million). In relation to profi t after tax, the proportion attributable to shareholders of the parent company also went up signifi cantly compared with the previous year, mainly due to the above-average recovery in volumes at facilities owned solely by HHLA and the absence of the one-off expenses from 2009. Earnings per share improved correspondingly by 43.7 % to € 1.05 (previous year: € 0.73). The publicly listed Port Logistics subgroup achieved a 49.3 % increase in earnings per share to € 1.00 (previous year: € 0.67). Earnings per share for the unlisted Real Estate subgroup remained on a par with the previous year at € 2.34. As in the previous year, there was no difference between basic and diluted earnings per share in 2010.
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 € 86.5 million, according to the German Commercial Code (HGB), for the 2010 fi nancial year. Of this sum, € 81.8 million is accounted for by the A division (Port Logistics subgroup) and € 4.7 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 16 June 2011 that a dividend of € 0.55 per Class A share and € 1.20 per Class S share will be distributed. Accordingly, the sum distributed for the Class A shares would therefore increase by more than 37 % to € 38.5 million and the amount for Class S shares would rise by 20 % to € 3.2 million. In relation to the consolidated profi t and the earnings per share, the dividend payout ratio would once again reach a comparably high fi gure of 55.1 % for the Port Logistics subgroup and 51.2 % for the Real Estate subgroup.
EBIT
| in € million | 2010 | 2009 | Change |
|---|---|---|---|
| Revenue | 605.3 | 561.6 | 7.8 % |
| EBITDA | 236.3 | 225.5 | 4.8 % |
| EBITDA margin in % | 39.0 | 40.2 | - 1.2 pp |
| EBIT | 155.7 | 149.6 | 4.1 % |
| EBIT margin in % | 25.7 | 26.6 | - 0.9 pp |
| Container throughput in thousand TEU | 5,844 | 4,913 | 19.0 % |
In the 2010 fi nancial year, the Container segment experienced a stronger and faster recovery in throughput than initially anticipated. Container handling at the HHLA terminals in Hamburg and Odessa increased by 19.0 %, or 931 thousand standard containers (TEU), taking the total to 5,844 thousand TEU (Hamburg: 5,548 thousand TEU; Odessa: 296 thousand TEU). Thanks to this dynamic trend in volumes, HHLA not only grew considerably faster than the Port of Hamburg (12.7 %), but also increased its market share in the Hamburg-Antwerp Range. However, this trend only emerged at the HHLA terminals in March 2010, and peaked in the fourth quarter with growth of 29.6 % – the largest year-on-year increase. Although the full-year result fell 20 % short of the record 2008 fi gure, the gap between the second half of 2010 and the same period in 2008 was narrowed to just over 10 %.
The Far East and Baltic shipping routes accounted for the majority of this growth. At 512 thousand TEU (+ 23.3 %) and 143 thousand TEU (+ 30.4 %), respectively, they accounted for 70 % of the 931 thousand TEU total increase in volume. Growth was also strong in both North American (105 thousand TEU, 46.8 %) and South American traffi c (65 thousand TEU, 21.7 %). With 48.6 % share of total throughput volume at HHLA's Hamburg terminals, the Far East traffi c region maintained its leading position, well ahead of Scandinavia (11.2 %) and the Central/Eastern European Baltic region (11.0 %). South and North America followed with 6.5 % and 5.9 %, respectively.
Segment revenue climbed 7.8 % to € 605.3 million (previous year: € 561.6 million), but was unable to keep pace with the trend in volumes. This was mainly due to the sharp fall in storage charges caused by shorter container storage times at the HHLA terminals, coupled with price incentives to attract feeder traffi c back to the terminals and their increased share of the loading mix. Thanks to the development and successful implementation of an extensive package of measures to make cost structures more fl exible, the segment's rise in costs remained well below the volume trend at 9.1 %.
As the growth in throughput gathered pace over the course of the year, the company succeeded in signifi cantly improving its EBITDA and EBIT earnings fi gures for the full year, which had been down 8.5 % and 13.4 %, respectively, on the previous year after the fi rst half of 2010. However, EBITDA subsequently rose 4.8 % year on year to € 236.3 million (previous year: € 225.5 million), while EBIT grew 4.1 % to € 155.7 million (previous year: € 149.6 million). Although profi t margins are still currently below the record 2008 fi gures at 39.0 % (EBITDA) and 25.7 % (EBIT), they are above average for the industry in the current environment.
HHLA further boosted its performance and secured additional freight fl ows for the Port of Hamburg in the 2010 fi nancial year, using a host of measures, which helped the company recapture market share. One example of the steps taken is the work to establish and expand mega-ship berths at the HHLA Container Terminals Burchardkai and Tollerort. At Burchardkai, a stateof-the-art block storage facility was also put into operation. The new berths play a crucial role in serving the needs of a growing number of container mega-ships with a capacity of 10,000 TEU or more. Such ships place great demands on the terminals with their need for fast, punctual handling in line with customer requirements. Other steps which substantially increased Hamburg's attractiveness included the opening of the feeder coordination centre – which optimizes workfl ows for feeder vessels at the Port of Hamburg – and the systematic expansion of the intermodal network for transporting containers in the German seaports' European hinterland. see also next chapter, Intermodal segment. Increased capacity and improved handling for larger ships are also the main objectives of the expansion project launched at the Container Terminal Odessa in 2010. By spending an equivalent of around € 70 million, the project will create deep-water berths and enlarge the area of the terminal by 2012. This is crucial if the terminal is to continue to capitalize on the opportunities offered by volume growth in this region.
| in € million | 2010 | 2009 | Change |
|---|---|---|---|
| Revenue | 317.3 | 277.3 | 14.4 % |
| EBITDA | 42.5 | 31.6 | 34.6 % |
| EBITDA margin in % | 13.4 | 11.4 | 2.0 pp |
| EBIT | 24.8 | 4.4 | 462.6 % |
| EBIT margin in % | 7.8 | 1.6 | 6.2 pp |
| EBIT from continuing activities 1 | 22.6 | 21.9 | 3.2 % |
| EBIT margin from continuing activities in % | 7.1 | 8.0 | - 0.9 pp |
| Container transport 2 in thousand TEU | 1,696 | 1,500 | 13.1 % |
1 EBIT without one-off restructuring effects of CTL (previous year: CTL and combisped)
The transport volume was fully consolidated
With 13.1 % growth in transportation volume to 1,696 thousand standard containers (TEU), the companies in the Intermodal segment almost regained their pre-crisis levels during the 2010 fi nancial year. The fi gures even substantially exceeded these levels on certain routes. This applies in particular to those companies and transport routes which offer a high value added and high level services, which are tailored to the quality and volume requirements of maritime logistics. These include the HHLA subsidiary Metrans, for example, which links the Czech Republic, Slovakia and Hungary directly with the container terminals at the German seaports via its system of shuttle trains and its own network of large inland terminals. Metrans succeeded in increasing transport volumes by more than 30 % on its main route between Hamburg and Prague in 2010.
In 2010, there were similarly dynamic developments in handling volumes at the inland terminals which are majority-owned by HHLA or its subsidiaries. Container throughput at these facilities grew 37.2 % to 1,227 thousand TEU (previous year: 894 thousand TEU). Thanks to the strong growth in rail traffi c, this mode of transport also signifi cantly raised its market share within the competitive intermodal sector. The share of hinterland traffi c to and from the Port of Hamburg via rail transport rose to 36.7 % in 2010 alone. In 2000, the fi gure was just 28.1 %. Although trucks still dominate the transport mix within the greater Hamburg metropolitan region due to the large volume of local freight traffi c (2010: 61.6 %; 2000: 70.9 %), the rail network has long since extended its share of long-distance traffi c to well over 70 %.
Despite this highly dynamic development in volume within the overall market for maritime container logistics in Europe's hinterland transport, there was only slight relief in the strong competitive pressure of this sector during the course of the year. The company was only able to push through price increases for certain transport services towards the end of the year. This makes the 14.4 % rise in revenue to € 317.3 million (previous year: € 277.3 million) all the more remarkable, as it outstripped the growth in volumes.
The development of EBITDA and EBIT has only limited meaningfulness, as these earnings fi gures include the net effects of special items and widely varying performance fi gures for individual companies. After including the book gains from selling container gantry cranes in Lübeck (€ 2.2 million), for example, segment EBITDA climbed 34.6 % to € 42.5 million (previous year: € 31.6 million). Without consideration of activities in Lübeck that were discontinued last year and proceeds of € 2.2 million in 2010, EBIT from continuing activities reached € 22.6 million and thus came in 3.2 % above the prior-year fi gure. Per mid-year, the decline in EBIT was still 23.7 %. Earnings therefore stabilized appre ciably over the course of the year. The EBIT trend would have been even more positive if HHLA had not adjusted the goodwill recognized for TFG Transfracht by € 3.0 million. This adjustment was made because of the unsatisfactory development during the reporting period and the realignment of the company's business activities that is expected to take some time. The realignment will establish a signifi cantly larger share of direct and shuttle trains. As it will take some time for the optimized management and scheduling processes to become established, the changes are only expected to have an effect on earnings from the second half of 2011.
Efforts to expand HHLA's intermodal network in 2010 focused on consistently enhancing all intermodal activities in order to set up high-performance, integrated transport chains between the seaport and customers in its European hinterland. This means gradually rolling out the successful business model used for transport routes in south-eastern Europe to other regions. As part of the programme, TFG Transfracht increased its share of direct trains from 10 % in 2009 to 30 % in 2010. There are plans for a further increase to 50 % in 2011. In March 2010, HHLA and Eurogate set up the joint venture IPN Inland Port Network. The joint venture is currently preparing to establish a network of inland terminals in Germany. This new network will meet the quality requirements of maritime logistics and offer much more favourable conditions for stepping up the use of shuttle connections. To further improve transport for the "last mile" between inland terminals and customers' premises, the HHLA subsidiary CTD together with EKB, a Bremen-based transport company, established the joint venture CIT Container Inland Trucking in July 2010. CIT will set up a comprehensive, road-based delivery network for inland terminals in Germany. In Poland, the focus was – and remains – on establishing highperformance inland terminals. At the end of June 2010, a new container terminal was inaugurated in the Polish city of Katowice. In 2011, a terminal will also open in Poznán. Metrans also intends to gradually extend its terminal network.
| in € million | 2010 | 2009 | Change |
|---|---|---|---|
| Revenue | 120.4 | 114.9 | 4.8 % |
| EBITDA | 13.2 | 14.0 | - 6.0 % |
| EBITDA margin in % | 11.0 | 12.2 | - 1.2 pp |
| EBIT | 6.2 | 8.2 | - 25.0 % |
| EBIT margin in % | 5.1 | 7.2 | - 2.1 pp |
The Logistics segment's operating performance during the year under review was shaped largely by the economic recovery of 2010. Within the wide range of services offered by the segment's companies – from special logistics (vehicles, fruit, dry bulk goods) to contract logistics and consultancy services – there was growth in both volumes and revenue. The only exception was fruit logistics, which suffered a fall in volume during
2010 as a result of changes in service scheduling by one shipping company. This resulted in a 21.3 % fall in fruit handling tonnage to 779 thousand tons (previous year: 990 thousand tons).
By contrast, the volume of vehicle and general cargo logistics increased by a total of 10.4 % to 1,292 thousand tons (previous year: 1,171 thousand tons). This was largely thanks to growth
in vehicle handling of 48.3 % to 170 thousand units. Dry bulk goods handling leapt by 31.8 % from 10.4 million tons in 2009 to 13.8 million tons. This was mainly due to the recovery in demand for ore, which currently comprises just over 11 % of total throughput at the Port of Hamburg. The cruise business picked up at an even faster rate with growth of more than 30 % in the number of ships coming into port. Passenger numbers doubled to about 250,000. Around the world, demand was also higher for the HPC Group's consultancy services in 2010 than in the previous year. Within contract logistics, project business experienced a notable upswing. However, intensive price-based competition and an unsatisfactory capacity utilization still had a negative overall impact on segment earnings in warehouse and contract logistics.
The varying development in revenue and earnings fi gures was due to a large number of factors. In view of the lower margins typical of this industry, even smaller factors can prompt fl uctuations in earnings and thus lead to a destocked picture of the segment's operating performance. Factors which impacted on the result here included, for example, the formation of provisions for phased early retirement. As a consequence, EBITDA amounted to € 13.2 million and fell short of the previous year's result (€ 14.0 million) by 6.0 %. Meanwhile, the 25.0 % decrease in EBIT to € 6.2 million (previous year: € 8.2 million) was attributable to a rise in depreciation and amortization caused by investing activity. In spite of this, the profi t margins of 11.0 % (EBITDA) and 5.1 % (EBIT) achieved in 2010 remain noticeable by industry standards.
in the Logistics segment
| 2010 | 2009 | |
|---|---|---|
| Fruit handling in thousand tons | 779 | 990 |
| Vehicle and general cargo logistics in thousand tons |
1,292 | 1,171 |
| Bulk cargo handling in million tons |
13.8 | 10.4 |
| Cruise ship calls | 99 | 76 |
| in € million | 2010 | 2009 | Change |
|---|---|---|---|
| Revenue | 34.0 | 32.7 | 3.8 % |
| EBITDA | 16.8 | 16.4 | 2.2 % |
| EBITDA margin in % | 49.5 | 50.2 | - 0.7 pp |
| EBIT | 12.7 | 12.3 | 3.2 % |
| EBIT margin in % | 37.4 | 37.6 | - 0.2 pp |
According to the current market overview by Jones Lang LaSalle, the offi ce rental market in Germany's real estate hotspots experienced a signifi cant upturn in the course of 2010. A total of 502,800 m² of offi ce space was let in Hamburg, representing an increase of around 28 % on the previous year. A sustained high level of new offi ce space construction – not matched by a corresponding rise in demand – drove the vacancy rate up to 9.6 %. However, the fi gure did not exceed the 10 % mark, as experts had originally feared. Nevertheless, Hamburg experienced a sharper increase in its vacancy rate than any other major German city over the past twelve months.
In this increasingly competitive market environment, the HHLA properties in the Speicherstadt historical warehouse district and in the Fischmarkt area on the northern bank of the Elbe developed positively. Revenue climbed 3.8 % in comparison to last year to € 34.0 million (previous year: € 32.7 million). During the period under review, EBITDA reached € 16.8 million – up 2.2 % on the previous year's € 16.4 million. EBIT improved by 3.2 % to € 12.7 million (previous year: € 12.3 million). With EBITDA at 49.5 % (previous year: 50.2 %) and EBIT at 37.4 % (previous year: 37.6 %), profi t margins remained virtually unchanged on the year and illustrated the subgroup's strong earnings power.
The cautious redevelopment of the Speicherstadt historical warehouse district continued in 2010 with new lets and continued project development. Companies from the communications and creative industries occupy more than 80,000 square metres there, making the Speicherstadt district one of the preferred locations for agencies in Hamburg.
Sensitive development work also continued on the structure and usage of HHLA's properties on the northern banks of the river Elbe. Following the successful conclusion of an architecture competition in June 2010, preparations are now under way for a major new construction project here with an architecturally sophisticated blend of residential and commercial space as well as cafés and restaurants.
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, optimizes 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 Financial Statements.
Following positive business developments in 2010, HHLA is in a markedly stable fi nancial position at the time of preparing these 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 40.1 % (previous year: 40.0 %) before fi nancial settlements to minority shareholders.
As a result of the profi t pooling contract concluded within the Container segment during the reporting year, there is a conditional payment commitment which is classifi ed as debt capital in accordance with IAS 32 (Financial Instruments). To compensate for the contractually agreed profi t pooling, an annual payment must be made to a minority shareholder for an initial period of fi ve years. This payment is based primarily on future results. The total anticipated fi nancial settlement therefore led to a balance-sheet reclassifi cation from minority interests to other fi nancial liabilities. Taking this new balance sheet representation into account, the regular equity ratio comes to 33.1 %.
Thanks to the company's comfortable liquidity base as of the balance sheet date, it has no signifi cant refi nancing requirements.
HHLA's core business is dominated by a large proportion of property, plant and equipment with long useful lives. For this reason, HHLA mainly uses medium and long-term loans and fi nance leases to achieve funding with matching maturities.
At € 298.9 million, its liabilities from bank loans were below their previous year's level (€ 330.0 million) in the 2010 fi nancial year. The decline was primarily a result of loan repayments amounting to € 31.3 million (previous year: € 34.3 million). The Group did not draw on any additional external fi nancing in the year under review (previous year: € 64.2 million). 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 also no other signifi cant refi nancing requirements.
The majority of the loans are denominated in euros and have a mixture of fi xed and fl oating interest rates. As a result of borrowing, certain affi liates have covenants linked to key balance sheet fi gures (relevant for 27 % of loans). The covenants were met at all agreed audit points throughout the reporting year. HHLA recognized non-current liabilities to related parties for the fi rst time on the balance sheet date. The amount of € 65.7 million resulted from the recognition of leasing liabilities to Hamburg Port Authority in connection with the mega-ship berths at the HHLA Container Terminal Burchardkai and the HHLA Container Terminal Tollerort. With the exception of the operating leases discussed in the Notes, there are no signifi cant off-balance sheet fi nancial instruments. see also page 133, Notes to the Consolidated Financial Statements. These operating leases relate primarily to long-term agreements with the Free and Hanseatic City of Hamburg and 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 available for long-term fi nancing.
Cash and cash equivalents, the bulk of which is held centrally by the holding company, totalled € 235.5 million (previous year: € 173.5 million) as of the reporting date. These funds are invested at German fi nancial institutions with verifi ed high credit ratings as call money and short-term deposits. Current credit lines play a subordinate role due to HHLA having suffi cient liquid funds. As of the balance sheet date, the Group had unused credit facilities amounting to some € 26.7 million (previous year: € 30.5 million). In HHLA's view, the Group's solid balance sheet structure would enable more substantial credit facilities to be arranged at any time if its mediumterm liquidity planning were to reveal a need. Of the total cash and cash equivalents, € 21.5 million (previous year: € 11.8 million) was subject to restrictions in the 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.
The investment volume in the past fi nancial year totalled € 173.8 million and was higher than the previous year's € 159.7 million. This was attributable to additions to assets of € 66.1 million within the scope of fi nance leases pertaining to new quay walls for handling operations, which do not have an immediate effect on cash fl ow. This effect was compensated by postponing some investments to subsequent years. Property, plant and equipment accounted for € 158.9 million (previous year: € 149.7 million) of capital expenditure, € 7.9 million (previous year: € 7.5 million) was for intangible assets and € 7.0 million (previous year: € 2.5 million) for investment property.
The largest share of the Group's aggregate investment was accounted for by the Container segment with € 137.9 million (previous year: € 96.5 million). The new quay walls and the commissioning of new container gantry cranes at the handling facilities in Hamburg accounted for the majority of investments.
Total investment in the Intermodal segment amounted to € 21.0 million, short of its previous year's level of € 35.9 million. The Metrans Group invested further in expanding sites and procuring railcars. At the Polish companies, work continued on the planned expansion of the terminal network.
Total investments in the Logistics segment came to € 3.7 million (previous year: € 20.2 million). The majority of this expenditure consisted of payments on account for the planned acquisition of two multifunctional devices and two shunting locomotives for bulk cargo handling.
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 optimization of its logistics activities in line with market requirements.
Of the obligations from outstanding purchase commitments, € 44.2 million related to the capitalization of property, plant and equipment.
Change in financial funds
| in € million | 2010 | 2009 |
|---|---|---|
| Financial funds as of 01.01. | 179.2 | 231.2 |
| Cash fl ow from operating activities |
206.9 | 193.2 |
| Cash fl ow from investing activities |
- 56.3 | - 157.3 |
| Free cash fl ow | 150.7 | 35.9 |
| Cash fl ow from fi nancing activities |
- 95.2 | - 88.6 |
| Change in fi nancial funds | 55.5 | - 52.7 |
| Change in fi nancial funds due to exchange rates |
- 1.0 | 0.7 |
| Financial funds as of 31.12. | 233.7 | 179.2 |
Cash fl ow from operating activities (infl ow) rose to € 206.9 million (previous year: € 193.2 million) in the reporting period, primarily due to the positive earnings trend.
The cash fl ow from investing activities (outfl ow) totalled € 56.3 million, which was below the previous year's fi gure of € 157.3 million, mainly as a result of non-cash effective assets additions out of fi nance lease, unsettled capital expenditure on the due date and postponed investment projects. The amount spent includes expenditure for investments in property, plant and equipment, investment property and intangible assets amounting to € 64.4 million (previous year: € 159.0 million) and other disbursements amounting to € 3.9 million (previous year: € 7.9 million), particularly for the acquisition of shares in consolidated companies and other business units as
well as for investments in non-current fi nancial assets. These sums were offset by cash infl ows of € 12.1 million (previous year: € 9.6 million) from the sale of intangible assets, property, plant and equipment, non-current assets held for sale and non-current fi nancial assets.
The free cash fl ow – the total cash fl ow from operating and investing activities – increased to € 150.7 million from its previous year's level of € 35.9 million.
Cash fl ow from fi nancing activities (outfl ow) came to € 95.2 million (previous year: € 88.6 million) in the reporting period and was dominated by dividend payments to shareholders and minority shareholders for the 2009 fi nancial year totalling € 61.3 million (previous year: € 115.3 million). Debt repayments came to € 31.3 million (previous year: € 34.3 million) and also contributed to this cash outfl ow.
With regard to its overall fi nancial position, the HHLA Group has suffi cient liquidity as of yearend 2010. Financial funds are made up of cash and cash equivalents (€ 235.5 million) offset by liabilities from short-term borrowing at HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH (€ 0.6 million) and current liabilities to shareholders outside the Group and banks (€ 1.2 million). The fi gure amounted to € 233.7 million as of 31 December 2010 and was therefore higher than at the beginning of the year (€ 179.2 million) for the reasons mentioned above.
Equity assets ratio
in %
as of 31.12. in € million/in %
No acquisitions or disposals of companies were carried out in the 2010 fi nancial year which had a material effect on the Group's fi nancial position.
Compared with the end of 2009, the HHLA Group's balance sheet total increased by a total of € 124.6 million to € 1,715.1 million as of 31 December 2010.
On the assets side, non-current assets came in at € 1,290.6 million (previous year: € 1,224.9 million). This development resulted primarily from investment in property, plant and equipment.
Current assets climbed to € 424.5 million (previous year: € 365.6 million). This upturn resulted largely from cash and cash equivalents increasing to € 235.5 million (previous year: € 173.5 million). Trade receivables also rose to € 126.5 million (previous year: € 121.7 million) due to the positive development of business in this year compared to the previous year. This higher fi gure was offset by a drop in income tax receivables to € 21.0 million (previous year: € 23.4 million) and a fall in receivables from related parties to € 2.7 million (previous year: € 6.7 million).
On the liabilities side, equity decreased by € 70.0 million to € 567.0 million (previous year: € 637.0 million) compared with year-end 2009. This was mainly due to the obligation to pay future fi nancial settlements of € 121.5 million to a minority shareholder – as described in the overall view of the fi nancial position – and the associated reduction in minority interests. The rise in retained earnings as a result of the increase in consolidated net income to € 113.9 million had a contrary effect. Overall, the equity ratio declined due to these effects by 6.9 percentage points to 33.1 % (previous year: 40.0 %).
Non-current liabilities increased to € 850.0 million as of the balance sheet date (previous year: € 710.6 million). This rise resulted principally from the growth in non-current fi nancial liabilities due to the recognition of the above-mentioned payment commitment to a minority shareholder, as well as leasing liabilities in connection with the mega-ship berths at CTB and CTT. Use of a lower discount factor to calculate the present value of pension obligations (4.5 %; previous year: 4.75 %) had a corresponding effect. The associated actuarial effects played a major role in the € 6.0 million rise in pension provisions to € 331.1 million (previous year: € 325.1 million).
Current liabilities climbed by € 55.3 million to € 298.2 million (previous year: € 242.9 million). The increase was largely brought about by a rise in other fi nancial liabilities to € 91.1 million (previous year: € 66.1 million) as a result of the current portion of the fi nancial settlement payable to the minority shareholder. Trade liabilities went up by € 22.4 million to € 77.0 million due to the higher
in € million
overall performance. Income tax liabilities rose accordingly to € 5.6 million from the previous year's fi gure of € 3.4 million.
The debt coeffi cient as a ratio of net fi nancial liabilities and pension provisions to Group equity (gearing ratio) was 1.1 (previous year: 0.8) as of the balance sheet date of 31 December 2010. The higher fi gure resulted partly from the recognition of the fi nancial settlement payable to a minority shareholder and the resulting reduction in minority interests. see also page 74 et seq., Overall view of the fi nancial position. The recognition of leasing liabilities within the scope of fi nance leases pertaining to the new quay walls for handling operations also contributed to the increase.
tion to be adopted by holders of a given class of shares, only the holders of that class of shares shall be entitled to vote.
The shares allocated preferentially within the scope of the initial public offering to employees of HHLA, and of companies in which HHLA directly or indirectly holds at least 50 % of the shares may not be sold until four years have expired, measured from the date on which the shares, were posted to the respective deposit accounts. To the Executive Board's knowledge, there are no further restrictions on voting rights or the transfer of shares, including those arising from agreements between shareholders.
As stated in the voting rights notifi cations issued as per Section 21 (1) of the German Securities Trading Act (WpHG) by the Free and Hanseatic City of Hamburg (FHH), HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH (HGV) and HHLA Beteiligungsgesellschaft mbH (HHLA-BG), dated 6 November 2007 and 4 January 2008, FHH held voting rights totalling 69.71 % (50,625,000 voting rights) via its subsidiary HGV and the latter's subsidiary HHLA-BG. The voting rights held by HGV and HHLA-BG, respectively, are attributed to FHH under Section 22 (1) sentence 1 (1) and Section 22 (1) sentence 1 (1) sentence 3 of the German Securities Trading Act (WpHG). The above-mentioned fi gures relate to the status prevailing on the date indicated in the respective voting rights notifi cation. There were no other notifi cations on voting rights involving any direct or indirect interest in the capital which entitle the holder to more than 10 % of the voting rights.
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 Section 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 Section 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 Section 11 (4) of the articles of association, the Supervisory Board is authorized to carry out amendments to the articles of association which relate only to the edition. 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 in case of steps taken in accordance with the German Reorganization 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 authorized under Section 3 (4) of the articles of association to increase the company's nominal capital until 1 September 2012 by up to € 33,742,924.00, by issuing up to 33,742,924 new registered Class A shares for subscription in cash and/or kind in one or more stages (authorized capital I). The statutory subscription right of the holders of Class S shares shall be excluded. The Executive Board was further authorized – with the approval of the Supervisory Board – to exclude the statutory subscription rights of holders of Class A shares,
7.1.1 if the capital increase is for subscription in cash and does not exceed 10 % of that proportion of the nominal capital attributable to Class A shares and the issue price of the new shares is not signifi cantly below the market price of shares already listed on the stock market at the time the Executive Board sets the issue price,
7.1.2 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 respective licences or other product rights,
7.1.3 as necessary for equalizing fractional amounts or
7.1.4 to offer employees in the company and its subsidiaries the opportunity to purchase the new shares (employee share plan).
7.2 Subject to the approval of the Supervisory Board, the Executive Board is additionally authorized under Section 3 (5) of the articles of association to increase the company's nominal capital until 1 September 2012 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 (authorized capital II). The statutory subscription right of the holders of Class A shares shall be excluded. The Executive Board was further authorized, with the approval of the Supervisory Board, to exclude the statutory subscription rights of holders of Class S shares as is necessary to equalize fractional amounts.
7.3 The company's nominal capital is increased contingently as per Section 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 2010 authorized the company until 15 December 2011 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 authorization may not be used for the purpose of trading in its own shares. The authorization 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 authorized, subject to the approval of the Supervisory Board, to use Class A shares purchased under the authorization 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 authorization 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 authorization 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. The authorization 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, the Executive Board is authorized 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 authorizations in 7.4.2 items 1 to 4.
7.4.4 The authorizations in 7.4.2 items 1 to 5 also cover the use of shares in the company acquired on the basis of Section 71 (d) sentence 5 of the German Stock Corporation Act.
7.4.5 The authorizations in 7.4.2 can be exercised on a one-off or repeated basis, in whole or in part, and separately or jointly. The authorizations in 7.4.2 items 1 to 4 can also be exercised by independent com panies 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 authorized 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 authorization 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 authorized, subject to the approval of the Supervisory Board, to exclude Class A shareholders' subscription rights to the debenture bonds in full or in part,
Additional information in accordance with Section 289 (4) and Section 315 (4) of the German Commercial Code (HGB) and explanatory notes Risk and opportunity report
options or obligations to convert them into shares accounting for no more than 10 % of nominal capital in total, either at the time this authorization takes effect or when it is exercised. The exclusion of subscription rights under other authorizations is to be taken into account in determining the extent to which the 10 % limit has been used, in accordance with Section 186 (3) sentence 4 AktG.
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
I at least 80 % of the average fi nal auction price for Class A company shares in Xetra trading (or a similar successor system) (i) on the ten trading days before the Executive Board adopts a resolution to issue the debenture bonds or (ii) on the fi ve trading days immediately before an offer to subscribe for the debenture bonds is publicly announced or (iii) on the fi ve trading days immediately before the company declares its acceptance following a public invitation to apply for subscription
I at least 80 % of the average fi nal auction price of the Class A company shares in Xetra trading (or a similar successor system) during the days on which the subscription rights to the debenture bonds are traded on the Frankfurt Stock Exchange, with the exception of the last two trading days for those rights.
7.6 Under Section 6 of the articles of associ ation and Section 237 (1) of the German Stock Corporation Act (AktG), the company is authorized 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 their employment contracts being terminated prematurely 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 % per annum. 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 of 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 take overs.
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 jeopardize the con tinued existence of the HHLA Group. An important element of the system is its compliance with the principles of promoting 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 manage such risks, the company has established a risk management system comprising the necessary organizational rules and procedures for identifying risks at an early stage, and taking proactive steps to deal with the risks and potential rewards inherent in all commercial activity. To this end, HHLA has created a methodical system covering all its business operations and based on risk policies established by the Executive Board. 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 Group Controlling, and establish clear lines of responsibility for the identifi cation, assessment, control, monitoring and reporting of risks.
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.
Risks are categorized 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 by management measures) and the net risk (including reduction by management measures). Risks are assessed in the context of the existing circumstances or a realistic projection. 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 recorded uniformly throughout the Group, staff liaise with the central Risk Management unit 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 must be 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 and risk reporting systems 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, contractual and voluntary obligations 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 processes, risks and controls. It therefore ensures 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 completeness, existence, 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
Review Report
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 recognizing 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 quickly and correctly adopted in fi nancial reporting. 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 have been documented and described along with
their respective lines of responsibility and reporting structures. A risk control matrix is used to document risks and controls. Processes, risks and controls are updated regularly.
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.
Signifi cant regulations and controls
Areas of responsibility related to accounting are clearly structured and assigned by HHLA. The Executive Board of HHLA bears overall responsibility for the internal accounting control and risk management system of the HHLA Group. 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 Financial Statements. There is also a clear demarcation between these departments and the respective segment accounting. Separating execution, settlement and authorization functions and giving these responsibilities to different members of staff reduces the risk of fraud. Multi-stage approval and authorization thresholds for ordering, payment transactions and accounting are employed across the Group. These include using the double-check 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. As with 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 Financial Statements, subsidiaries add more information to their separate fi nancial statements to form standardized report packages, which are then fed into the SAP EC-CS consolidation module for each individual company.
Measures are in place to protect the IT systems from unauthorized 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 authorizations are defi ned in a set of SAP authorization 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 Financial Statements are clearly defi ned. In add ition to a defi nition of the consolidated group, there are also detailed rules requiring affi liates to use a standardized 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 analyzes 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.
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.
The dredging of the Elbe's shipping channel to allow for a salt-water draught of 13.50 m throughout, and 14.50 m depending on the tides, is of considerable signifi cance. The German Federal Ministry of Transport and the Hamburg Ministry for Economic and Labour Affairs expect the work to start in late 2011, assuming the necessary planning permission has been granted by then. Radical improvements for tidal shipping should start to emerge around nine months after construction work has begun. It would therefore be feasible to complete the project by 2013.
For the Port of Hamburg, the deepening of the waterway 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. As a consequence, developments in freight traffi c might bypass the Port of Hamburg in the long run. These factors put a strain on HHLA's business development, and depending on the further course of proceedings and the reactions of shipping companies, could severely impact the Group's assets, fi nancial and earnings position.
As well as dredging the shipping channel, the regional road and rail infrastructure must be modernized and expanded if the Port of Hamburg wants to remain competitive and optimize 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 (A 252), establishing a high-speed rail link between Hannover and Hamburg/Bremen, 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. Leading economic researchers and institutes expect global economic growth in 2011 to be slightly weaker than in 2010, but to remain stable.
However, a number of different macroeconomic risks may jeopardize further economic developments. There is still risk potential associated with the fi nancial markets. The countries affected by the European debt crisis have now initiated measures to consolidate their budgets, and the countries' further refi nancing seems to have been safeguarded by bonds – some with high risk premiums – and rescue packages at EU level. Never-
theless, there are still risks inherent in banks' balance sheets. The subprime crisis showed what effects turmoil on the fi nancial markets can have on the real markets and therefore on world trade.
Experts believe that prices for commodities such as oil, copper and rare earths, which are sensitive to cyclical trends, will climb further in 2011 following the recent sharp rises. This could have a negative impact on the global economic recovery.
Protectionist moves by various countries to keep their currency artifi cially low by means of monetary policy, therefore boosting their own competitiveness, could lead to retaliatory trade sanctions from other countries, such as compensatory tariffs, which might hamper world trade.
China's central bank has increased its base rate twice since October in an attempt to rein in infl ation. The markets are therefore worried that further increases could slow China's economic growth and thus hamper world trade.
The euro zone and its export industries have recently benefi tted hugely from the low euro exchange rate. Should the euro start to recover, this could dampen economic developments.
For the reasons listed above, there is still a serious risk of the global economy suffering a setback. Consequently, there is also a risk that HHLA may not achieve its planned fi gures for container throughput, transport volumes or logistics services.
Terminal operators in the Hamburg-Antwerp range are gradually bringing the expansion of their handling capacities to a close. Due to the economic crisis, the supply of container throughput capacity still far outstrips demand. Drewry and Bremen's Institute of Shipping Economics and Logistics (ISL) anticipate an underutilization of capacities in Northern Europe over the coming years. A surplus of this kind will lead to even greater competition.
Similar to the Container segment, the Intermodal segment may experience restrained growth in demand for container transport. This may lead to an underutilization of traction systems and hinterland terminals. Generally, underutilization entails the risk that it might not be possible to compensate fully for negative divergences in earnings because of insuffi cient fl exibility on the cost side. HHLA counters this risk by diversifying its customer base and concluding medium-term contracts of varying duration. 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 Intermodal companies are exposed to noticeably more intense competition from competing rail operators as well as from trucks and feeder ships as carriers. The market entry of new competitors with aggressive pricing policies, particularly in Eastern Europe, poses the risk that market share will shift to the detriment of rail operators in which HHLA has interests.
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. For some years now, the industry has been undergoing a process of consolidation. Mergers and alliances among terminal operators, as well as between terminal operators and shipping companies, may result in a change in the volume and pricing structure currently in place between handlers.
In order to confront these market risks, HHLA takes specifi c steps to reinforce customer loyalty and develop unique selling points in all its segments. The Group also makes use of its fl exibility in cost and capacity management. HHLA's strategy is to adapt its investments in the expansion of container terminals as fl exibly as possible to foreseeable demand. Throughput and transport volumes in the affected markets are monitored together with the throughput volumes and service structure of each client, so that any negative developments can be recognized at an early stage. The network is also used to anticipate developments of relevance to the competitive situation.
A limited number of companies supply equipment and systems for container handling. This could lead to bottlenecks in the procurement of replacement parts and changes to purchasing agreements as a result of the low number of market participants. HHLA monitors the market in order to fi nd procurement alternatives 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 procurement markets are also carefully monitored and taken into account when awarding contracts, particularly when it comes to handling equipment. HHLA also continually tracks its suppliers' credit ratings by means of a monitoring system.
The HHLA companies operating in the Inter modal segment purchase signifi cant traction, carriage and network services from the respective public rail operators. This leads to a certain amount of dependence on one, or a small number of, service providers. In order to minimize this dependence, the Intermodal companies maintain regular contact with the public rail operators, some of which are HHLA shareholders. The Intermodal companies take specifi c precautionary steps to reinforce customer loyalty and develop unique selling points. All rail operators are constantly exposed to the risk of the public rail operators charging excessive usage fees.
The failure of central technical equipment can restrict the ability of equipment-based companies to provide services. Depending on the duration of the downtime, unavailable equipment can lead to decreased revenue and 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.
Liquidity risks in fi nancial management are limited by, among other things, HHLA's centralized 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 authorize 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 2010, the relevant total borrowings came to € 81 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 fi nancial sector is currently being 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 minimal, as the HHLA Group only conducts derivative fi nancial transactions with counterparties boasting very good credit ratings. see also the Notes, Note 46.
The bulk of HHLA's services are rendered within the euro zone, meaning that the majority of its invoices are issued in euros. Even the Group's Eastern European affi liates invoice mainly in euros, or based on euros or US dollars. Currency or transfer risks therefore result primarily from exchange rate fl uctuations affecting Eastern European currencies.
In order to reduce the risks associated with exchange rate fl uctuations, the affi liates strive to use the relevant functional currency for invoicing, loans and payments. Should currencies fl uctuate, this minimizes the overall impact of individual contrary effects. All HHLA companies that operate with foreign currencies reduce the risk of exchange rate fl uctuations by monitoring rates regularly and, where necessary, transferring free liquidity in local currency to accounts with hard currency. The holding company also constantly tracks those currencies of relevance to the Group. If there are indications that currencies will fl uctuate, suitable countermeasures are promptly discussed with the units affected.
Growth rates in the global container transport industry have reduced the probability of client bankruptcies compared with the previous year. Nevertheless, some degree of risk remains due to lower freight rates and new ship orders.
In addition to the loss of any outstanding accounts receivable, the insolvency of one of HHLA's shipping clients could lead to freight volumes being taken on by shipping companies which are not clients of HHLA. 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 minimize default risks.
Economic developments at certain affi liates remain diffi cult. This 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 aimed at opening up the market for port services and establishing a valid EU-wide legal framework for their rendering. As part of a public consultation process in 2010, the European Commission launched an investigation into the need for an initiative to adjust the valid legal framework for licences and the effects of such an initiative. Although the consultation process essentially covered all licences, it focussed specifi cally on port operations.
Effective as of 1 July 2010, the sulphur limits for ocean-going vessels in the North Sea and the Baltic Sea were reduced from 1.5 % to 1.0 %. The limit is to be lowered further, to 0.1 %, from 2015. As of 2012, the international limit will be cut from its current 4.5 % to 3.5 %, with a further reduction to 0.5 % starting in 2020. As the stricter limits in the North Sea and the Baltic Sea 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, a shortage of staff with the necessary qualifi cations and training, and fl uctuation among key personnel. In order to minimize such risks, staff selection, recruitment and development are carried out centrally by HHLA Holding in coordination with the subsidiaries and associated companies using standardized processes and procedures. Furthermore, expertise is systematically shared among staff and substitution procedures have been put in place. Staff appraisals are also conducted on a regular basis to retain employees on a long-term basis. A standardized procedure is
used to assess managers and help them to develop. This procedure allows HHLA to recognize potential and safeguard succession plans.
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. 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 organizational 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 authorization 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.
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 minimize 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 little 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.
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 has been a slight increase in residual risks after taking countermeasures into account. This is due to the higher volumes being handled.
The risks identifi ed do not threaten the existence of the Group, either individually or as a whole. As far as the future is concerned, there are also no discernible risks at present which could jeopardize the continued existence of the company.
Thanks to its favourable geographical location, the Port of Hamburg is the leading international hub for seaborne and overland container transport close to the German North Sea coast. It also enjoys excellent hinterland links to the growing economies of Central and Eastern Europe and the Baltic states. If the planned enhancement of the river Elbe shipping channel is completed quickly, this will enable HHLA to maintain and extend its competitive position. The Intermodal segment will 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 in the future. In addition to the above, HHLA continually assesses the extent to which strategically advantageous acquisition or investment possibilities are available.
Provided that there are no protectionist tendencies hampering world trade, the international division of labour in the production of consumer and capital goods will also continue in future. The Port of Hamburg's integration into the global exchange of goods gives HHLA the chance to benefi t immediately 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 stabilization of fi nancial markets and the expected further growth of the global economy.
The HHLA Group took out a long-term bank loan for € 60 million in January 2011, to fi nance its expansion projects in the Container segment. Apart from this, there were no other signifi cant events after the balance sheet date.
According to predictions of leading research institutes, global economic growth will continue in 2011. However, the pace of growth can be expected to slow as the year progresses. The fi gures for the 2010 reporting year form a more challenging comparative basis due to the strong economic recovery seen in past months. In addition to this, the expiry of economic stimulus programmes and the fading effects of the inventory cycle in particular are likely to have a dampening effect, as are more restrictive monetary policies and the consolidation of government budgets. Applying the International Monetary Fund's (IMF) estimates to this base case scenario gives rise to projected global economic growth of 4 to 5 %. For the world trade the IMF expects growth of around 7 %.
Divergent growth rates are still anticipated in the economic regions of prime importance for business developments at HHLA. The IMF forecasts strong economic growth of over 8 % for Asia and an increase of as much as 10 % in China's gross domestic product (GDP). More moderate expansion of 3 to 4 % is predicted for the Central and Eastern European economies. Russia should be able to grow slightly stronger, by a good 4 %. Restrained economic growth of 1 to 2 % is forecasted for the industrialized countries in the euro zone, while Germany's GDP looks set to rise by over 2 %.
Following the international fi nancial and economic crisis, the macroeconomic environment should still be considered unstable. For this reason, forecasts remain highly uncertain. Actual industry and business developments may thus follow a considerably worse or considerably better economic trend than the base case described below.
The prime risks for this scenario arise from the economic repercussions of necessary public spending cutbacks, liquidity-driven infl ation tendencies and the fragile trust in the ability to refi nance massive levels of public indebtedness. Should the recent unrest in North Africa and the Middle East spread, this could also have a palpable impact on economic developments by disrupting the oil supply.
By contrast, opportunities are presented above all by an increasingly self-supporting, ongoing upturn which – when combined with stabilization on the fi nancial markets and a reduction in the pressure on government budgets – could prompt increasingly strong economic growth.
Based on the developments described above, market research institutes, such as Drewry Shipping Consultants or Clarkson, anticipate growth of between 7 and 10 % in worldwide container throughput for 2011. While an above-average growth rate is predicted for container traffi c within Asia, the forecasts for Northern Euro pean ports suggest more moderate growth of 5 to 6 %. Intense competition in handling and transport services is expected to dominate the market environment once again in 2011. Container shipping companies are likely to face higher fuel costs and renewed pressure on earnings due to surplus transport capacity. Despite the ongoing recovery in volumes, surplus handling capacity is still to be expected in Northern Europe.
In light of developments at the seaports, a moderate upturn in freight volume is also anticipated for European land-based pre-carriage and oncarriage systems. The Association of German Freight Forwarders and Logistics Operators (Deutscher Speditions- und Logistikverband) forecasts a total growth rate of 4 % for transport volumes and services, including transit traffi c, in 2011. Developments on the routes served by the companies in HHLA's Intermodal segment are likely to vary, depending on the core region they provide links to. According to surveys, transport prices are expected to rise across the board in 2011 for both rail and road-based goods traffi c, although the tough price-based competition on a number of routes seems set to continue.
Experts anticipate average growth of 5 to 6 % for logistics services in Germany over the next three years. However, the market environment for the HHLA companies in the Logistics segment is likely to continue to develop differently for each market segment. For example, the German Steel Federation expects steel production in Germany to grow by a further 2 % in 2011, despite the high level already reached – a development which
1 Since the time the audit certifi cate for the Group Management Report was issued, Japan has suffered a severe earthquake. Supplementary information on this incident is provided below. This information was not included in the audit of the report and is not therefore part of the audited Group Management Report. Container traffi c with Japan accounts for less than 5 % of HHLA's total seaborne throughput. Although the main Japanese ports of importance for international container traffi c are still functional, delays and problems in the transport chain are currently expected due primarily to the temporary closure of local production lines. It is currently impossible to assess the local impact and the potential further consequences with suffi cient certainty.
| Gross domestic product | 2011 |
|---|---|
| Global economy | 4–5 % |
| Germany | 2–3 % |
| Asia | 8–9 % |
| Eastern Europe | 3–4 % |
| Global trade | 7 % |
|---|---|
| Container throughput, worldwide | 7–10 % |
| Container throughput, Northern Europe | 5–6 % |
| Transport volume, Germany | 4% |
Source: IMF, Drewry, Clarkson, Association of German Freight Forwarders and Logistics Operators ( Deutscher Speditions- und Logistikverband)
I Revenue growth in the region of 10 % (revenue in 2010: € 1,073 million) I EBIT margin improvement against previous year (2010: 18.0 %)
I Capital expenditure in a range of € 180–220 million
| Port Logistics | Real Estate |
|---|---|
| I In the region of 10 % (revenue in 2010: € 1,044 million) at continuing pricing pressure due to surplus capacity in the market |
I Comparable to the previous year (revenue in 2010: € 34 million) |
| I Year-on-year increase (2010: 17.2 %) despite the cost-side impact of ceased short-time working, catch-up effects in maintenance work and additional depreciation |
I Comparable to the previous year (2010: 37.4 %) |
| Container | Intermodal | Logistics | Real Estate |
|---|---|---|---|
| Container throughput: | Container transport: | I Heterogeneous but | The Real Estate segment |
| I In the region of 10 % | I In the region of 10 % | overall positive develop | is equivalent with the |
| (2010: | (2010: | ment in specialized | Real Estate subgroup |
| 5,844 thousand TEU) | 1,696 thousand TEU) | market segments | (see section above). |
| I ≤ 10 % | I ≥ 10 % | I ≤ 8 % | |
| (2010: € 605 million) | (2010: € 317 million) | (2010: € 120 million) | |
| I Year-on-year increase | I Year-on-year increase | I Year-on-year increase | |
| (2010: 25.7 %) | (2010: 7.8 %) | (2010: 5.1 %) | |
| Positive case scenario | Negative case scenario | |
|---|---|---|
| Conditions | I Ongoing strong economic recovery I Considerably improved capacity utilization I Decreasing price competition I Beginning of the planned deepening of the Elbe waterway |
I Recession sets in again I Deterioration in capacity utilization I Increased price competition |
Group performance
I Revenue growth of over 10 % I EBIT margin distinctly above previous year
will impact accordingly on iron ore and coal bulk cargo handling. The German Association of the Automotive Industry, however, anticipates growth of 5 % in car exports.
HHLA expects revenue to increase in the region of 10 % at Group level in 2011. On the EBIT margin the company is striving to achieve a year-onyear improvement.
Developments will be again largely determined by the listed subgroup Port Logistics. In 2011, HHLA expects to experience strong growth in both handling and transport services, primarily as the 2010 recovery in volumes took effect later at the Port of Hamburg than at rival ports. Based on the expectation that the increase in freight volume achieved partly by means of sales drives in the second half of 2010 will continue throughout the full year in 2011, the company should achieve higher growth rates than the overall market compared with the previous year. Furthermore, the Eastern European markets important for Baltic and hinterland traffi c offer additional growth potential for HHLA, as these markets are expected to face more dynamic economic growth than the Western industrialized nations in 2011. Against this background, HHLA anticipates growth in the region of 10 % in both handling and transport services. However, the increase in volumes will still take place in a highly competitive environment. The Group is striving to largely maintain its earnings quality despite limited leeway. As a result, revenue growth should roughly match the increase in volume.
On the cost side major impact is expected to stem from ceased short-time working, catchup effects in maintenance work and recognizing additional depreciation. Despite this rise in costs, HHLA expects to increase its EBIT margin, assuming capacity utilization at its facilities improves. The effective tax rate for 2011 is expected to be in the region of 30 % again due to the absence of non-recurring tax effects. With regard to minority interests, their pro rata share of profi t after taxes is expected to fall, leaving a greater proportion for the shareholders of the parent company.
HHLA will continue to make important investments in 2011 to secure its long-term prospects. As well as investing in continued modernization work at the container terminals – including a large-scale project to expand handling operations in Odessa on the Black Sea – the company will focus on ramping up hinterland traffi c to further strengthen its vertical integration along the transport chain. Overall, the HHLA Group plans capital expenditure in the range of € 180 million to € 220 million.
At the Port Logistics subgroup level, volume growth in the region of 10 % is anticipated in the Container segment. However, pressure on prices seems to remain high, meaning that achieving revenue growth in line with volumes is a set but ambitious target. Furthermore, the impact of the costs described above will be felt in the Container segment in particular. All in all, HHLA is nevertheless aiming for an improvement in its operating margin in conjunction with greater capacity utilization at its facilities.
In the Intermodal segment, the demand for container transport in 2011 is likely to develop more or less in line with the trend in throughput volumes at the Container segment. Revenue should be able to grow at a similar rate to transport volumes, and a number of routes have potential for improved earnings quality. Corresponding to the capital expenditure on inland terminals and the realignment of Transfracht's transport services, the company expects the segment's added value – and therefore also its EBIT margin – to grow.
For the Logistics segment, HHLA is expecting growth in revenue and an improved overall operating result, with developments in specifi c market segments remaining varied. An increase in earnings is primarily anticipated in the fi eld of bulk goods handling and RoRo activities within vehicle logistics. The company also intends to bring about an improvement in contract logistics. In the Real Estate subgroup the company still expects to see stable business developments despite the increasingly challenging environment. HHLA will continue to pursue the value-oriented development of its properties in 2011. Revenue is anticipated to be roughly on a par with the previous year. The Group may incur higher costs than in the previous year as a result of the portfolio development activities in 2011. Overall, HHLA is aiming to match the previous year's EBIT margin in this subgroup, however.
HHLA will continue to add more specifi c details to its outlook above and beyond the statements made in this report as soon as future business developments can be estimated more precisely.
It is likely that continued investments will lead to an increase in the Group's balance sheet total. 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 development of equity will mainly be determined by the achievable net profi t for the year as well as the changes in actuarial effects arising from the calculation of the present value of pension provisions based on the applicable discount rate. Financial liabilities for the fi nancing of investment projects are also expected to increase.
Other than this, the intended means of fi nancing the further development of business are, primarily, the liquidity reserves available to the Group, 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 a 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 page 60 et seq., Corporate strategy. 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. As the lead times for constructing and commissioning capital-intensive handling facilities span several years, the Group does not expect additional competitors to enter the market in Hamburg or Odessa during the forecast period. Other than ongoing further development, HHLA does not plan to make any far-reaching alterations or changes to its existing service portfolio.
If an attractive acquisition opportunity should occur which meets HHLA's strategic and fi nancial requirements, this may allow HHLA to expand its core business within existing segments. Apart from that, no changes in the organization of business are currently planned.
It is of crucial importance for HHLA's perspectives in 2012 and beyond that the Elbe waterway is dredged promptly. Assuming this enables the company to tap growth opportunities in full, HHLA is confi dent that it will be able to expand its market position and benefi t disproportionately from increases in European cargo volumes. If the economic recovery continues into the new year and price discipline in container shipping continues, it should be possible to generate revenue exceeding € 1.2 billion in 2012. Although pressure on yields is expected to persist in the foreseeable future, HHLA will strive to generate further earnings improvements even in this environment. The investment project to expand HHLA's activities on the Black Sea will mean that capital expenditure in 2012 is unlikely to be below the previous year's total.
| 2012 | |
|---|---|
| Global economy | 4 – 5 % |
| Germany | 2 % |
| Asia | 8 – 9 % |
| Eastern Europe | 4 % |
| World trade | 6 – 7 % |
Source: IMF
Against the background of its broad strategic position, the increasing concentration of freight volumes on large international hubs and the continuing integration of emerging economies into the international division of labour, HHLA anticipates positive medium-term business prospects. Should economic growth continue to stabilize as predicted by the IMF, HHLA will strive to further increase its revenue and earnings in subsequent years. With this aim, it intends to carry on its investment programme in line with the development of demand.
In order to maintain stable balance sheet relationships, HHLA intends to continue with its conservative fi nancing policy. Accordingly, it is still planning to cover investments and dividend payments as far as possible out of current cash fl ow and liquidity reserves. Additionally, HHLA attaches a great deal of importance to the preservation of its good corporate credit standing.
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 instigating the said actions.
In accordance with Section 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.
Hamburg, 4 March 2011
Hamburger Hafen und Logistik AG The Executive Board
Klaus-Dieter Peters Dr. Stefan Behn
Heinz Brandt Dr. Sebastian Jürgens
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 materialize, 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 | 2010 | 2009 |
|---|---|---|---|
| Revenue | 8. | 1,073,122 | 990,743 |
| Changes in inventories | 9. | - 1,149 | 360 |
| Own work capitalized | 10. | 7,359 | 8,278 |
| Other operating income | 11. | 37,752 | 29,238 |
| Cost of materials | 12. | - 372,367 | - 322,129 |
| Personnel expenses | 13. | - 316,783 | - 308,725 |
| Other operating expenses | 14. | - 121,046 | - 120,216 |
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | 306,888 | 277,549 | |
| Depreciation and amortization | 15. | - 113,980 | - 117,301 |
| Earnings before interest and taxes (EBIT) | 192,908 | 160,248 | |
| Earnings from associates accounted for using the equity method | 16. | 208 | 164 |
| Interest income | 16. | 5,015 | 5,644 |
| Interest expenses | 16. | - 39,949 | - 39,933 |
| Other fi nancial result | 16. | 336 | - 119 |
| Financial result | 16. | - 34,390 | - 34,244 |
| Earnings before tax (EBT) | 158,518 | 126,004 | |
| Income tax | 18. | - 44,588 | - 36,868 |
| Profi t after tax | 113,930 | 89,136 | |
| of which attributable to minority interests | 19. | 37,703 | 36,090 |
| of which attributable to shareholders of the parent company | 76,227 | 53,046 |
| in € thousand | Note | 2010 | 2009 |
|---|---|---|---|
| Profi t after tax | 113,930 | 89,136 | |
| Actuarial gains/losses | 36. | - 6,493 | - 23,640 |
| Cash fl ow hedges | 47. | - 220 | - 800 |
| Translation differences | 3,838 | - 3,065 | |
| Deferred taxes on changes recognized directly in equity | 18. | 2,140 | 7,766 |
| Other | 18 | 85 | |
| Income and expense recognized directly in equity | - 717 | - 19,654 | |
| Total comprehensive income | 113,213 | 69,482 | |
| of which attributable to minority interests | 37,898 | 35,903 | |
| of which attributable to shareholders of the parent company | 75,315 | 33,579 |
Consolidated Financial Statements Income statement HHLA subgroups Statement of comprehensive income HHLA subgroups 108
| in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes |
2010 Group |
2010 Port Logistics |
2010 Real Estate |
2010 Consolidation |
|---|---|---|---|---|
| Revenue | 1,073,122 | 1,044,118 | 33,960 | - 4,956 |
| Changes in inventories | - 1,149 | - 1,124 | - 25 | 0 |
| Own work capitalized | 7,359 | 7,350 | 0 | 9 |
| Other operating income | 37,752 | 37,633 | 884 | - 765 |
| Cost of materials | - 372,367 | - 366,647 | - 5,826 | 106 |
| Personnel expenses | - 316,783 | - 314,740 | - 2,043 | 0 |
| Other operating expenses | - 121,046 | - 116,509 | - 10,143 | 5,606 |
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | 306,888 | 290,081 | 16,807 | 0 |
| Depreciation and amortization | - 113,980 | - 110,170 | - 4,117 | 307 |
| Earnings before interest and taxes (EBIT) | 192,908 | 179,911 | 12,690 | 307 |
| Earnings from associates accounted for using the equity method | 208 | 208 | 0 | 0 |
| Interest income | 5,015 | 4,919 | 230 | - 134 |
| Interest expenses | - 39,949 | - 35,013 | - 5,070 | 134 |
| Other fi nancial result | 336 | 336 | 0 | 0 |
| Financial result | - 34,390 | - 29,550 | - 4,840 | 0 |
| Earnings before tax (EBT) | 158,518 | 150,361 | 7,850 | 307 |
| Income tax | - 44,588 | - 42,768 | - 3,028 | 1,208 |
| Profi t after tax | 113,930 | 107,593 | 4,822 | 1,515 |
| of which attributable to minority interests | 37,703 | 37,703 | 0 | 0 |
| of which attributable to shareholders of the parent company | 76,227 | 69,890 | 4,822 | 1,515 |
| in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes |
2010 Group |
2010 Port Logistics |
2010 Real Estate |
2010 Consolidation |
|---|---|---|---|---|
| Profi t after tax | 113,930 | 107,593 | 4,822 | 1,515 |
| Actuarial gains/losses | - 6,493 | - 6,358 | - 135 | |
| Cash fl ow hedges | - 220 | - 220 | 0 | |
| Translation differences | 3,838 | 3,838 | 0 | |
| Deferred taxes on changes recognized directly in equity | 2,140 | 2,096 | 44 | |
| Other | 18 | 18 | 0 | |
| Income and expense recognized directly in equity | - 717 | - 626 | - 91 | 0 |
| Total comprehensive income | 113,213 | 106,967 | 4,731 | 1,515 |
| of which attributable to minority interests | 37,898 | 37,898 | 0 | |
| of which attributable to shareholders of the parent company | 75,315 | 69,069 | 6,246 |
| in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes |
2009 Group |
2009 Port Logistics |
2009 Real Estate |
2009 Consolidation |
|---|---|---|---|---|
| Revenue | 990,743 | 962,865 | 32,718 | - 4,839 |
| Changes in inventories | 360 | 338 | 23 | 0 |
| Own work capitalized | 8,278 | 8,231 | 0 | 47 |
| Other operating income | 29,238 | 28,870 | 1,143 | - 775 |
| Cost of materials | - 322,129 | - 317,000 | - 5,247 | 118 |
| Personnel expenses | - 308,725 | - 306,309 | - 2,416 | 0 |
| Other operating expenses | - 120,216 | - 115,885 | - 9,781 | 5,449 |
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | 277,549 | 261,110 | 16,440 | 0 |
| Depreciation and amortization | - 117,301 | - 113,460 | - 4,138 | 296 |
| Earnings before interest and taxes (EBIT) | 160,248 | 147,650 | 12,302 | 296 |
| Earnings from associates accounted for using the equity method | 164 | 164 | 0 | 0 |
| Interest income | 5,644 | 5,605 | 184 | - 145 |
| Interest expenses | - 39,933 | - 34,671 | - 5,407 | 145 |
| Other fi nancial result | - 119 | - 119 | 0 | 0 |
| Financial result | - 34,244 | - 29,021 | - 5,223 | 0 |
| Earnings before tax (EBT) | 126,004 | 118,629 | 7,079 | 296 |
| Income tax | - 36,868 | - 35,834 | - 988 | - 46 |
| Profi t after tax | 89,136 | 82,795 | 6,091 | 250 |
| of which attributable to minority interests | 36,090 | 36,090 | 0 | 0 |
| of which attributable to shareholders of the parent company | 53,046 | 46,705 | 6,091 | 250 |
| in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes |
2009 Group |
2009 Port Logistics |
2009 Real Estate |
2009 Consolidation |
|---|---|---|---|---|
| Profi t after tax | 89,136 | 82,795 | 6,091 | 250 |
| Actuarial gains/losses | - 23,640 | - 23,321 | - 319 | |
| Cash fl ow hedges | - 800 | - 800 | 0 | |
| Translation differences | - 3,065 | - 3,065 | 0 | |
| Deferred taxes on changes recognized directly in equity | 7,766 | 7,663 | 103 | |
| Other | 85 | 85 | 0 | |
| Income and expense recognized directly in equity | - 19,654 | - 19,438 | - 216 | 0 |
| Total comprehensive income | 69,482 | 63,357 | 5,875 | 250 |
| of which attributable to minority interests | 35,903 | 35,903 | 0 | |
| of which attributable to shareholders of the parent company | 33,579 | 27,454 | 6,125 |
| in € thousand | |||
|---|---|---|---|
| Assets | Note | 31.12.2010 | 31.12.2009 |
| Non-current assets | |||
| Intangible assets | 22. | 83,850 | 82,334 |
| Property, plant and equipment | 23. | 978,583 | 916,772 |
| Investment property | 24. | 185,568 | 186,471 |
| Associates accounted for using the equity method | 25. | 1,620 | 1,487 |
| Financial assets | 26. | 8,284 | 8,062 |
| Deferred taxes | 18. | 32,766 | 29,812 |
| 1,290,671 | 1,224,938 | ||
| Current assets | |||
| Inventories | 27. | 20,965 | 20,379 |
| Trade receivables | 28. | 126,516 | 121,731 |
| Receivables from related parties | 29. | 2,704 | 6,660 |
| Other fi nancial receivables | 30. | 2,607 | 2,356 |
| Other assets | 31. | 15,209 | 12,292 |
| Income tax receivables | 32. | 20,972 | 23,412 |
| Cash and cash equivalents | 33. | 235,493 | 173,531 |
| Non-current assets held for sale | 34. | 0 | 5,200 |
| 424,466 | 365,561 | ||
| 1,715,137 | 1,590,499 | ||
| Equity and liabilities | |||
| Equity | |||
| Subscribed capital | 72,680 | 72,680 | |
| Subgroup Port Logistics | 69,975 | 69,975 | |
| Subgroup Real Estate | 2,705 | 2,705 | |
| Capital reserve | 139,728 | 139,728 | |
| Subgroup Port Logistics | 139,222 | 139,222 | |
| Subgroup Real Estate | 506 | 506 | |
| Retained earnings | 337,337 | 291,805 | |
| Subgroup Port Logistics | 322,200 | 280,300 | |
| Subgroup Real Estate | 15,137 | 11,505 | |
| Other comprehensive income | 29,514 | 30,547 | |
| Subgroup Port Logistics | 28,412 | 29,354 | |
| Subgroup Real Estate | 1,102 | 1,193 | |
| Minority interests in equity | - 12,257 | 102,225 | |
| Subgroup Port Logistics | - 12,257 | 102,225 | |
| Subgroup Real Estate | 0 | 0 | |
| 35. | 567,002 | 636,985 | |
| Non-current liabilities | |||
| Pension provisions | 36. | 331,134 | 325,141 |
| Other non-current provisions | 37. | 52,565 | 56,092 |
| Non-current liabilities to related parties | 40. | 65,747 | 0 |
| Non-current fi nancial liabilities | 38. | 387,612 | 316,363 |
| Deferred taxes | 18. | 12,897 | 13,029 |
| 849,955 | 710,625 | ||
| Current liabilities | |||
| Other current provisions | 37. | 21,896 | 18,854 |
| Trade liabilities | 39. | 77,026 | 54,616 |
| Current liabilities to related parties | 40. | 67,986 | 66,329 |
| Current fi nancial liabilities | 38. | 91,136 | 66,077 |
| Other liabilities | 41. | 34,577 | 33,596 |
| Income tax liabilities | 42. | 5,559 | 3,417 |
| 298,180 | 242,889 | ||
| 1,715,137 | 1,590,499 |
in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes
| Assets | 31.12.2010 Group |
31.12.2010 Port Logistics |
31.12.2010 Real Estate |
31.12.2010 Consolidation |
|---|---|---|---|---|
| Non-current assets | ||||
| Intangible assets | 83,850 | 83,831 | 19 | 0 |
| Property, plant and equipment | 978,583 | 955,772 | 5,464 | 17,347 |
| Investment property | 185,568 | 66,715 | 150,276 | - 31,423 |
| Associates accounted for using the equity method | 1,620 | 1,620 | 0 | 0 |
| Financial assets | 8,284 | 7,082 | 1,202 | 0 |
| Deferred taxes | 32,766 | 36,439 | 25 | - 3,698 |
| 1,290,671 | 1,151,459 | 156,986 | - 17,774 | |
| Current assets | ||||
| Inventories | 20,965 | 20,906 | 59 | 0 |
| Trade receivables | 126,516 | 125,831 | 685 | 0 |
| Receivables from related parties | 2,704 | 11,951 | 39 | - 9,286 |
| Other fi nancial receivables | 2,607 | 2,535 | 72 | 0 |
| Other assets | 15,209 | 15,062 | 147 | 0 |
| Income tax receivables | 20,972 | 24,053 | 240 | - 3,321 |
| Cash and cash equivalents | 235,493 | 235,220 | 273 | 0 |
| 424,466 | 435,558 | 1,515 | - 12,607 | |
| 1,715,137 | 1,587,017 | 158,501 | - 30,381 | |
| Equity and liabilities | ||||
| Equity | ||||
| Subscribed capital | 72,680 | 69,975 | 2,705 | 0 |
| Capital reserve | 139,728 | 139,222 | 506 | 0 |
| Retained earnings | 337,337 | 322,200 | 25,728 | - 10,591 |
| Other comprehensive income | 29,514 | 28,412 | 1,102 | 0 |
| Minority interests in equity | - 12,257 | - 12,257 | 0 | 0 |
|---|---|---|---|---|
| 567,002 | 547,552 | 30,041 | - 10,591 | |
| Non-current liabilities | ||||
| Pension provisions | 331,134 | 325,386 | 5,748 | 0 |
| Other non-current provisions | 52,565 | 51,143 | 1,422 | 0 |
| Non-current liabilities to related parties | 65,747 | 65,747 | 0 | 0 |
| Non-current fi nancial liabilities | 387,612 | 362,657 | 24,955 | 0 |
| Deferred taxes | 12,897 | 13,431 | 6,649 | - 7,183 |
| 849,955 | 818,364 | 38,774 | - 7,183 | |
| Current liabilities | ||||
| Other current provisions | 21,896 | 19,984 | 1,912 | 0 |
| Trade liabilities | 77,026 | 73,748 | 3,278 | 0 |
| Current liabilities to related parties | 67,986 | 2,001 | 75,271 | - 9,286 |
| Current fi nancial liabilities | 91,136 | 86,979 | 4,157 | 0 |
| Other liabilities | 34,577 | 34,252 | 325 | 0 |
| Income tax liabilities | 5,559 | 4,137 | 4,743 | - 3,321 |
| 298,180 | 221,101 | 89,686 | - 12,607 | |
| 1,715,137 | 1,587,017 | 158,501 | - 30,381 |
in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes
| Assets | 31.12.2009 Group |
31.12.2009 Port Logistics |
31.12.2009 Real Estate |
31.12.2009 Consolidation |
|---|---|---|---|---|
| Non-current assets | ||||
| Intangible assets | 82,334 | 82,305 | 30 | 0 |
| Property, plant and equipment | 916,772 | 893,700 | 5,284 | 17,787 |
| Investment property | 186,471 | 71,032 | 147,609 | - 32,169 |
| Associates accounted for using the equity method | 1,487 | 1,487 | 0 | 0 |
| Financial assets | 8,062 | 6,780 | 1,282 | 0 |
| Deferred taxes | 29,812 | 33,890 | 152 | - 4,230 |
| 1,224,938 | 1,089,194 | 154,357 | - 18,612 | |
| Current assets | ||||
| Inventories | 20,379 | 20,298 | 81 | 0 |
| Trade receivables | 121,731 | 120,878 | 853 | 0 |
| Receivables from related parties | 6,660 | 16,867 | 902 | - 11,109 |
| Other fi nancial receivables | 2,356 | 2,333 | 23 | 0 |
| Other assets | 12,292 | 12,181 | 110 | 0 |
| Income tax receivables | 23,412 | 25,581 | 0 | - 2,169 |
| Cash and cash equivalents | 173,531 | 173,313 | 218 | 0 |
| Non-current assets held for sale | 5,200 | 5,200 | 0 | 0 |
| 365,561 | 376,651 | 2,187 | - 13,278 | |
| 1,590,499 | 1,465,845 | 156,544 | - 31,890 |
| Equity and liabilities | ||||
|---|---|---|---|---|
| Equity | ||||
| Subscribed capital | 72,680 | 69,975 | 2,705 | 0 |
| Capital reserve | 139,728 | 139,222 | 506 | 0 |
| Retained earnings | 291,805 | 280,300 | 23,610 | - 12,105 |
| Other comprehensive income | 30,547 | 29,354 | 1,193 | 0 |
| Minority interests in equity | 102,225 | 102,225 | 0 | 0 |
| 636,985 | 621,076 | 28,014 | - 12,105 | |
| Non-current liabilities | ||||
| Pension provisions | 325,141 | 319,512 | 5,629 | 0 |
| Other non-current provisions | 56,092 | 54,663 | 1,429 | 0 |
| Non-current fi nancial liabilities | 316,363 | 288,861 | 27,502 | 0 |
| Deferred taxes | 13,029 | 13,228 | 6,308 | - 6,507 |
| 710,625 | 676,264 | 40,868 | - 6,507 | |
| Current liabilities | ||||
| Other current provisions | 18,854 | 17,768 | 1,086 | 0 |
| Trade liabilities | 54,616 | 52,733 | 1,883 | 0 |
| Current liabilities to related parties | 66,329 | 1,723 | 75,715 | - 11,109 |
| Current fi nancial liabilities | 66,077 | 61,203 | 4,874 | 0 |
| Other liabilities | 33,596 | 33,273 | 323 | 0 |
| Income tax liabilities | 3,417 | 1,805 | 3,781 | - 2,169 |
| 242,889 | 168,505 | 87,662 | - 13,278 | |
| 1,590,499 | 1,465,845 | 156,544 | - 31,890 |
| in € thousand | Note | 2010 | 2009 |
|---|---|---|---|
| 1. Cash fl ow from operating activities | |||
| Earnings before interest and taxes (EBIT) | 192,908 | 160,248 | |
| Depreciation, amortization, impairment and reversals on non-fi nancial non-current assets |
11./15. | 110,961 | 117,017 |
| Decrease in provisions | - 28,538 | - 12,160 | |
| Gains/losses arising from the disposal of non-current assets | - 82 | - 1,037 | |
| Change in inventories, trade receivables and other assets not attributable to investing or fi nancing activities |
- 7,572 | 29,708 | |
| Decrease in trade payables and other liabilities not attributable to investing or fi nancing activities |
- 4,718 | - 17,865 | |
| Interest received | 5,147 | 5,112 | |
| Interest paid | - 20,904 | - 20,288 | |
| Income tax paid | - 40,950 | - 68,005 | |
| Exchange rate and other effects | 697 | 483 | |
| Cash fl ow from operating activities | 206,949 | 193,213 | |
| 2. Cash fl ow from investing activities | |||
| Proceeds from disposal of intangible assets and property, plant and equipment | 2,855 | 3,702 | |
| Proceeds from disposal of non-current assets held for sale | 7,200 | 0 | |
| Payments for investments in property, plant and equipment and investment property |
- 56,823 | - 151,450 | |
| Payments for investments in intangible assets | 22. | - 7,625 | - 7,524 |
| Proceeds from disposal of non-current fi nancial assets | 1,995 | 192 | |
| Payments for investments in non-current fi nancial assets | - 1,890 | - 795 | |
| Payments for acquiring interests in consolidated companies and other business units |
- 1,973 | - 7,145 | |
| Proceeds from the disposal of interests in consolidated companies and other business units |
0 | 5,703 | |
| Cash fl ow from investing activities | - 56,261 | - 157,317 | |
| 3. Cash fl ow from fi nancing activities | |||
| Dividends paid to shareholders of the parent company | 21. | - 30,695 | - 72,680 |
| Dividends paid to minority shareholders | - 30,569 | - 42,619 | |
| Redemption of lease liabilities | 45. | - 2,590 | - 3,145 |
| Proceeds from the issuance of bank loans | 0 | 64,193 | |
| Payments for the redemption of bank loans | - 31,314 | - 34,339 | |
| Cash fl ow from fi nancing activities | - 95,168 | - 88,590 | |
| 4. Financial funds at the end of the period | |||
| Change in fi nancial funds (subtotals 1.-3.) | 55,520 | - 52,694 | |
| Change in fi nancial funds due to exchange rates | - 994 | 689 | |
| Financial funds at the beginning of the period | 179,156 | 231,161 | |
| Financial funds at the end of the period | 43. | 233,682 | 179,156 |
| in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes |
2010 Group |
2010 Port Logistics |
2010 Real Estate |
2010 Consolidation |
|---|---|---|---|---|
| 1. Cash fl ow from operating activities | ||||
| Earnings before interest and taxes (EBIT) | 192,908 | 179,911 | 12,690 | 307 |
| Depreciation, amortization, impairment and reversals on non-fi nancial non-current assets |
110,961 | 107,151 | 4,117 | - 307 |
| Change in provisions | - 28,538 | - 29,021 | 483 | |
| Gains/losses arising from the disposal of non-current assets | - 82 | - 82 | 0 | |
| Change in inventories, trade receivables and other assets not attributable to investing or fi nancing activities |
- 7,572 | - 7,397 | 1,048 | - 1,223 |
| Change in trade payables and other liabilities not attributable to investing or fi nancing activities |
- 4,718 | - 6,266 | 325 | 1,223 |
| Interest received | 5,147 | 5,196 | 85 | - 134 |
| Interest paid | - 20,904 | - 16,240 | - 4,798 | 134 |
| Income tax paid | - 40,950 | - 39,156 | - 1,794 | |
| Exchange rate and other effects | 697 | 697 | 0 | |
| Cash fl ow from operating activities | 206,949 | 194,793 | 12,156 | 0 |
| 2. Cash fl ow from investing activities | ||||
| Proceeds from disposal of intangible assets and property, plant and equipment |
2,855 | 2,855 | 0 | |
| Proceeds from disposal of non-current assets held for sale | 7,200 | 7,200 | 0 | |
| Payments for investments in property, plant and equipment and investment property |
- 56,823 | - 49,870 | - 6,953 | |
| Payments for investments in intangible assets | - 7,625 | - 7,624 | - 1 | |
| Proceeds from disposal of non-current fi nancial assets | 1,995 | 1,995 | 0 | |
| Payments for investments in non-current fi nancial assets | - 1,890 | - 1,890 | 0 | |
| Payments for acquiring interests in consolidated companies and other business units |
- 1,973 | - 1,973 | 0 | |
| Cash fl ow from investing activities | - 56,261 | - 49,307 | - 6,954 | 0 |
| 3. Cash fl ow from fi nancing activities | ||||
| Dividends paid to shareholders of the parent company | - 30,695 | - 27,990 | - 2,705 | |
| Dividends paid to minority shareholders | - 30,569 | - 30,569 | 0 | |
| Redemption of lease liabilities | - 2,590 | - 2,590 | 0 | |
| Payments for the redemption of bank loans | - 31,314 | - 28,872 | - 2,442 | |
| Cash fl ow from fi nancing activities | - 95,168 | - 90,021 | - 5,147 | 0 |
| 4. Financial funds at the end of the period | ||||
| Change in fi nancial funds (subtotals 1.-3.) | 55,520 | 55,465 | 55 | 0 |
| Change in fi nancial funds due to exchange rates | - 994 | - 994 | 0 | |
| Financial funds at the beginning of the period | 179,156 | 183,538 | - 4,382 | |
| Financial funds at the end of the period | 233,682 | 238,009 | - 4,327 | 0 |
| in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes |
2009 Group |
2009 Port Logistics |
2009 Real Estate |
2009 Consolidation |
|---|---|---|---|---|
| 1. Cash fl ow from operating activities | ||||
| Earnings before interest and taxes (EBIT) | 160,248 | 147,650 | 12,302 | 296 |
| Depreciation, amortization, impairment and reversals on non-fi nancial non-current assets |
117,017 | 113,175 | 4,138 | - 296 |
| Decrease in provisions | - 12,160 | - 10,646 | - 1,514 | |
| Gains/losses arising from the disposal of non-current assets | - 1,037 | - 1,072 | 35 | |
| Decrease in inventories, trade receivables and other assets not attributable to investing or fi nancing activities |
29,708 | 25,659 | 261 | 3,788 |
| Decrease in trade payables and other liabilities not attributable to investing or fi nancing activities |
- 17,865 | - 16,579 | - 298 | - 988 |
| Interest received | 5,112 | 5,125 | 132 | - 145 |
| Interest paid | - 20,288 | - 15,272 | - 5,161 | 145 |
| Income tax paid | - 68,005 | - 65,821 | - 2,184 | |
| Exchange rate and other effects | 483 | 483 | 0 | |
| Cash fl ow from operating activities | 193,213 | 182,702 | 7,711 | 2,800 |
| 2. Cash fl ow from investing activities | ||||
| Proceeds from disposal of intangible assets and property, plant and equipment |
3,702 | 3,694 | 8 | |
| Payments for investments in property, plant and equipment and investment property |
- 151,450 | - 147,006 | - 4,444 | |
| Payments for investments in intangible assets | - 7,524 | - 7,524 | 0 | |
| Proceeds from disposal of non-current fi nancial assets | 192 | 192 | 0 | |
| Payments for investments in non-current fi nancial assets | - 795 | - 772 | - 23 | |
| Payments for acquiring interests in consolidated companies and other business units |
- 7,145 | - 7,145 | 0 | |
| Proceeds from the disposal of interests in consolidated companies and other business units |
5,703 | 5,703 | 0 | |
| Cash fl ow from investing activities | - 157,317 | - 152,858 | - 4,459 | 0 |
| 3. Cash fl ow from fi nancing activities | ||||
| Dividends paid to shareholders of the parent company | - 72,680 | - 69,975 | - 2,705 | |
| Dividends paid to minority shareholders | - 42,619 | - 42,619 | 0 | |
| Redemption of lease liabilities | - 3,145 | - 3,145 | 0 | |
| Proceeds from the issuance of bank loans | 64,193 | 64,193 | 0 | |
| Payments for the redemption of bank loans | - 34,339 | - 31,897 | - 2,442 | |
| Cash fl ow from fi nancing activities | - 88,590 | - 83,443 | - 5,147 | 0 |
| 4. Financial funds at the end of the period | ||||
| Change in fi nancial funds (subtotals 1.-3.) | - 52,694 | - 53,599 | - 1,895 | 2,800 |
| Change in fi nancial funds due to exchange rates | 689 | 689 | 0 | |
| Financial funds at the beginning of the period | 231,161 | 236,448 | - 2,487 | - 2,800 |
| Financial funds at the end of the period | 179,156 | 183,538 | - 4,382 | 0 |
| annex to the notes | Subgroup Port Logistics | |||||
|---|---|---|---|---|---|---|
| 2010 | Container | Intermodal | Logistics | |||
| Segment revenue | ||||||
| Segment revenue from non-affi liated third parties | 594,981 | 315,561 | 115,503 | |||
| Inter-segment revenue | 10,283 | 1,690 | 4,928 | |||
| Total segment revenue | 605,264 | 317,251 | 120,431 | |||
| Earnings | ||||||
| EBITDA | 236,272 | 42,478 | 13,199 | |||
| EBITDA margin | 39.0 % | 13.4 % | 11.0 % | |||
| EBIT | 155,726 | 24,760 | 6,174 | |||
| EBIT from continuing activities1 | 155,726 | 22,585 | 6,174 | |||
| Segment assets | 901,375 | 245,460 | 110,632 | |||
| Other segment information | ||||||
| Investments | ||||||
| Property, plant and equipment and investment property |
131,863 | 20,135 | 3,625 | |||
| Intangible assets | 6,036 | 844 | 84 | |||
| Depreciation of property, plant and equipment and investment property |
77,143 | 14,394 | 6,797 | |||
| of which impairment | 2,160 | |||||
| Amortization of intangible assets | 3,402 | 3,324 | 228 | |||
| of which impairment | 3,000 | |||||
| Non-cash items | 9,173 | 1,224 | 1,033 | |||
| Container throughput in thousand TEU | 5,844 | |||||
| Container transport3 in thousand TEU |
1,696 | |||||
| 2009 | ||||||
| Segment revenue | ||||||
| Segment revenue from non-affi liated third parties | 557,737 | 275,835 | 110,130 | |||
| Inter-segment revenue | 3,879 | 1,491 | 4,792 | |||
| Total segment revenue | 561,616 | 277,326 | 114,922 | |||
| Earnings | ||||||
| EBITDA | 225,522 | 31,550 | 14,042 | |||
| EBITDA margin | 40.2 % | 11.4 % | 12.2 % | |||
| EBIT | 149,619 | 4,401 | 8,230 | |||
| EBIT from continuing activities2 | 149,619 | 21,889 | 8,230 | |||
| Segment assets | 834,096 | 256,724 | 113,271 | |||
| Other segment information | ||||||
| Investments | ||||||
| Property, plant and equipment and investment property |
89,515 | 35,586 | 19,572 | |||
| Intangible assets | 6,992 | 284 | 597 | |||
| Depreciation of property, plant and equipment and investment property |
71,727 | 15,084 | 5,582 | |||
| Amortization of intangible assets | 4,176 | 315 | 229 | |||
| Amortization and depreciation on non-current assets held for sale |
11,749 | |||||
| Non-cash items | 12,656 | 5,199 | 4,137 | |||
| Container throughput in thousand TEU | 4,913 | |||||
| Container transport3 in thousand TEU |
1,500 |
EBIT from continuing activities does not contain the result from CTL.
2 In order to faciliate comparison, the previous year's values have been presented without the current result from combisped and from CTL.
The transport volume was fully consolidated.
| Group | Consolidation and reconciliation with Group |
Total | Subgroup Real Estate | |
|---|---|---|---|---|
| Real Estate | Holding/Other | |||
| 1,073,122 | 0 | 1,073,122 | 31,325 | 15,752 |
| 0 | - 152,501 | 152,501 | 2,635 | 132,965 |
| 1,225,623 | 33,960 | 148,717 | ||
| 306,888 | 478 | 306,410 | 16,807 | - 2,346 |
| 49.5 % | - 1.6 % | |||
| 192,908 | 2,629 | 190,279 | 12,690 | - 9,071 |
| 190,692 | 2,588 | 188,104 | 12,690 | - 9,071 |
| 1,715,137 | 79,572 | 1,635,565 | 157,940 | 220,158 |
| 165,898 | 0 | 165,898 | 6,952 | 3,323 |
| 7,941 | 85 | 7,856 | 1 | 891 |
| 107,577 | - 1,016 | 108,593 | 4,105 | 6,154 |
| 2,160 | 0 | 2,160 | ||
| 6,404 | - 1,133 | 7,537 | 12 | 571 |
| 3,000 | 0 | 3,000 | ||
| 10,175 | 206 | 9,969 | 802 | - 2,263 |
| 990,743 | 0 | 990,743 | 30,201 | 16,840 |
| 0 | - 127,538 | 127,538 | 2,517 | 114,859 |
| 1,118,281 | 32,718 | 131,699 | ||
| 277,549 | 355 | 277,194 | 16,440 | - 10,360 |
| 50.2 % | - 7.9 % | |||
| 160,248 | 3,119 | 157,129 | 12,303 | - 17,424 |
| 177,667 | 3,050 | 174,617 | 12,303 | - 17,424 |
| 1,590,499 | 53,385 | 1,537,114 | 156,150 | 176,873 |
| 152,157 | - 350 | 152,507 | 4,445 | 3,389 |
| 7,524 | - 815 | 8,339 | 0 | 466 |
| 101,868 | - 1,083 | 102,951 | 4,124 | 6,434 |
| 3,683 | - 1,681 | 5,364 | 14 | 630 |
| 11,749 | 0 | 11,749 | ||
| 57,808 | 102 | 57,706 | 1,342 | 34,372 |
in € thousand
| Parent company | |||||||
|---|---|---|---|---|---|---|---|
| Retained | |||||||
| Subscribed capital | Capital reserve | consolidated earnings |
Reserve for translation |
||||
| A division | S division | A division | S division | ||||
| Balance as of 31.12.2008 | 69,975 | 2,705 | 139,222 | 506 | 311,693 | - 15,548 | |
| Dividends | - 72,680 | ||||||
| Total comprehensive income | 53,046 | - 3,076 | |||||
| Acquisition/disposal of minority interests in consolidated entities |
|||||||
| Other changes | - 254 | ||||||
| Balance as of 31.12.2009 | 69,975 | 2,705 | 139,222 | 506 | 291,805 | - 18,624 | |
| Balance as of 31.12.2009 | 69,975 | 2,705 | 139,222 | 506 | 291,805 | - 18,624 | |
| Dividends | - 30,695 | ||||||
| Settlement to minority shareholders1 | |||||||
| Total comprehensive income | 76,227 | 3,578 | |||||
| Acquisition/disposal of minority interests in consolidated entities |
|||||||
| Other changes | |||||||
| Balance as of 31.12.2010 | 69,975 | 2,705 | 139,222 | 506 | 337,337 | - 15,046 |
For details please refer to note 35 of the notes.
| Total consolidated equity |
Minority interests |
Parent com pany interests |
||||
|---|---|---|---|---|---|---|
| Other comprehensive income | ||||||
| Other | Deferred taxes on changes recognized directly in equity |
Actuarial gains/losses |
Cash fl ow hedges |
|||
| 682,580 | 108,466 | 574,114 | 11,611 | - 25,475 | 79,786 | - 361 |
| - 115,299 | - 42,619 | - 72,680 | ||||
| 69,482 | 35,903 | 33,579 | 75 | 7,667 | - 23,625 | - 508 |
| 245 | 245 | 0 | ||||
| - 23 | 230 | - 253 | 1 | |||
| 636,985 | 102,225 | 534,760 | 11,687 | - 17,808 | 56,161 | - 869 |
| 636,985 | 102,225 | 534,760 | 11,687 | - 17,808 | 56,161 | - 869 |
| - 61,265 | - 30,569 | - 30,695 | ||||
| - 121,543 | - 121,543 | 0 | ||||
| 113,213 | 37,898 | 75,315 | 18 | 2,110 | - 6,461 | - 157 |
| - 268 | - 268 | 0 | ||||
| - 120 | 0 | - 120 | - 120 | |||
| 567,002 | - 12,257 | 579,260 | 11,585 | - 15,698 | 49,700 | - 1,026 |
in € thousand; annex to the notes
| Parent company | |||||
|---|---|---|---|---|---|
| Subscribed capital | Capital reserve | Retained consolidated earnings |
Reserve for translation |
||
| Balance as of 31.12.2008 | 69,975 | 139,222 | 303,825 | - 15,548 | |
| Dividends | - 69,975 | ||||
| Total comprehensive income subgroup | 46,705 | - 3,076 | |||
| Acquisition/disposal of minority interests in consolidated entities |
|||||
| Other changes | - 254 | ||||
| Balance as of 31.12.2009 | 69,975 | 139,222 | 280,300 | - 18,624 | |
| Balance as of 31.12.2009 | 69,975 | 139,222 | 280,300 | - 18,624 | |
| Dividends | - 27,990 | ||||
| Settlement to minority shareholders1 | |||||
| Total comprehensive income subgroup | 69,890 | 3,578 | |||
| Acquisition/disposal of minority interests in consolidated entities |
|||||
| Other changes | |||||
| Balance as of 31.12.2010 | 69,975 | 139,222 | 322,200 | - 15,046 | |
| 1 For details please refer to note 35 of the notes. |
in € thousand; annex to the notes
| Balance as of 31.12.2008 | |
|---|---|
| Dividends | |
| Total comprehensive income subgroup | |
| Balance as of 31.12.2009 | |
| Plus income statement consolidation effect | |
| Less balance sheet consolidation effect | |
| Total effects of consolidation | |
| Balance as of 31.12.2009 | |
| Balance as of 31.12.2009 | |
| Dividends | |
| Total comprehensive income subgroup | |
| Balance as of 31.12.2010 | |
| Plus income statement consolidation effect | |
| Less balance sheet consolidation effect | |
| Total effects of consolidation | |
| Balance as of 31.12.2010 | |
| Total subgroup consolidated equity |
Minority interests |
Parent com pany interests |
||||
|---|---|---|---|---|---|---|
| Other comprehensive income | ||||||
| Other | Deferred taxes on changes recognized directly in equity |
Actuarial gains/losses |
Cash fl ow hedges |
|||
| 670,092 | 108,466 | 561,626 | 11,611 | - 24,804 | 77,706 | - 361 |
| - 112,594 | - 42,619 | - 69,975 | ||||
| 63,357 | 35,903 | 27,454 | 75 | 7,564 | - 23,306 | - 508 |
| 245 | 245 | 0 | ||||
| - 23 | 230 | - 253 | 1 | |||
| 621,076 | 102,225 | 518,851 | 11,687 | - 17,240 | 54,400 | - 869 |
| 621,076 | 102,225 | 518,851 | 11,687 | - 17,240 | 54,400 | - 869 |
| - 58,560 | - 30,569 | - 27,990 | ||||
| - 121,543 | - 121,543 | 0 | ||||
| 106,967 | 37,898 | 69,069 | 18 | 2,066 | - 6,326 | - 157 |
| - 268 | - 268 | 0 | ||||
| - 120 | 0 | - 120 | - 120 | |||
| 547,552 | - 12,257 | 559,810 | 11,585 | - 15,174 | 48,074 | - 1,026 |
| Total subgroup consolidated equity |
Other comprehensive income | ||||
|---|---|---|---|---|---|
| Deferred taxes on changes recognized directly in equity |
Actuarial gains/losses |
Retained consolidated earnings |
Capital reserve | Subscribed capital |
|
| 24,843 | - 671 | 2,080 | 20,223 | 506 | 2,705 |
| - 2,705 | - 2,705 | ||||
| 5,875 | 103 | - 319 | 6,091 | ||
| 28,013 | - 568 | 1,761 | 23,610 | 506 | 2,705 |
| 250 | 250 | ||||
| - 12,354 | - 12,354 | ||||
| - 12,105 | - 12,105 | ||||
| 15,909 | - 568 | 1,761 | 11,505 | 506 | 2,705 |
| 28,013 | - 568 | 1,761 | 23,610 | 506 | 2,705 |
| - 2,705 | - 2,705 | ||||
| 4,731 | 44 | - 135 | 4,822 | ||
| 30,041 | - 524 | 1,626 | 25,728 | 506 | 2,705 |
| 1,515 | 1,515 | ||||
| - 12,105 | - 12,105 | ||||
| - 10,591 | - 10,591 | ||||
| 19,450 | - 524 | 1,626 | 15,138 | 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 the resolution of the Annual General Meeting on 28 June 2007, the HHLA Group has consisted of the subgroup Port Logistics (A division) and the subgroup Real Estate (S division) with effect from 1 January 2007. 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 assets 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 Financial Statements for the 2010 fi nancial year were again 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 from the European Parliament and the European 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 assets, fi nancial and earnings position of the HHLA Group.
With regard to the effects of applying IFRS for the fi rst time as of the transitional date of 1 January 2005, please refer to our 2006 Annual Report.
For the most part, the accounting and valuation policies, notes and disclosures about the Consolidated Financial Statements for the 2010 fi nancial year are based on the same accounting and valuation principles used for the 2009 Consolidated Financial Statements. Exceptions are the reclassifi cations listed under Note 6 and the effects of new IFRS accounting standards stated in Note 5. Use of the latter became mandatory for the Group on 1 January 2010. The previous year's fi gures have been restated accordingly. The accounting and valuation principles applied are explained in Note 6.
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 Financial Statements. The type-of-expenditure format has been used for the income statement. The Consolidated Financial Statements and the disclosures in the Notes have been prepared in euros. Unless otherwise 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.
The Consolidated Financial Statements are prepared using the historical cost principle. This does not apply to derivative fi nancial instruments and available-for-sale fi nancial assets carried at fair value. These HHLA Consolidated Financial Statements for the fi nancial year ending 31 December 2010 were approved by the Executive Board on 4 March 2011 for presentation to the Supervisory Board. It is the Supervisory Board's responsibility to examine the Consolidated Financial Statements and to state whether or not it approves them. The Consolidated Financial Statements are due to be published on 31 March 2011.
HHLA operates in the following four segments:
With its high-performance container terminals, HHLA maintains the Port of Hamburg's outstanding importance as a logistics hub for general cargo traffi c. Activities at HHLA's three terminals in Altenwerder, Burchardkai and Tollerort consist primarily of handling container ships and transferring containers to other carriers. Handling services are also provided at an additional container terminal in Odessa, Ukraine. This HHLA segment offers a comprehensive range of services covering all aspects of containers and ship handling.
HHLA's Intermodal companies provide a comprehensive transport network encompassing rail, road and sea which links the German seaports with their hinterland in Europe. The companies TFG Transfracht Internationale Gesellschaft für kombinierten Güterverkehr mbH & Co. KG, Frankfurt, the METRANS Group, Czech Republic, and the Polzug Group, Hamburg and Warsaw (Poland), operate regular rail services from and to Central and Eastern Europe. They are all market leaders in hinterland container transport in their respective regions. CTD Container-Transport-Dienst GmbH, Hamburg, provides container transport on the roads immediately surrounding the greater Hamburg region, in northern Germany and to long-distance destinations.
The Logistics segment encompasses a wide range of contract and warehousing logistics, consulting and 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's business activities encompass the development, letting and managing 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 Group is driving the process of change in Hamburg's Speicherstadt historical warehouse district from traditional warehousing to a modern mix of uses, including offi ces and cultural organizations.
The Consolidated Financial 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 or pro rata are recognized 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 at the time of the acquisition. Previously unreported intangible assets which can be included in the accounts under IFRS 3 (revised) in conjunction with IAS 38 and contingent liabilities are recognized at fair value. In the course of subsequent consolidations, the previously unrecognized hidden reserves and losses realized by this procedure are retained at the same carrying amount, amortized or reversed, depending on the treatment of the equivalent assets and liabilities.
Any positive difference arising in the course of this initial consolidation is capitalized 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 minority interests in equity.
The acquisition of additional minority 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 minority interests in consolidated companies are likewise recognized 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.
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 unrealized inter-company profi ts (elimination of inter-company profi ts); these assets are therefore recognized 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 recognized 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 Financial 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 2010 | 33 | 7 | 40 |
| Additions | 0 | 1 | 1 |
| Mergers | 1 | 2 | 3 |
| 31 December 2010 | 32 | 6 | 38 |
| Companies consolidated pro rata | |||
| 1 January 2010 | 6 | 1 | 7 |
| 31 December 2010 | 6 | 1 | 7 |
| Companies reported using the equity method |
|||
| 1 January 2010 | 1 | 0 | 1 |
| 31 December 2010 | 1 | 0 | 1 |
| Total | 39 | 7 | 46 |
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. HHLA recognizes 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 Financial 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 Financial 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 recognizes 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 Financial Statements using the proportionate consolidation method until such time as joint control of the entity by the Group ends.
The partnership or consortium agreements governing joint ventures contain provisions which ensure joint control.
The share of assets, liabilities, income and expenses attributable to the Group from joint ventures as of 31 December 2010 and 31 December 2009 is as follows:
| in € thousand | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Current assets | 17,582 | 16,484 |
| Non-current assets | 19,051 | 19,916 |
| Total assets | 36,633 | 36,400 |
| Current liabilities | 4,627 | 4,821 |
| Non-current liabilities | 23,922 | 20,552 |
| Total liabilities | 28,549 | 25,373 |
| - 140,895 | - 135,548 |
|---|---|
| 145,381 | 138,514 |
| 2010 | 2009 |
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 associated 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 amortization, any goodwill recognized 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 company are eliminated in proportion to the interest in the associated company.
The following overview shows key items from the balance sheet and income statement of the company accounted for using the equity method in relation to the interest held:
| in € thousand | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Assets | 3,892 | 2,832 |
| Liabilities | 2,384 | 1,434 |
| in € thousand | 2010 | 2009 |
|---|---|---|
| Revenue | 4,091 | 3,183 |
| Earnings from associates for using | ||
| the equity method | 208 | 164 |
The Czech subsidiary METRANS a.s., Prague (METRANS), acquired 50 % of the shares in RAILTRANSPORT s.r.o., Prague, Czech Republic (RAILTRANSPORT), on 25 June 2009 for a price of CZK 5 million. The nominal capital amounted to CZK 1 million. The company's purpose is to provide rail transport, specialist retail and brokerage services. Following the acquisition, the shareholders' meeting resolved to increase the nominal capital. With the nominal capital increase dated 28 December 2010, METRANS grew its stake in RAILTRANSPORT to 80 %. Nominal capital now totals CZK 11,874,000 and has been fully paid in. METRANS holds CZK 9.5 million of the nominal capital. The company belongs to the Intermodal segment and was included in the group of consolidated companies for the fi rst time as of 31 December 2010. The acquisition costs for this company amounted to € 732 thousand. At the time of initial consolidation, the company had assets totalling € 1,948 thousand, primarily from fi nance leases. Assumed liabilities amounted to € 1,801 thousand and consisted largely of payables under fi nance leases. After allocating minority interests, this resulted in a pro rata difference of € 316 thousand, which is recorded as goodwill. If the company had been acquired at the beginning
of the period, revenue of € 2,086 thousand and profi t after tax of € - 364 thousand would have been included in the Consolidated Financial Statements.
The merger agreement between CTT Besitzgesellschaft mbH, Hamburg, and HHLA Container Terminal Tollerort GmbH, Hamburg, was approved at a shareholders' meeting on 9 June 2010. It became effective when it was entered into the commercial register on 22 June 2010.
The merger of UMSP Property a.s., Prague, SDM-DEPO a.s., Prague, and METRANS Plzeň a.s., Nýřany, with METRANS was formally adopted on 21 June 2010. The relevant contracts were signed before a notary on 21 July 2010. This merger became effective when it was entered into the commercial register on 7 December 2010. To date, the interest in METRANS Plzeň has been reported at historical cost under fi nancial assets due to its lack of materiality. Following the merger, a loss of € 610 thousand was entered in the current Consolidated Financial Statements.
There were no other changes due to fi rst-time consolidation or deconsolidation 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 recognized 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 recognized 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 recognized in the income statement on foreign currency items resulted in a loss of € 897 thousand in the fi nancial year (previous year: profi t of € 958 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 organizational 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 trans-
lated at the weighted average rate for the fi nancial year. Equity components are converted at their respective historical rates. Any translation differences are recognized 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 high-infl ation economies.
The main exchange rates used for currency translation are shown in the following table:
| Spot rate on = 1 euro |
Average annual rate = 1 euro |
||||
|---|---|---|---|---|---|
| Currency | ISO Code |
31.12.2010 31.12.2009 | 2010 | 2009 | |
| Czech crown | CZK | 25.061 | 26.473 | 25.342 | 26.521 |
| Polish zloty | PLN | 3.975 | 4.104 | 4.012 | 4.333 |
| Ukrainian hryvnia | UAH | 10.573 | 11.449 | 10.550 | 10.863 |
The following revised and new IASB/IFRIC standards and interpretations were mandatory for the fi rst time in the 2010 fi nancial year:
| IFRS 1 (revised) | First-time Adoption of IFRS |
|---|---|
| IFRS 3 (revised) Amendments to IAS 27 |
Business Combinations Consolidated and Separate Financial Statements |
| Amendments to IFRS 1 | Additional Exemptions for First-time Adopters (July 2009) |
| Amendments to IFRS 2 | Group Cash-settled Share-based Payment Transactions |
| IAS 39 | Eligible Hedged Items – Amendments to IAS 39 Financial Instruments: Recognition and Measurement |
| IFRIC 12 | Service Concession Arrangements |
| IFRIC 15 | Agreements for the Construction of Real Estate |
| IFRIC 16 | Hedges of a Net Investment in a Foreign Operation |
| IFRIC 17 | Distributions of Non-cash Assets to Owners |
| IFRIC 18 | Transfers of Assets from Customers |
| Various | Improvements to IFRS (April 2009) |
The following amendments to standards and interpretations are voluntary for the 2010 fi nancial year:
| IAS 24 (revised) | Related party disclosures |
|---|---|
| Amendments to IFRS 1 | Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters (November 2009) |
| Amendments to IAS 32 | Financial Instruments: Presentation |
| IFRIC 19 | Extinguishing Financial Liabilities with Equity Instruments |
| Amendments to IFRIC 14 | Prepayments of a Minimum Funding Requirement |
The following IASB standards and interpretations have not yet been adopted by the EU and have not been applied:
| IFRS 9 | Financial Instruments |
|---|---|
| Amendments to IFRS 7 | Financial Instruments: Disclosures |
| Amendments to IAS 12 | Deferred Tax on Investment Property |
| Various | Improvements to IFRS (May 2010) |
The amendments had the following specifi c effects:
IFRS 1 has been restructured to make it easier to understand. As part of this improvement, a number of outdated transitional guidelines were deleted and minor changes were made to the text. The new structure will also make it easier to take future changes into account. The revision of this standard had no impact on HHLA's Consolidated Financial Statements.
In January 2008, the IASB published the revised standards IFRS 3 Business Combinations (IFRS 3 [2008]) and IAS 27 Consolidated and Separate Financial Statements under IFRS (IAS 27 [2008]). In IFRS 3 (2008) the application of the purchase method in the reporting of mergers is given a new regulatory framework. Signifi cant amendments concern the valuation of minority interests, the recording of gradual company acquisitions and the treatment of conditional purchase price components and incidental acquisition costs. The new regulation stipulates that non-controlling interests can be measured either at their fair value (full goodwill method) or at the fair value of the pro rata identifi able net assets. In the case
of gradual company acquisitions, the new regulation provides for a revaluation through profi t and loss of the shares held as of the time when control was transferred. The revaluation takes account of the fair value at the time of acquisition of the additional shares. Any adjustment of conditional purchase price components which are reported as liabilities at the time of acquisition must be recorded through profi t and loss in the future. Incidental acquisition costs are recognized as expenses as of the time when they arise. Signifi cant alterations to IAS 27 (2008) affect the balance sheet reporting of transactions in which a company retains control as well as transactions where control is ceded. Transactions that do not lead to a loss of control must be reported under equity with no effect on income. Any remaining shares must be measured at fair value as of the time when control is lost. Depending on the type and extent of current and future transactions, the new regulations under IAS 27 and IFRS 3 will have an impact on the assets, fi nancial and earnings position of the HHLA Group.
The amendments published in July 2009 concerned the retrospective application of IFRS in particular situations, and are intended to ensure that companies do not incur disproportionately high costs when switching to IFRS. These exemptions concern companies in the oil and gas industry as well as companies with existing leasing contracts which have to reclassify their leasing contracts in line with IFRIC 4. The amendments to IFRS 1 (July 2009) did not have an effect on HHLA's Consolidated Financial Statements.
In June 2009, the IASB published amendments to IFRS 2 Sharebased Payment. IFRS 2 stipulates that a company which receives goods or services as part of a share-based payment agreement must account for these goods or services in accordance with IFRS 2. It is of no relevance which company within the group settles the liability with the supplier or employee, or whether the liability is settled by the issuance of shares or cash. The amendments to IFRS 2 render IFRIC 8 and IFRIC 11 obsolete, as IFRS 2 now incorporates guidance previously included in these interpretations. These amendments to IFRS 2 had no impact on HHLA's Consolidated Financial Statements.
Financial Instruments: Recognition and Measurement The IASB published amendments to IAS 39 Financial Instruments: Recognition and Measurement in July 2008. These amendments clarify the procedure for recognizing transactions used to hedge the infl ation risk of fi nancial instruments and options used as hedging instruments. Applying these amendments had no material impact on these Consolidated Financial Statements.
IFRIC 12 deals with the issue of how private companies should recognize rights and obligations arising from contracts with public infrastructure facilities. A contractual agreement can stipulate that a private company construct or improve public sector assets and operate and maintain this facility. IFRIC 12 also clarifi es how to account for payment received by the operator of this facility. The application of this interpretation has no effect for the HHLA Group.
Such agreements cover the recognition of revenue by real estate developers for sales of property before construction is complete. The application of this interpretation has no effect for the HHLA Group.
IFRIC 16 clarifi es how to recognize hedges of exchange rate risk for net investments in a foreign operation. Only foreign exchange differences arising from a difference between an entity's own functional currency and that of its foreign operation can be designated as a hedged risk. The net assets of the foreign operation recognized in the Consolidated Financial Statements may be hedged. The aforementioned hedging instruments can be held by any company within the group except the company for which the exchange rate risk resulting from the net investment is being hedged. IFRIC 16 clarifi es that IAS 39.102 must be applied to determine the amounts that need to be reclassifi ed to profi t or loss from the foreign currency translation reserve when the foreign operation is sold. The amount of the cumulative foreign exchange gains or losses can be determined using the direct or the step-by-step method of consolidation. The application of this interpretation has no impact on HHLA's Consolidated Financial Statements.
IFRIC 17 clarifi es how to recognize dividends distributed to owners in the form of non-cash assets rather than cash and cash equivalents. A dividend payable should be recognized when the dividend has been appropriately authorized by a management body and is no longer at the discretion of the entity. The dividend payable to owners should be measured at the fair value of the net assets to be distributed. Entities should recognize the difference between the dividend paid and the carrying amount of the dividend payable with effect on net income. IFRS 5 was amended at the same time as IFRIC 17 coming into effect. These amendments concern non-current assets held for sale intended for use in dividend distributions. This interpretation has no impact on these Consolidated Financial Statements. There is currently no reason to believe that this interpretation will have an effect on future Consolidated Financial Statements.
IFRIC 18 is mainly relevant for the energy sector. It clarifi es agreements in which a company receives from a customer an item of property, plant and equipment that the company must then use to either connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services. IFRIC 18 also covers cases in which the company receives cash from a customer that must be used only to acquire or construct the aforementioned assets. IFRIC 18 had no impact on these Consolidated Financial Statements.
This combined standard aims to condense the existing standards and make them easier to understand. Most of the changes are clarifi cations or corrections to existing IFRS or amendments arising from modifi cations previously made to the IFRS. Applying these improvements did not lead to any material changes in these Consolidated Financial Statements.
The amendments published in November 2009 affect clarifi cations for companies controlled by governments. The previous obligations to make extensive disclosures regarding transactions with companies controlled by the same government have been simplifi ed. Now, only transactions that are signifi cant for the fi nancial recipients must be disclosed. The amendment to IAS 24 also clarifi es the defi nition of a related party. The amended standard applies for fi nancial years that begin on or after 1 January 2011. It may be applied earlier voluntarily. In future, the amendments will lead to additional disclosures in the Notes. HHLA did not apply the standard early.
This amendment will make it possible for fi rst-time adopters (as defi ned by IFRS 1) to apply transitional provisions for the application of IFRS 7 Financial Instruments: Disclosures. This affects all disclosures resulting from the fi rst-time adoption of the alterations to IFRS 7 published in March 2009. First-time adopters will be exempted from providing comparative disclosures for one year after adoption. This is aimed at preventing companies from incurring disproportionately high additional costs as a result of only having a short time period before fi rst-time adoption. The amendments to IFRS 1 (November 2009) will not have an effect on HHLA's Consolidated Financial Statements.
The amendments published in October 2009 clarify how to account for certain rights issues, options and option warrants if the issued instruments are not in the functional currency of the issuer. If such instruments are offered to the current owners proportionately at a fi xed amount, they should be classifi ed as equity instruments if the currency of their rights issue is different from the functional currency of the issuer. The current practice of accounting for such cases as derivative liabilities will be abolished in the future. These amendments have no material consequences for the HHLA Group.
IFRIC 19 addresses what is required if a company and a creditor renegotiate the conditions of a fi nancial liability and the creditor accepts shares or other equity instruments belonging to the company to extinguish all or part of a fi nancial liability. IFRIC 19 states the following:
The amendments to IFRIC 19 had no impact on HHLA's Consolidated Financial Statements.
The amendments concern occasions where companies make voluntary prepaid contributions in order to comply with minimum funding requirements. The amendments allow affected companies to recognize the benefi ts resulting from these payments as assets. The application of the revised version of IFRIC 14 will be mandatory for fi nancial years that begin after 1 January 2011. It may be applied earlier voluntarily. The amendments to IFRIC 14 are not expected to have any effect on HHLA's future Consolidated Financial 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 amendments issued in 2009 introduced new requirements for classifying and measuring fi nancial assets. IFRS 9 divides all fi nancial assets into two measurement categories (those measured at amortized cost and those measured at fair value). It also includes simplifi ed regulations for options regarding the measurement of fi nancial assets. The reclassifi cation options were altered as well. In October 2010, IFRS 9 Financial Instruments was republished containing new rules for reporting fi nancial liabilities. There are still two measurement categories (amortized cost and fair value). In addition to this, the rules from the existing IAS 39 for derecognizing fi nancial assets and liabilities were incorporated. There are further plans to add rules on the impairment of fi nancial assets measured at amortized cost along with hedge accounting guidelines to IFRS 9. This standard must be applied for fi nancial years that begin on or after 1 January 2013. The amendments to IFRS 9 are not expected to have any material effect on HHLA's future Consolidated Financial Statements.
IFRS 7 Financial Instruments: Disclosures 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 securitization). The amendments largely align the corresponding disclosure duties under IFRS and US-GAAP. The amendment to IFRS 7 applies to fi nancial periods beginning on or after 1 July 2011 and is not expected to have any effect on HHLA's future Consolidated Financial Statements.
IAS 12 Deferred Tax on Investment Property was published in September 2010. The amendment makes it clear that existing temporary tax differences on investment property are recovered or settled by means of disposal and no longer through use. As
a result of the amendment, 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. The amendment to IAS 12 applies to fi nancial periods beginning on or after 1 January 2012 and is not expected to have any material effect on HHLA's future Consolidated Financial Statements.
The annual fi nancial statements of the companies included in the Consolidated Financial Statements are based on uniform accounting and valuation principles. The following specifi c accounting and valuation principles were applied:
Intangible assets are capitalized 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 recognized at historical cost. Intangible assets with a fi nite useful life are amortized 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, and if necessary, adjusted 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 recognized 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 capitalized 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:
| 2010 | 2009 | |
|---|---|---|
| Software | 3 – 7 years | 3 – 7 years |
Property, plant and equipment are recognized at historical cost less depreciation and accumulated impairment losses. The costs of ongoing maintenance are recognized immediately in profi t and loss. The amount of costs is based on directly attributable unit costs plus a proportion of directly attributable material costs and production overheads including depreciation. In accordance with IAS 16, 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 recognized at the same time. The expense is recognized by depreciating the capitalized asset and by accruing interest on the provision, which is included in interest expenses, over the asset's useful life. 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:
| 2010 | 2009 | |
|---|---|---|
| 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 capitalized 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 recognized 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 straight-line depreciation and accumulated impairment losses. Subsequent expenses are capitalized 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 investment 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 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 31 December 2010, the interest rate for discounting was between 7.4 % and 9.1 % p.a. (previous year: 8.4 % to 9.5 % 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 % to 1.5 % were 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 recognized in prior periods no longer exists or has decreased. If there are such indications, the recoverable amount is estimated. Previously recognized 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 recognized. 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 amortization, if no impairment losses had been recognized in prior years. Any such reversals must be recognized immediately in profi t and loss for the period. Following a reversal, the amount of depreciation or amortization 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 recognized 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 recognized as of their settlement date, i.e. upon delivery and transfer of risk. The only exception is the recognition of derivatives, which are recognized 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 recognized 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 amortized cost using the effective interest rate method. Gains and losses are recognized in the result for the period when the loans and receivables are derecognized or impaired and within the scope of repayment.
Trade receivables and other assets are recognized at amortized 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 derecognized 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 and cash equivalents are cash in hand, cheques, bank balances on deposit and short-term bank deposits which have an original maturity of up to six months and which are recognized at their face value. Cash used as a pledge or collateral is disclosed separately.
After initial recognition, available-for-sale fi nancial assets are carried at fair value and gains or losses are recognized in accumulated other equity. The gains or losses accumulated in equity are recognized in profi t and loss as of the date when the fi nancial instruments are derecognized or their impairment is determined.
The fair values of fi nancial instruments traded on organized 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 amortized 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 recognized 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 recognized, then the earlier impairment is reversed. A subsequent write-up is recognized in profi t and loss if the carrying amount of the asset at the time of the write-up does not exceed the amortized cost.
If there is an objective indication of impairment to a non-listed equity instrument that is not recognized 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 recognized in equity between the acquisition cost (less any repayments and amortization) and the current fair value, less any impairment allowances for the fi nancial asset, is recognized in profi t and loss. Write-ups on equity instruments classifi ed as available for sale are recognized directly in equity. Write-ups on debt instruments are recognized 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 recognized through profi t and loss.
Inventories include raw materials, consumables and supplies, work in progress, fi nished products and merchandise. They are initially recognized at acquisition or production cost. Measurement at the balance sheet date is made at the lower of cost and net realizable 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 realizable 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 transaction costs related to borrowing, including discounts and premiums. After initial recognition, fi nancial liabilities are measured at amortized 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 recognized 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 recognized 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 recognized in equity without effect on profi t and loss, after accounting for deferred taxes. The option of using the corridor method has not been exercised. Service expense affecting net income is recognized in personnel expenses and the interest proportion of the addition to provisions is recognized in the fi nancial result.
The compensation to be paid in the release phase of the so-called block model is recognized as provisions for phased early retirement. It is recognized 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 recognized 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 supplementary amounts, they are recognized 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 capitalized 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 recognized 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 recognized 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 recognized 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 amortized cost. Rental income from investment properties is recognized on a straight-line basis over the term of the leases.
Income is recognized 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 recognized:
Income is recognized 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 recognized 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 recognized only to the extent that the expenses incurred are eligible for reimbursement.
External staff costs, which were previously recognized in the cost of materials, have been reclassifi ed since the fi rst quarter of 2010. These expenses were reclassifi ed as personnel expenses for the fi rst time as of 31 March 2010. This item includes expenses for the deployment of employees of Gesamthafenbetriebs-Gesellschaft m.b.H., Hamburg. Due to the similarity of the employee situations, reclassifying these costs as personnel expenses makes our presentation more consistent. The corresponding fi gures for the previous year have been restated. The following overview can be used for comparison purposes:
| in € thousand | Cost of materials | Personnel expenses | ||
|---|---|---|---|---|
| 2010 | 2009 | 2010 | 2009 | |
| Before reclassifi cation | - 412,413 | - 346,113 | - 276,737 | - 284,741 |
| Reclassifi cation | 40,046 | 23,984 | - 40,046 | - 23,984 |
| After reclassifi cation | - 372,367 | - 322,129 | - 316,783 | - 308,725 |
Interest income and interest expenses are recognized when they are accrued or incurred.
Income from dividends is recognized 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 recognized when the service is rendered or when the expense is incurred. Income and expenses resulting from identical transactions or events are recognized in the same period. Rental expenses are recognized on a straight-line basis over the lease term.
Government grants are recognized when there is suffi cient certainty that they will be granted and the company fulfi ls the necessary conditions. Grants paid as reimbursement for expenses are recognized 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 recognized in profi t and loss on a straight-line basis by reducing the depreciation for the asset over its useful life.
Current claims for tax rebates and tax liabilities Current claims for tax rebates and tax liabilities for the fi nancial year 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 recognized 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 recognized for all taxable temporary differences.
Deferred tax assets are recognized for all deductible temporary differences 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. Unrecognized deferred tax assets are reviewed on each balance sheet date and recognized 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 realized 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 recognized directly in equity are recognized 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 recognized 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 recognized 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 the risk of fl uctuations in cash fl ows which can be attributed to a recognized 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 recognized 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 recognized as follows:
The effective portion of gains or losses from changes in the fair value of a hedging instrument is recognized directly in equity, taking account of the deferred taxes, while the ineffective portion is recognized in profi t and loss.
The amounts recognized 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 recognized in equity are added to the originally recognized carrying amount of the non-fi nancial asset or liability.
If the forecast transaction is no longer expected to occur, the amounts previously recognized in equity are recognized 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 recognized in equity remain separately recognized in equity until the forecast transaction occurs.
Preparing the Consolidated Financial 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; they are made 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 makes use of opinions from independent external actuaries 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. Details regarding the companies acquired in the reporting year are available in Note 3.
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 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. The carrying amount as of 31 December 2010 came to € 41,561 thousand (previous year: € 44,245 thousand). For more information, please refer to Note 22.
These activities relate to the development of software within the Group, which are capitalized as soon as the recognition requirements pursuant to IAS 38.57 are fulfi lled. HHLA amortizes 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 2010, the carrying amount of intangible assets resulting from internal development activities came to € 26,459 thousand (previous year: € 24,023 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 2010, the carrying amount came to € 185,568 thousand (previous year: € 186,471 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 characterized by material uncertainties. The present value of pension obligations as of 31 December 2010 came to € 329,221 thousand (previous year: € 323,824 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 recognizing 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. The present value of obligations as of 31 December 2010 came to € 11,669 thousand (previous year: € 21,304 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. The present value of obligations as of 31 December 2010 came to € 39,107 thousand (previous year: € 34,018 thousand). For more information, please refer to Note 37.
Assumptions and estimates are also made for value adjustments on doubtful receivables, for determining the duration of amortization 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.
The following table shows Group revenue by segment:
| in € thousand | 2010 | 2009 |
|---|---|---|
| Container | 594,981 | 557,737 |
| Intermodal | 315,561 | 275,835 |
| Logistics | 115,503 | 110,130 |
| Holding/Other | 15,752 | 16,840 |
| Real Estate | 31,325 | 30,201 |
| 1,073,122 | 990,743 |
Revenue by region:
| in € thousand | 2010 | 2009 |
|---|---|---|
| Germany | 846,704 | 805,054 |
| EU | 175,296 | 140,018 |
| Outside EU | 51,122 | 45,671 |
| 1,073,122 | 990,743 |
The changes in the inventories of fi nished and unfi nished products and service work in progress are as follows:
| in € thousand | 2010 | 2009 |
|---|---|---|
| Changes in the inventories of fi nished and unfi nished products and service work in |
||
| progress | - 1,149 | 360 |
| in € thousand | 2010 | 2009 |
|---|---|---|
| Container | 7,007 | 7,778 |
| Intermodal | 26 | 101 |
| Logistics | 49 | 0 |
| Holding/Other | 277 | 399 |
| 7,359 | 8,278 |
Own work capitalized results mainly from technical work capitalized in the course of construction work and development activities.
| in € thousand | 2010 | 2009 |
|---|---|---|
| Income from reversal of provisions | 12,050 | 5,521 |
| Income from other accounting periods | 6,314 | 7,427 |
| Compensation | 4,463 | 2,026 |
| Income from reversal of impairment loss | 3,020 | 284 |
| Reimbursements | 2,426 | 2,863 |
| Income from exchange rate differences | 1,844 | 3,957 |
| Proceeds on disposal of property, plant and equipment |
895 | 1,687 |
| Other operating income | 6,740 | 5,473 |
| 37,752 | 29,238 |
Income from the reversal of provisions is largely affected by changes in estimates concerning the amount of future payment obligations arising from phased early retirement agreements (€ 6,241 thousand) and demolition obligations which no longer exist (€ 4,233 thousand). Income from other accounting periods primarily consists of unclaimed reimbursements for customers and uninvoiced construction services totalling € 4,340 thousand (previous year: € 4,459 thousand). Income from reversal of impairment loss includes reversals to fair value amounting to € 2,000 thousand on non-current assets held for sale which were sold during the year under review.
In the reporting year, the cost of materials could be broken down as follows:
| in € thousand | 2010 | 2009 |
|---|---|---|
| Raw materials, consumables and supplies |
63,335 | 54,626 |
| External staff * | 193 | 1,237 |
| Purchased services | 308,839 | 266,266 |
| 372,367 | 322,129 |
* Reclassifi cation, see Note 6, Staff deployment
Personnel expenses in the fi nancial year were as follows:
| in € thousand | 2010 | 2009 |
|---|---|---|
| Wages and salaries | 228,805 | 233,716 |
| Social security contributions and benefi ts | 43,324 | 46,565 |
| Staff deployment* | 40,046 | 23,984 |
| Current service expense | 3,945 | 3,804 |
| Other retirement benefi t expenses | 663 | 656 |
| 316,783 | 308,725 |
* Reclassifi cation, see Note 6, Staff deployment
The direct remuneration paid to members of the Executive Board totalled € 2,554 thousand for the 2010 fi nancial year (previous year: € 2,599 thousand). Of this, € 1,450 thousand related to the basic salary (previous year: € 1,519 thousand), € 53 thousand was other benefi ts (previous year: € 75 thousand) and performancerelated remuneration made up € 1,051 thousand (previous year: € 1,005 thousand). In addition to this, expenses for pension entitlements came to € 810 thousand (previous year: € 1,511 thousand). Former members of the Executive Board and their surviving dependents received total payments of € 821 thousand (previous year: € 751 thousand). Total provisions of € 11,692 thousand (previous year: € 11,639 thousand) have been formed for pension obligations to former members of the Executive Board and their surviving dependents. For more details on the remuneration paid to the Executive Board and the Supervisory Board, please refer to the Remuneration Report.
Expenses for wages and salaries from the termination of employment totalled € 108 thousand in the year under review (previous year: € 1,806 thousand).
Current 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 € 19,814 thousand (previous year: € 20,701 thousand) and payments to the German pension insurance scheme. The short-time working hours implemented until 31 October of the reporting year resulted in a claim for reimbursement of employer's social security contributions from the German Federal Employment Agency. The reimbursements paid were recognized with effect on profi t and loss in expenses for social security contributions according to the equity method, and amounted to € 2,721 thousand (previous year: € 462 thousand).
The average number of employees changed over the fi nancial year as follows:
| 2010 | 2009 | |
|---|---|---|
| Fully consolidated companies | ||
| Employees receiving wages | 2,396 | 2,451 |
| Salaried staff | 1,983 | 2,034 |
| Trainees | 120 | 137 |
| 4,499 | 4,622 | |
| Proportionately consolidated companies | ||
| Employees receiving wages | 55 | 83 |
| Salaried staff | 144 | 129 |
| Trainees | 0 | 1 |
| 199 | 213 | |
| 4,698 | 4,835 |
The following table shows other operating expenses:
| in € thousand | 2010 | 2009 |
|---|---|---|
| Leasing | 41,342 | 39,992 |
| External maintenance services | 28,405 | 25,823 |
| Consultancy, services, insurance and auditing expenses |
24,783 | 25,624 |
| Travel expenses, advertising and promotional costs |
2,768 | 2,962 |
| External and internal cleaning costs | 2,630 | 2,566 |
| Other personnel expenses | 2,175 | 2,276 |
| Other taxes | 2,099 | 1,760 |
| Venture expenses | 1,968 | 1,864 |
| Expenses from exchange rate differences | 1,956 | 3,253 |
| Postage and telecommunications costs | 1,757 | 1,867 |
| Expenses from other accounting periods | 1,273 | 1,497 |
| Losses on the disposal of property, plant and equipment |
813 | 650 |
| Losses from deconsolidation | 0 | 2,997 |
| Other | 9,077 | 7,085 |
| 121,046 | 120,216 |
See Note 45 for further details of leasing expenses.
Depreciation and amortization in the fi nancial year was as follows:
| in € thousand | 2010 | 2009 |
|---|---|---|
| Intangible assets | 6,404 | 3,683 |
| Property, plant and equipment | 92,709 | 88,232 |
| Assets classifi ed as fi nance leases | 3,823 | 3,260 |
| Investment property | 11,044 | 10,377 |
| Non-current assets held for sale | 0 | 11,749 |
| 113,980 | 117,301 |
A classifi cation of the depreciation and amortization by asset category is shown in the fi xed asset movement schedule. Impairment losses totalling € 5,160 thousand (previous year: € 1,550 thousand) were recognized in the reporting year see Notes 22 and 24.
The fi nancial result in the reporting period was as follows:
| in € thousand | 2010 | 2009 |
|---|---|---|
| Earnings from associates accounted for using the equity method |
208 | 164 |
| Interest income from non-affi liated companies |
1,785 | 810 |
| Income from exchange rate effects | 1,396 | 908 |
| Interest income from bank balances | 1,173 | 2,924 |
| Income from interest rate hedges | 395 | 663 |
| Interest income from non-consolidated affi liated companies |
264 | 337 |
| Income from lending of fi nancial assets | 2 | 2 |
| Interest income | 5,015 | 5,644 |
| Interest portion of pension provisions | 15,652 | 16,949 |
| Interest expenses on bank borrowing | 11,146 | 12,820 |
| Interest portion of other provisions | 3,052 | 2,398 |
| Interest expenses from non-consolidated affi liated companies |
2,983 | 3,008 |
| Expenses from exchange rate differences | 2,181 | 654 |
| Interest expenses from non-affi liated companies |
1,965 | 1,832 |
| Expenses from interest rate hedges | 1,491 | 1,322 |
| Interest included in lease payments | 1,479 | 950 |
| Interest and similar expenses | 39,949 | 39,933 |
| Net interest | - 34,934 | - 34,289 |
| Income from other equity investments | 336 | 423 |
| Depreciations of fi nancial assets and non-current fi nancial receivables |
0 | 348 |
| Expenses from transfer of losses | 0 | 194 |
| Other fi nancial result | 336 | - 119 |
| Financial result | - 34,390 | - 34,244 |
CuxPort GmbH, Cuxhaven, which is accounted for using the equity method, was included on the basis of the annual fi nancial statements to 31 December 2010. By contrast, the previous year's fi gure is based on the interim fi nancial statements for the period to 30 September 2009. This was because the company's annual fi nancial statements were not available when the Consolidated Financial Statements for 2009 were being prepared.
The exchange rate differences which arose in 2010 mainly relate to SC HPC Ukraina, Odessa, Ukraine. Essentially, these were exchange rate effects arising from bank deposits.
In the 2010 fi nancial year, research and development costs of € 2,532 thousand (previous year: € 1,532 thousand) were recognized as an expense. These primarily related to software development.
Paid or outstanding taxes on income 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.
The main components of income tax expense for the 2010 and 2009 fi nancial years are as follows:
| in € thousand | 2010 | 2009 |
|---|---|---|
| Deferred and current income taxes | ||
| Deferred taxes on temporary differences | ||
| Domestic | - 2,285 | - 3,265 |
| Foreign | 124 | 405 |
| - 2,161 | - 2,860 | |
| Deferred taxes on losses carried forward |
||
| Domestic | 970 | 748 |
| Foreign | 169 | 0 |
| 1,139 | 748 | |
| - 1,022 | - 2,112 | |
| Current income tax expense | ||
| Domestic | 36,848 | 30,860 |
| Foreign | 8,762 | 8,120 |
| 45,610 | 38,980 | |
| Income tax expense recognized in the income statement |
44,588 | 36,868 |
Current income tax expenses include tax income from other accounting periods amounting to € 973 thousand (previous year: € 2,406 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 | |||
|---|---|---|---|---|
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| Intangible assets | 1,004 | 1,459 | 1,293 | 1,070 |
| Property, plant and equipment and fi nance leases | 5,602 | 4,534 | 15,812 | 13,943 |
| Investment property | 0 | 0 | 13,144 | 13,725 |
| Financial assets | 699 | 756 | 368 | 404 |
| Inventories | 0 | 18 | 82 | 143 |
| Receivables and other assets | 763 | 673 | 737 | 879 |
| Pension and other provisions | 41,372 | 38,966 | 797 | 1,506 |
| Liabilities | 872 | 1,379 | 99 | 82 |
| Tax losses carried forward | 1,889 | 750 | 0 | 0 |
| 52,201 | 48,535 | 32,332 | 31,752 | |
| Netted amounts | - 19,435 | - 18,723 | - 19,435 | - 18,723 |
| Balance sheet items | 32,766 | 29,812 | 12,897 | 13,029 |
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 for the 2010 and 2009 fi nancial years are as follows:
| in € thousand | 2010 2009 |
|
|---|---|---|
| Profi t before tax | 158,518 | 126,004 |
| Income tax expense at hypothetical income tax rate of 32.28 % (previous year: 32.28 %) |
51,170 | 40,674 |
| Adjustment in current income taxes for prior years |
- 973 | - 3,518 |
| Effect of tax rate changes | - 1,552 | 157 |
| Tax-free income | - 78 | - 137 |
| Non-deductible expenses | 312 | 3,119 |
| Trade tax additions and reductions | 973 | 1,059 |
| Differences in tax rates | - 4,737 | - 4,221 |
| Other tax effects | - 527 | - 265 |
| 44,588 | 36,868 |
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 realization. A tax rate of 32.28 % was used for the calculations in both 2009 and 2010. 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 effect of tax rate changes primarily includes the trade tax effects arising from the different application of taxation to select property management companies within the Group.
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 recognized on tax loss carry-forwards and temporary differences if it is suffi ciently certain that they can be realized in the near future. The Group has corporation tax loss carryforwards of € 5,765 thousand (previous year: € 4,735 thousand) and trade tax loss carry-forwards of € 5,866 thousand (previous year: € 5 thousand) which it can use without restriction. Corresponding deferred tax assets are carried as a result. No deferred tax assets were recognized for corporation tax loss carry-forwards of € 647 thousand (previous year: € 611 thousand) and trade tax loss carry-forwards of € 852 thousand (previous year: € 804 thousand). Under current legislation, the tax losses and interest can be carried forward in Germany without restriction.
Deferred tax assets of € 512 thousand (previous year: € 403 thousand) and deferred tax liabilities of € 16,138 thousand (previous year: € 18,169 thousand) recognized directly in equity without effect on profi t and loss come from actuarial gains and losses on pension provisions and cash fl ow hedges.
The income tax recognized in the statement of comprehensive income is made up as follows:
| in € thousand | 2010 | 2009 | ||||
|---|---|---|---|---|---|---|
| Gross | Taxes | Net | Gross | Taxes | Net | |
| Actuarial gains/losses | - 6,493 | 2,087 | - 4,406 | - 23,640 | 7,636 | - 16,004 |
| Cash fl ow hedges | - 220 | 56 | - 164 | - 800 | 153 | - 647 |
| Unrealized gains/losses on available-for-sale fi nancial assets |
18 | - 3 | 15 | 71 | - 23 | 48 |
| - 6,695 | 2,140 | - 4,555 | - 24,369 | 7,766 | - 16,603 |
Profi ts attributable to other shareholders amounting to € 37,703 thousand (previous year: € 36,090 thousand) mainly relate to minority shareholders of HHLA Container-Terminal Altenwerder GmbH, Hamburg, and METRANS a.s., Prague, Czech Republic.
The slight increase in minority interests is a result of the overall positive earnings trend.
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:
| 2010 | 2009 | |
|---|---|---|
| Share of consolidated net profi t attributable to shareholders of the parent company in € thousand |
76,227 | 53,046 |
| Number of common shares in circulation (weighted average) |
72,679,826 | 72,679,826 |
| Basic earnings per share in € | 1.05 | 0.73 |
The basic earnings per share were calculated for the subgroup Port Logistics as follows:
| 2010 | 2009 | |
|---|---|---|
| Share of consolidated net profi t attributable to shareholders of the parent company in € thousand |
69,890 | 46,705 |
| Number of common shares in circulation | ||
| (weighted average) | 69,975,326 | 69,975,326 |
| Basic earnings per share in € | 1.00 | 0.67 |
The basic earnings per share were calculated for the subgroup Real Estate as follows:
| 2010 | 2009 | |
|---|---|---|
| Share of consolidated net profi t attributable to shareholders of the parent company in € thousand |
6,337 | 6,341 |
| Number of common shares in circulation (weighted average) |
2,704,500 | 2,704,500 |
| Basic earnings per share in € | 2.34 | 2.34 |
The diluted earnings per share are identical to the basic EPS as there were no conversion or option rights in circulation during the fi nancial 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 16 June 2010 to distribute a dividend of € 30,695 thousand to holders of common shares for the 2009 fi nancial year. At the time of the distribution, the number of shares entitled to dividends amounted to 72,679,826, of which 69,975,326 are to be attributed to the subgroup Port Logistics (A division) and 2,704,500 to the subgroup Real Estate (S division). The resultant dividends are € 0.40 per Class A share and € 1.00 per Class S share. The remaining undistributed profi t was carried forward to new account.
In 2011, dividends of € 38,486 thousand are due to be paid to shareholders in the subgroup Port Logistics and a payout of € 3,245 thousand is to be made to the subgroup Real Estate's shareholders. This is equivalent to dividends per share of € 0.55 for the subgroup Port Logistics and € 1.20 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 on account |
Total |
|---|---|---|---|---|---|---|
| Carrying amount 1 January 2009 |
44,241 | 2,893 | 21,303 | 0 | 9,919 | 78,356 |
| Cost | ||||||
| 1 January 2009 | 47,564 | 33,635 | 21,378 | 1,399 | 9,919 | 113,895 |
| Additions | 4 | 1,465 | 3,806 | 2,249 | 7,524 | |
| Disposals | - 105 | - 5 | - 110 | |||
| Reclassifi cations | 2,268 | - 2,025 | 243 | |||
| Changes in group of consolidated companies |
- 20 | - 20 | ||||
| Exchange rate effects | - 84 | - 84 | ||||
| 31 December 2009 | 47,568 | 37,159 | 25,179 | 1,399 | 10,143 | 121,448 |
| Accumulated amortization and impairment losses |
||||||
| 1 January 2009 | 3,323 | 30,742 | 75 | 1,399 | 0 | 35,539 |
| Additions | 2,602 | 1,081 | 3,683 | |||
| Disposals | - 43 | - 43 | ||||
| Changes in group of consolidated companies |
- 20 | - 20 | ||||
| Exchange rate effects | - 45 | - 45 | ||||
| 31 December 2009 | 3,323 | 33,236 | 1,156 | 1,399 | 0 | 39,114 |
| Carrying amount | ||||||
| 31 December 2009 | 44,245 | 3,923 | 24,023 | 0 | 10,143 | 82,334 |
| Carrying amount 1 January 2010 |
44,245 | 3,923 | 24,023 | 0 | 10,143 | 82,334 |
| Cost | ||||||
| 1 January 2010 | 47,568 | 37,159 | 25,179 | 1,399 | 10,143 | 121,448 |
| Additions | 316 | 1,785 | 4,149 | 1,692 | 7,942 | |
| Disposals | - 1,430 | - 48 | - 1,478 | |||
| Reclassifi cations | 795 | - 795 | 0 | |||
| Exchange rate effects | 119 | 119 | ||||
| 31 December 2010 | 47,884 | 38,428 | 29,280 | 1,399 | 11,040 | 128,031 |
| Accumulated amortization and impairment losses |
||||||
| 1 January 2010 | 3,323 | 33,236 | 1,156 | 1,399 | 0 | 39,114 |
| Additions | 3,000 | 1,739 | 1,665 | 6,404 | ||
| Disposals | - 1,409 | - 1,409 | ||||
| Exchange rate effects | 72 | 72 | ||||
| 31 December 2010 | 6,323 | 33,638 | 2,821 | 1,399 | 0 | 44,181 |
| Carrying amount 31 December 2010 |
41,561 | 4,790 | 26,459 | 0 | 11,040 | 83,850 |
The carrying amounts for goodwill relate to the following HHLA segments:
| in € thousand | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Container (Rosshafen) | 30,929 | 30,929 |
| Container (HHCT) | 6,493 | 6,493 |
| Intermodal | 4,137 | 6,821 |
| Other | 2 | 2 |
| 41,561 | 44,245 |
The goodwill of € 30,929 thousand disclosed as of 31 December 2010 relates to the 100 % stake in HHLA Rosshafen Terminal GmbH, Hamburg, acquired by HHLA in 2006. The acquired company lets and manages buildings and sites in Hamburg's Rosshafen Terminal. At the same time, the company acquired various buildings and structural facilities located on the Rosshafen site in Hamburg. This goodwill is primarily derived from additional strategic options to expand the Group's handling activities at the sites let by the company.
In the Intermodal segment, the annual impairment test on goodwill for the cash-generating unit consisting of TFG Transfracht Internationale Gesellschaft für kombinierten Güterverkehr mbH & Co. KG, Frankfurt/Main, led to impairment requirements amounting to € 3,000 thousand. The goodwill attributed to this company was written down by this amount and the impairment loss was recognized through profi t and loss. The resulting expense item is shown under depreciation and amortization.
The impairment was necessary due to earnings forecasts being withdrawn. The value in use was calculated as the recoverable amount using a discount rate of 7.4 % (previous year: 8.4 %). The earnings forecast used for these calculations is based on the outlook for 2011 to 2015. However, the forecast result was reduced due to the current uncertainties. As of 2016, a continuation value with no growth factor is used. A rise of € 500 thousand in the earnings reduction would increase the impairment write-down by € 1,800 thousand. No impairment would be necessary if the forecast result was not reduced.
The fi rst-time consolidation of RAILTRANSPORT s.r.o., Prague, Czech Republic, generated goodwill of € 316 thousand in the Intermodal segment.
Of the internally developed software shown, € 17,763 thousand was not yet completed as of the balance sheet date (previous year: € 15,535 thousand).
Of the payments on account, € 10,620 thousand (previous year: € 8,075 thousand) relate to the development and expansion of software for management, scheduling and migration systems belonging to HHLA Container Terminal Burchardkai GmbH, Hamburg.
In the previous year, reclassifi cations totalling € 243 thousand related to software being taken out of the category of property, plant and equipment see Note 23.
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 plant under construction |
Total |
|---|---|---|---|---|---|
| Carrying amount 1 January 2009 | 273,641 | 287,904 | 164,688 | 146,752 | 872,985 |
| Cost | |||||
| 1 January 2009 | 514,794 | 598,437 | 321,962 | 146,772 | 1,581,965 |
| Additions | 58,327 | 9,353 | 26,598 | 55,348 | 149,626 |
| Disposals | - 6,565 | - 9,438 | - 10,501 | - 484 | - 26,988 |
| Reclassifi cations | 50,631 | 33,227 | 3,369 | - 87,836 | - 609 |
| Changes in group of consolidated companies |
7,762 | - 1,853 | - 37 | 5,872 | |
| Reclassifi cation on non-current assets held for sale |
- 13,445 | - 9,002 | - 47 | - 22,494 | |
| Exchange rate effects | - 330 | - 1,610 | - 51 | - 155 | - 2,146 |
| 31 December 2009 | 611,174 | 620,967 | 339,477 | 113,608 | 1,685,226 |
| Accumulated amortization and impairment losses |
|||||
| 1 January 2009 | 241,153 | 310,533 | 157,274 | 20 | 708,980 |
| Additions | 20,309 | 39,202 | 31,981 | 91,492 | |
| Disposals | - 4,404 | - 9,189 | - 10,823 | - 20 | - 24,436 |
| Changes in group of consolidated companies |
- 1,780 | - 1,780 | |||
| Reclassifi cation on non-current assets held for sale |
- 2,599 | - 2,916 | - 30 | - 5,545 | |
| Exchange rate effects | - 23 | - 203 | - 31 | - 257 | |
| 31 December 2009 | 254,436 | 337,427 | 176,591 | 0 | 768,454 |
| Carrying amount 31 December 2009 | 356,738 | 283,540 | 162,886 | 113,608 | 916,772 |
| Carrying amount 1 January 2010 | 356,738 | 283,540 | 162,886 | 113,608 | 916,772 |
| Cost | |||||
| 1 January 2010 | 611,174 | 620,967 | 339,477 | 113,608 | 1,685,226 |
| Additions | 86,738 | 55,907 | 5,766 | 10,526 | 158,937 |
| Disposals | - 6,811 | - 3,797 | - 9,021 | - 116 | - 19,745 |
| Reclassifi cations | 11,139 | 43,602 | - 193 | - 61,883 | - 7,335 |
| Changes in group of consolidated companies |
3 | 1,266 | 1,269 | ||
| Exchange rate effects | 1,273 | 2,336 | 79 | 64 | 3,752 |
| 31 December 2010 | 703,513 | 719,018 | 337,374 | 62,199 | 1,822,104 |
| Accumulated amortization and impairment losses |
|||||
| 1 January 2010 | 254,436 | 337,427 | 176,591 | 0 | 768,454 |
| Additions | 23,380 | 43,163 | 29,989 | 96,532 | |
| Disposals | - 4,685 | - 3,686 | - 8,670 | - 17,041 | |
| Reclassifi cations | - 5,165 | 1,331 | - 1,339 | - 5,173 | |
| Changes in group of consolidated companies |
3 | 197 | 200 | ||
| Exchange rate effects | 82 | 417 | 50 | 549 | |
| 31 December 2010 | 268,048 | 378,655 | 196,818 | 0 | 843,521 |
| Carrying amount 31 December 2010 | 435,465 | 340,363 | 140,556 | 62,199 | 978,583 |
The plant under construction portfolio recognized in the reporting year primarily relates to terminal expansions in the form of berth and storage area expansions and payments for container gantry cranes.
Reclassifi cations of carrying amounts totalling € 2,162 thousand pertain to changes in reporting as per IAS 40 and involved reclassifying assets to investment property. The properties were reclassifi ed due to the conversion of buildings see Note 24.
In the second quarter of 2010, METRANS a.s., Prague, Czech Republic, altered the useful lives of all the wagons in its balance sheet to a uniform 15 years, with retroactive effect as of 1 January 2010. For the 2010 fi nancial year, this reduces depreciation and amortization by € 1,958 thousand. The impairment differences balance themselves out over the remaining useful lives.
Buildings, surfacing and movable non-current assets with a carrying amount of € 46,841 thousand (previous year: € 80,231 thousand) were assigned by way of collateral in connection with loans taken up by the Group. The year-on-year change is the result of different loan conditions.
Furthermore, the property, plant and equipment is encumbered with land charges amounting to € 8,224 thousand (previous year: € 26,299 thousand). This fi gure is lower than in the previous year due to the effect of loan repayments.
Regarding existing restrictions on the disposal and use of buildings in connection with the letting of the associated properties by 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 € 44,220 thousand (previous year: € 47,833 thousand) from purchase commitments which were attributable to capitalization of property, plant and equipment.
In the year under review, HHLA received public subsidies worth € 951 thousand (previous year: € 7,208 thousand) in connection with the promotion of intermodal transport. Together with as-yet unused subsidies from prior years, this amount was offset against the cost of acquiring the relevant assets in 2010, resulting in a total of € 1,436 thousand (previous year: € 6,217 thousand).
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 1 January 2009 | 67 | 3,548 | 20,774 | 24,389 |
| Cost | ||||
| 1 January 2009 | 245 | 6,499 | 27,503 | 34,247 |
| Additions | 15 | 1,272 | 1,287 | |
| Disposals | - 8 | - 879 | - 887 | |
| Exchange rate effects | 33 | 33 | ||
| 31 December 2009 | 245 | 6,539 | 27,896 | 34,680 |
| Accumulated amortization and impairment losses |
||||
| 1 January 2009 | 178 | 2,951 | 6,728 | 9,857 |
| Additions | 24 | 562 | 2,674 | 3,260 |
| Disposals | - 5 | - 853 | - 858 | |
| Exchange rate effects | 27 | 27 | ||
| 31 December 2009 | 202 | 3,535 | 8,549 | 12,286 |
| Carrying amount 31 December 2009 | 43 | 3,004 | 19,347 | 22,394 |
| Carrying amount 1 January 2010 | 43 | 3,004 | 19,347 | 22,394 |
| Cost | ||||
| 1 January 2010 | 245 | 6,539 | 27,896 | 34,680 |
| Additions | 66,062 | 14 | 1,008 | 67,084 |
| Disposals | - 11 | - 1,105 | - 1,116 | |
| Reclassifi cations | - 1,967 | - 1,967 | ||
| Changes in group of consolidated companies | 1,219 | 1,219 | ||
| Exchange rate effects | 62 | 62 | ||
| 31 December 2010 | 66,307 | 6,604 | 27,051 | 99,962 |
| Accumulated amortization and impairment losses |
||||
| 1 January 2010 | 202 | 3,535 | 8,549 | 12,286 |
| Additions | 446 | 556 | 2,821 | 3,823 |
| Disposals | - 9 | - 1,029 | - 1,038 | |
| Reclassifi cations | - 1,426 | - 1,426 | ||
| Changes in group of consolidated companies | 180 | 180 | ||
| Exchange rate effects | 36 | 36 | ||
| 31 December 2010 | 648 | 4,118 | 9,095 | 13,861 |
| Carrying amount 31 December 2010 | 65,659 | 2,486 | 17,956 | 86,101 |
The additions to land and buildings in the reporting year relate entirely to two newly completed mega-ship berths at the Burchardkai and Tollerort container terminals in Hamburg, which HHLA has leased from a related party, Hamburg Port Authority AöR, Hamburg (HPA). Please refer to the information provided in Note 45.
The following table shows the changes in investment property:
| in € thousand | Investment property | Payments on account and plant under construction |
Total |
|---|---|---|---|
| Carrying amount 1 January 2009 | 193,715 | 0 | 193,715 |
| Cost | |||
| 1 January 2009 | 257,675 | 0 | 257,675 |
| Additions | 2,066 | 464 | 2,530 |
| Disposals | - 377 | - 377 | |
| Reclassifi cations | 56 | 310 | 366 |
| 31 December 2009 | 259,420 | 774 | 260,194 |
| Accumulated amortization and impairment losses | |||
| 1 January 2009 | 63,960 | 0 | 63,960 |
| Additions | 10,377 | 10,377 | |
| Disposals | - 330 | - 330 | |
| Reversal of impairment loss | - 284 | - 284 | |
| 31 December 2009 | 73,723 | 0 | 73,723 |
| Carrying amount 31 December 2009 | 185,697 | 774 | 186,471 |
| Carrying amount 1 January 2010 | 185,697 | 774 | 186,471 |
| Cost | |||
| 1 January 2010 | 259,420 | 774 | 260,194 |
| Additions | 722 | 6,237 | 6,959 |
| Disposals | 0 | ||
| Reclassifi cations | 7,335 | 7,335 | |
| 31 December 2010 | 267,477 | 7,011 | 274,488 |
| Accumulated amortization and impairment losses | |||
| 1 January 2010 | 73,723 | 0 | 73,723 |
| Additions | 11,044 | 11,044 | |
| Disposals | 0 | ||
| Reversal of impairment loss | - 1,020 | - 1,020 | |
| Reclassifi cations | 5,173 | 5,173 | |
| 31 December 2010 | 88,920 | 0 | 88,920 |
| Carrying amount 31 December 2010 | 178,557 | 7,011 | 185,568 |
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.
Rental income from investment properties at the end of the fi nancial year was € 46,459 thousand (previous year: € 47,353 thousand). The direct operating expenses for the investment properties amounted to € 21,868 thousand (previous year: € 19,458 thousand) in the reporting year.
Changed assumptions regarding lease payment fl ows led to a reversal of impairment loss requirement of € 1,020 thousand in 2010 (previous year: € 284 thousand), which is recorded in other operating income in the Container segment, as well as an unscheduled write-down amounting to € 2,160 thousand (previous year: € 1,550 thousand), which was also recorded in the Container segment, under depreciation of investment property.
The fair value of the investment properties totalled € 429,995 thousand (previous year: € 397,863 thousand). The fair values were determined by the Group's real estate department.
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 10 years, or up to the end of the useful lives of properties with a remaining useful life of less than 10 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 5.56 % to 8.84 % 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 by 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 € 94,454 thousand (previous year: € 90,379 thousand) relate to buildings in the Speicherstadt historical warehouse district. Payments made on account and plant under construction account for € 7,011 thousand of this (previous year: € 774 thousand). As these buildings are designated as historical landmarks, extensive refurbishment work must comply with the relevant statutory restrictions.
CuxPort GmbH, Cuxhaven, is recognized under shares in associated companies.
| in € thousand | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Shares in associated companies | 1,620 | 1,487 |
The following table shows the changes in fi nancial assets:
| in € thousand | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Securities | 2,707 | 4,800 |
| Shares in affi liated companies | 2,264 | 1,634 |
| Other equity investments | 341 | 257 |
| Other fi nancial assets | 2,972 | 1,371 |
| 8,284 | 8,062 |
In the previous year, securities primarily related to retroactive allo cations paid into the deposit facilities of the working lifetime accounts by HHLA (€ 1,606 thousand) and insolvency insurance for phased early retirement entitlements amounting to € 2,854 thousand. In the year under review, the fair value was written down by € 1 thousand (previous year: written up by € 49 thousand).
The retroactive allocations for the working lifetime accounts were made in the form of payments made by HHLA into the corresponding deposit facilities of the working lifetime accounts. These payments do not constitute plan assets as defi ned in IAS 19 because the employees have no entitlements derived from the payments. Consequently, they are shown under securities rather than being set off at present value.
In the reporting year, 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. As a result, the securities portfolio decreased by € 3,983 thousand Note 37.
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 amortized cost.
Other fi nancial assets essentially comprise receivables from a graduated rent amounting to € 734 thousand (previous year: € 541 thousand), receivables from HPA amounting to € 414 thousand (previous year: € 423 thousand) and receivables from METRANS (Danubia) Kft., Győr, Hungary, worth € 300 thousand.
Inventories are made up as follows:
| in € thousand | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Raw materials, consumables and supplies | 18,594 | 16,859 |
| Work in progress | 2,186 | 2,905 |
| Finished products and merchandise | 185 | 615 |
| 20,965 | 20,379 |
Impairment losses on inventories recognized as an expense amount to € 837 thousand (previous year: € 870 thousand). This expense is recorded under the cost of materials see Note 12.
| in € thousand | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Trade receivables | 126,516 | 121,731 |
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 in the year under review, while € 14,944 thousand was assigned in the previous year. Collateral for trade receivables is also 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 | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Receivables from the Free and Hanseatic City of Hamburg (FHH) |
128 | 350 |
| Receivables from the HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH |
0 | 4,203 |
| Receivables from related parties and joint ventures |
2,576 | 2,107 |
| 2,704 | 6,660 |
In the previous year, € 4,200 thousand of the receivables from HGV related to receivables from Group clearing, which pay standard market interest.
| in € thousand | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Current receivables from employees | 281 | 271 |
| Current reimbursement claims against insurers |
98 | 163 |
| Positive fair values of interest rate caps | 12 | 43 |
| Cash pool receivables | 1 | 1,448 |
| Other current fi nancial receivables | 2,215 | 431 |
| 2,607 | 2,356 |
In the reporting year, other current fi nancial receivables mainly include advance payments for investment plans which have not yet been carried out.
| in € thousand | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Current tax credits | 8,976 | 4,767 |
| Payments on account | 579 | 723 |
| Other | 5,654 | 6,802 |
| 15,209 | 12,292 |
In addition to income tax receivables, the current tax credits include transaction tax claims of € 3,137 thousand relating to a foreign joint venture.
The other assets shown are not subject to any signifi cant restrictions on title or use.
Income tax receivables result from offsettable taxes paid on investment income and advance tax payments.
| in € thousand | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Income tax receivables | 20,972 | 23,412 |
| in € thousand | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Short-term deposits | 99,114 | 68,232 |
| Bank balances and cash in hand | 136,379 | 105,299 |
| 235,493 | 173,531 |
Cash and cash equivalents are made up of cash in hand and various bank balances in different currencies. Cash of € 21,537 thousand (previous year: € 11,785 thousand) is subject to foreign exchange outfl ow restrictions.
As of 31 December 2010, the Group had unused lines of credit amounting to € 26,718 thousand (previous year: € 30,535 thousand) and had met all the conditions for their use.
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 six months, depending on the Group's cash requirements. They attract interest at rates payable for short-term deposits. In the fi nancial year, the interest rates were between 0.0 % and 1.6 % (previous year: 0.0 % and 5.2 %). The fair value of cash and cash equivalents is largely equivalent to their carrying amount.
In the previous year, land plots, buildings, container gantry cranes and railway sidings owned by the HHLA Intermodal segment amounting to € 5,200 thousand were included in this item. These were sold in two tranches in the year under review. In the course of this, the assets were written up to fair value by € 2,000 thousand in 2010. Both the total gain on disposal (€ 280 thousand) and the write-up are included in other operating income see see Note 11.
Changes in the individual components of equity for the 2010 and 2009 fi nancial years are shown in the statement 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 € 72,680 thousand, divided into 69,975,326 Class A shares and 2,704,500 Class S shares; each share represents € 1.00 of nominal capital.
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 69.65 % of the shares, including the 18.87 % of voting rights attributable directly to HHLA-Beteiligungsgesellschaft mbH, Hamburg.
According to the resolution passed at the General Meeting on 24 September 2007, and Section 3 (4) of the articles of association, the Executive Board is authorized, subject to the approval of the Supervisory Board, to increase the company's nominal capital by 1 September 2012, by issuing up to 33,797,750 new Class A shares for subscription in cash and/or in kind in one or more steps by up to € 33,797,750 (authorized 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. The remaining authorized capital I was reduced to € 33,742,924 as a result of the employee stock purchase plan implemented in 2008.
The Executive Board is authorized, 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 authorization 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 reacquired 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 authorized 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 authorized, with the consent of the Super visory Board, to specify the further details of the implementation of the capital increases out of authorized 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 authorized capital the Supervisory Board is authorized 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.
In accordance with the resolution passed at the General Meeting on 24 September 2007, and Section 3 (5) of the articles of associ ation, the Executive Board is also authorized, subject to the approval of the Supervisory Board, to increase the company's nominal capital until 1 September 2012, by issuing up to 1,352,250 new registered Class S shares (shares with no par value each representing € 1.00 of nominal capital) for contribution in cash and/or in kind in one or more steps by up to € 1,352,250 (authorized 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.
The Executive Board shall be authorized, with the consent of the Supervisory Board, to specify the further details of the implementation of the capital increases out of authorized 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 authorized to exclude fractional amounts of shares from the Class S shareholders' subscription rights. After each share increase from authorized capital the Supervisory Board is authorized to adjust the articles of association accordingly, in particular with regard to the amount of nominal capital and the number of Class S shares in existence.
The Annual General Meeting of HHLA held on 16 June 2010 additionally authorized 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 authorization 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 authorization expires on 15 December 2011.
HHLA does not currently hold any treasury shares. There are no plans to buy back shares.
Furthermore, 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 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 of the company's total nominal capital accounted for by Class A 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.
As of the reporting date, the HHLA Group had a capital reserve of € 139,728 thousand, as in the previous year.
Retained earnings include net profi ts from prior years for com panies included in the Consolidated Financial 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 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.
Minority interests in equity comprise outside interests in the Group companies' consolidated equity and totalled € - 12,257 thousand as of the end of 2010 fi nancial year (previous year: € 102,225 thousand).
On 7 September 2010, 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 to the minority shareholder of the above-mentioned companies for the duration of the agreement. This settlement is primarily based on future earnings.
As a result of the profi t and loss transfer agreement, the interest held by the minority shareholder is classifi ed as a compound fi nancial instrument as per IAS 39.28, because it contains both debt and equity components. These components must be split and entered as either equity or borrowed capital depending on their classifi cation. The fair value of the equity component is calculated by deducting the fair value of the debt capital component from the fair value of the whole instrument.
The fair value of the liability component in the form of these fi nancial settlements corresponds to the contractually agreed future payments during the term of the profi t and loss transfer agreement.
In accordance with IAS 32, the minority shareholder's future estimated entitlements to fi nancial settlements are recognized as other fi nancial liabilities for the periods from 2010 to 2014, although the agreement states that the variable entitlement to a settlement only arises once the annual fi nancial statements are approved.
The future fi nancial settlements have been discounted at a rate of 4.5 %.
The estimated share of profi ts attributable to the minority shareholder for the fi nancial years between 2010 and 2014 (€ 121,543 thousand) was reclassifi ed from minority interests in equity to other fi nancial liabilities. This resulted in negative minority interests of € 12,257 thousand.
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 key indicator in this regard.
The key value-oriented management factor 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 | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Equity | 567,002 | 636,985 |
| Total assets | 1,715,137 | 1,590,499 |
| Equity ratio | 33 % | 40 % |
The equity ratio fell compared to the previous year. The changes shown are primarily attributable to the profi t and loss transfer agreement concluded in September 2010. For further details, please refer to the section on Minority interests in equity.
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 € 688,545 thousand and an equity ratio of 40 % 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 and their 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.
BRTV is a total benefi t plan. HHLA guarantees the participating employees a certain amount of benefi ts, which is 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 years of service. The amount of the company pension 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 dependents' pensions. External actu aries calculate the amount of the obligation using the projected unit credit method.
Shown below are the amounts recognized for benefi t commitments in the reporting year and the previous four years:
| in € thousand | 31.12.2010 | 31.12.2009 | 31.12.2008 | 31.12.2007 | 31.12.2006 |
|---|---|---|---|---|---|
| Present value of pension commitments | 329,221 | 323,824 | 299,862 | 311,873 | 377,077 |
| Obligations from working lifetime accounts | 1,913 | 1,317 | 802 | 482 | 289 |
| 331,134 | 325,141 | 300,664 | 312,355 | 377,366 |
The following tables show the expense components recognized in the income statement for the defi ned benefi t obligations and the amounts carried in the balance sheet for the individual pension plans. The present value of pension commitments is made up as follows:
| in € thousand | 2010 | 2009 |
|---|---|---|
| Present value of pension obligations as of 01.01. |
323,824 | 299,862 |
| Current service expense (recognized in income statement) |
3,449 | 3,321 |
| Interest expenses (recognized in income statement) |
15,383 | 16,787 |
| Pension payments | - 19,850 | - 19,758 |
| Actuarial gains (-) and losses (+) | 6,415 | 23,612 |
| Present value of pension obligations as of 31.12. |
329,221 | 323,824 |
The balance sheet shows the full present value of pension obligations including actuarial gains and losses.
The liabilities disclosed in the balance sheet have developed as follows:
| in € thousand | 2010 | 2009 |
|---|---|---|
| Balance sheet amounts as of 01.01. | 323,824 | 299,862 |
| Expense recognized in the income statement |
18,832 | 20,108 |
| Pension payments | - 19,850 | - 19,758 |
| Actuarial gains (-) and losses (+) | 6,415 | 23,612 |
| Balance sheet amounts as of 31.12. | 329,221 | 323,824 |
The gains and losses offset in equity developed as follows:
| in € thousand | 2010 | 2009 |
|---|---|---|
| Actuarial gains as of 01.01. | 56,253 | 79,865 |
| Change in fi nancial year | - 6,415 | - 23,612 |
| Actuarial gains as of 31.12. | 49,838 | 56,253 |
The following actuarial assumptions are used to determine pension provisions:
| in % | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Discount rate | 4.50 | 4.75 |
| 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 | 1.30 |
The biometric data is drawn from the 2005 G actuarial tables by Prof. Dr. Klaus Heubeck.
The discount rate (4.50 %) results from the current yield for industry obligations in December 2010 less a reduction for higher credit standings.
If an alternative discount rate were applied, the present value of the pension obligations would be as follows:
| in € thousand | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Alternative discount rate in % | 4.75 | 5.10 |
| Present value of pension obligation | 319,144 | 309,647 |
In the 2010 fi nancial year, HHLA made pension payments for plans totalling € 19,850 thousand. HHLA anticipates the following payments for pension plans over the next fi ve years:
| Years | in € thousand |
|---|---|
| 2011 | 20,226 |
| 2012 | 20,342 |
| 2013 | 20,290 |
| 2014 | 20,502 |
| 2015 | 20,647 |
| 102,007 |
In 2006, the Group companies in Germany undertook to set up working lifetime accounts due to collective bargaining 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 bargaining 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 benefit commitments changed as follows during the reporting year and the previous four years: The present value of the obligations developed as follows:
| in € thousand | 2010 | 2009 |
|---|---|---|
| Present value of the obligations as of 01.01. |
5,029 | 2,635 |
| Current service expense | 2,135 | 1,942 |
| Service expense for prior years | 672 | 0 |
| Interest expenses (recognized in income statement) |
269 | 161 |
| Actuarial losses | 233 | 77 |
| Capital payments | - 52 | - 41 |
| Other | 39 | 255 |
| Present value of the obligations as of 31.12. |
8,325 | 5,029 |
The present value of the plan assets developed as follows:
| in € thousand | 2010 | 2009 |
|---|---|---|
| Present value of the plan assets as of 01.01. |
3,712 | 1,833 |
| Expected income from the plan assets | 246 | 157 |
| Inpayment | 1,639 | 1,459 |
| Actuarial losses | 155 | 49 |
| Capital payments | - 51 | - 41 |
| Retroactive allocations | 672 | 0 |
| Other | 39 | 255 |
| Present value of the plan assets as of 31.12. |
6,412 | 3,712 |
The plan assets consist solely of shares in money market and investment funds. The expected return on the plan assets is 4.50 % (previous year: 4.75 %). Losses of € 5 thousand were recorded on the plan assets in the fi nancial year (previous year: gains of € 177 thousand).
The following actuarial assumptions are used to determine provisions for working lifetime accounts:
| in % | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Discount rate | 4.50 | 4.75 |
| Forecast increase in pay | 3.00 | 3.00 |
| in € thousand | 31.12.2010 | 31.12.2009 | 31.12.2008 | 31.12.2007 | 31.12.2006 |
|---|---|---|---|---|---|
| Present value of obligations | 8,325 | 5,029 | 2,635 | 1,894 | 850 |
| Present value of plan assets (fund shares) |
- 6,412 | - 3,712 | - 1,833 | - 1,412 | - 561 |
| Uncovered allocations | 1,913 | 1,317 | 802 | 482 | 289 |
With the exception of the covered part of the service expenses for plan assets, the following amounts were recognized in the income statement:
| in € thousand | 2010 | 2009 |
|---|---|---|
| Current service expense including salary conversion (including salary conversion) |
2,135 | 1,942 |
| thereof gathered at costs as uncovered part |
496 | 483 |
| thereof gathered at plan assets as covered part |
1,639 | 1,459 |
| Interest expenses | 269 | 161 |
| Expected income from the plan assets | - 246 | - 157 |
| Benefi ts paid | 1 | 0 |
| 2,159 | 1,946 |
The gains and losses offset in equity developed as follows:
| in € thousand | 2010 | 2009 |
|---|---|---|
| Actuarial losses as of 01.01. | 38 | 10 |
| Changes in the fi nancial year | 78 | 28 |
| Actuarial losses as of 31.12. | 116 | 38 |
In the 2010 fi nancial year, HHLA made payments for plans totalling € 52 thousand. In return, the company acquired corresponding securities holdings worth € 51 thousand. The outfl ow of funds therefore totalled € 1 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 |
|---|---|
| 2011 | 22 |
| 2012 | 17 |
| 2013 | 26 |
| 2014 | 40 |
| 2015 | 47 |
| 152 |
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 € 238 thousand in the reporting year (previous year: € 372 thousand).
HHLA paid € 19,814 thousand (previous year: € 20,701 thousand) into the state pension system as its employer's contribution.
The following table shows signifi cant other non-current and current provisions during the 2010 and 2009 fi nancial years:
| in € thousand | 31.12.2010 | 31.12.2009 | ||||
|---|---|---|---|---|---|---|
| Total | Thereof current |
Thereof non-current |
Total | Thereof current |
Thereof non-current |
|
| Demolition obligations | 39,107 | 0 | 39,107 | 34,018 | 0 | 34,018 |
| Phased early retirement | 11,669 | 3,950 | 7,719 | 21,304 | 5,497 | 15,807 |
| Bonuses and single payments | 6,709 | 6,709 | 0 | 5,943 | 5,943 | 0 |
| Expected increases in rents | 6,634 | 6,634 | 0 | 2,830 | 2,830 | 0 |
| Insurance excesses | 2,594 | 2,594 | 0 | 1,539 | 1,539 | 0 |
| Anniversaries | 2,247 | 0 | 2,247 | 2,350 | 0 | 2,350 |
| Legal fees and litigation expenses | 1,070 | 0 | 1,070 | 1,308 | 0 | 1,308 |
| Other | 4,431 | 2,009 | 2,422 | 5,654 | 3,045 | 2,609 |
| 74,461 | 21,896 | 52,565 | 74,946 | 18,854 | 56,092 |
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. 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, the expected price increase used to calculate the provisions shown was raised from 1.5 % to 2.0 %. This rate is derived from the German construction cost index. An addition of € 6,228 thousand was therefore made to the provisions for demolition costs and recognized in equity. This led to a corresponding increase in non-current assets and will therefore mean higher future write-downs. In addition, the adjustment to the provision will prompt additional interest expenses of € 13,332 thousand in the future.
Additional demolition obligations for areas let by the Container segment also prompted the amount of provisions to increase.
The cash outfl ow of these provisions is expected in the period 2025–2036.
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. In addition to current phased early retirement contracts, provisions were also made for all employees who have applied for phased early retirement and for employees offered phased early retirement who will fulfi l the requirements in the future. In the past, phased early retirement was based on the collective labour agreement regarding phased early retirement dated 1 July 2001, which stipulated that a maximum of 5 % of the workforce would be entitled to make use of phased early retirement. The collective labour agreement regarding phased early retirement dated 4 August 2009 repealed this 5 % limit. This agreement also rescinded the entitlement to phased early retirement for those who have not yet signed the relevant contracts.
The number of employees expected to sign contracts for the phased early retirement scheme which was used for the formation of provisions in 2009 was adjusted in 2010. Fewer employees than expected took up the offer of phased early retirement.
For this reason, the reversal of provisions resulted in income of € 6,241 thousand in the reporting year. This is recorded in other operating income see Note 11.
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. As a result, the corresponding fi gure of € 3,983 thousand reduces the provisions reported. The amount of the provision was determined using an interest rate of 4.5 % p.a. (previous year: 4.75 % p.a.).
Provisions for expected increases in rents relate to expected but as-yet uninvoiced increases in rents for leased port areas and quay walls, primarily in Hamburg. The provisions are formed based on the corresponding lease agreements.
In 2010, the lease of a newly completed quay wall at the Container Terminal Burchardkai prompted an appropriation of € 1,700 thousand. The total amount transferred also covers anticipated increases in rents for areas and quay walls which are already leased.
This takes into account risks from potential cases of damage or loss which go beyond the existing insurance cover. As of 31 December 2010, the risks thus recognized amounted to € 2,594 thousand.
The provisions for anniversaries relate to Group employees' contractual entitlement to anniversary gratuities. The amount recognized is determined by an actuarial opinion. A discount rate of 4.5 % p.a. (previous year: 4.75 % p.a.) was used for the calculation.
Other provisions include € 1,169 thousand (previous year: € 995 thousand) of provisions for staff overtime. This denotes time off to which the relevant employees are entitled but have not made use of in a period of one to fi ve years. Furthermore, the other provisions include € 284 thousand for guarantees (previous year: € 617 thousand), € 333 thousand (previous year: € 318 thousand) for benefi ts to retired and former employees, and other miscellaneous provisions of € 2,645 thousand (previous year: € 3,724 thousand).
As of the balance sheet date, there are no legal disputes which could have a substantial effect on the Group's fi nancial position.
There was no need for HHLA to form provisions for environmental protection measures.
The following provisions schedule shows changes in other noncurrent and current provisions:
| in € thousand | 01.01.2010 | Additions | Accrued interest |
Used | Reversed | 31.12.2010 |
|---|---|---|---|---|---|---|
| Demolition obligations | 34,018 | 7,434 | 1,954 | 66 | 4,233 | 39,107 |
| Phased early retirement | 21,304 | 3,225 | 992 | 7,611 | 6,241 | 11,669 |
| Bonuses and single payments | 5,943 | 6,709 | 0 | 5,472 | 471 | 6,709 |
| Expected increases in rents | 2,830 | 4,296 | 0 | 132 | 360 | 6,634 |
| Insurance excesses | 1,539 | 1,900 | 0 | 678 | 167 | 2,594 |
| Anniversaries | 2,350 | 26 | 106 | 228 | 7 | 2,247 |
| Legal fees and litigation expenses | 1,308 | 4 | 0 | 234 | 8 | 1,070 |
| Other | 5,654 | 4,107 | 0 | 4,767 | 563 | 4,431 |
| 74,946 | 27,701 | 3,052 | 19,188 | 12,050 | 74,461 |
The following table gives the details of non-current and current fi nancial liabilities:
| in € thousand | ||||
|---|---|---|---|---|
| Total | Up to 1 year | 1 to 5 years | Over 5 years | |
| Liabilities from bank loans | 298,903 | 30,641 | 173,885 | 94,377 |
| Finance lease liabilities | 15,280 | 3,859 | 10,981 | 440 |
| Liabilities towards employees | 11,893 | 11,893 | 0 | 0 |
| Negative fair values of exchange and interest rate hedges | 2,743 | 1,668 | 0 | 1,075 |
| Other loans | 1,915 | 811 | 1,104 | 0 |
| Other fi nancial liabilities | 148,014 | 42,264 | 104,943 | 807 |
| of which settlement to minority shareholders | 121,543 | 23,969 | 97,574 | 0 |
| 478,748 | 91,136 | 290,913 | 96,699 |
| in € thousand | 31.12.2009 | |||
|---|---|---|---|---|
| Total | Up to 1 year | 1 to 5 years | Over 5 years | |
| Liabilities from bank loans | 329,985 | 33,055 | 146,680 | 150,250 |
| Finance lease liabilities | 17,365 | 3,755 | 12,671 | 939 |
| Liabilities towards employees | 9,897 | 9,897 | 0 | 0 |
| Negative fair values of exchange and interest rate hedges | 3,064 | 1,535 | 1,529 | 0 |
| Other loans | 1,341 | 0 | 1,341 | 0 |
| Other fi nancial liabilities | 20,788 | 17,835 | 1,934 | 1,019 |
| 382,440 | 66,077 | 164,155 | 152,208 |
Bank loans include interest of € 3,343 thousand (previous year: € 3,697 thousand) accrued up to the balance sheet date, bank overdraft facilities totalling € 401 thousand (previous year: € 23 thousand) and other fees of € 10 thousand (previous year: € 0 thousand).
The liabilities from fi nance leases amounting to € 15,280 thousand (previous year: € 17,365 thousand) represent the discounted value of future payments relating to fi nance leases. These liabilities pertain to fi nance leases for movable non-current assets.
Buildings, surfacing and movable items of non-current assets carried at € 46,841 thousand (previous year: € 80,231 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 year-on-year change is the result of different loan conditions.
The liabilities towards employees consist primarily of wages, salaries and holiday entitlement.
The other fi nancial liabilities include, in particular, reimbursements for customers and liabilities to shareholders outside the Group. In the year under review, 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 abovementioned companies' minority shareholder for the duration of the agreement. This fi nancial settlement amounts to € 23,969 thousand for the relevant share of profi ts in the reporting year and € 97,574 thousand for estimated shares of profi ts in future fi nancial years. This obligation is recognized under other fi nancial liabilities. Please refer to Note 35 for more information on minority interests in equity.
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 | 31.12.2010 | 31.12.2009 | ||
|---|---|---|---|---|
| Carrying amount |
Fair value | Carrying amount |
Fair value | |
| Fixed interest bearing loans |
162,619 | 163,738 | 178,654 | 182,202 |
Interest rates of 2.4 % to 4.0 % p.a. (previous year: 2.3 % to 4.6 % 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 3.2 % 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.
As a result of borrowing, individual affi liates have covenants linked to key balance sheet fi gures. Violating these covenants would author ize 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 € 81,076 thousand (previous year: € 94,566 thousand). The covenants were met at all agreed audit points throughout the reporting year.
| Interest condition | Interest rate | Remaining fi xed interest period |
Currency | Nominal value | Carrying amount as of 31.12.2010 in € thousand |
|---|---|---|---|---|---|
| fi xed | 2.76 % | 2020 | € | 16,873 | 13,498 |
| fi xed | 3.66 % | 2019 | € | 20,000 | 20,000 |
| fi xed | 3.79 – 3.84 % | 2018 | € | 7,811 | 3,446 |
| fi xed | 5.67 % | 2017 | € | 3,579 | 1,253 |
| fi xed | 5.61 % | 2016 | € | 30,000 | 18,000 |
| fi xed | 2.88 – 4.23 % | 2015 | € | 32,669 | 30,675 |
| fi xed | 5.15 – 5.47 % | 2012 | € | 78,000 | 47,776 |
| fi xed | 4.60 – 5.03 % | 2011 | € | 49,257 | 27,971 |
| fl oating | fl oating + margin | 2011 | € | 139,644 | 128,753 |
| fl oating | fl oating + margin | 2011 | CZK | 113,900 | 3,777 |
| 295,149 |
The bank loans become due throughout the next 5 years and beyond as follows:
Up to 1 year 26,887 1 year to 2 years 26,127 2 years to 3 years 71,961 3 years to 4 years 26,258 4 years to 5 years 49,539 Over 5 years 94,377
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.
| in € thousand | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Trade liabilities | 77,026 | 54,616 |
Liabilities to related parties are made up as follows:
| in € thousand | 31.12.2010 | |||
|---|---|---|---|---|
| Total | Up to 1 year | 1 to 5 years | Over 5 years | |
| Liabilities to HGV | 65,855 | 65,855 | 0 | 0 |
| Liabilities to HPA (fi nance leases) | 65,799 | 52 | 353 | 65,394 |
| Other liabilities to related parties | 2,079 | 2,079 | 0 | 0 |
| 133,733 | 67,986 | 353 | 65,394 |
in € thousand
295,149
| in € thousand | 31.12.2009 | ||||
|---|---|---|---|---|---|
| Total | Up to 1 year | 1 to 5 years | Over 5 years | ||
| Liabilities to HGV | 65,476 | 65,476 | 0 | 0 | |
| Other liabilities to related parties | 853 | 853 | 0 | 0 | |
| 66,329 | 66,329 | 0 | 0 |
Liabilities to HGV of € 65,855 thousand (previous year: € 65,476 thousand) relate to a loan which attracts standard market interest along with the corresponding interest portion pertaining to the Real Estate subgroup.
The liabilities to HPA involve leased mega-ship berths at both Container Terminal Burchardkai and Container Terminal Tollerort in Hamburg. The amount recognized in the balance sheet is equivalent to the present value of the liabilities and is based on a lease term up to and including 2059 and 2060.
Other liabilities are made up as follows:
| in € thousand | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Government grants | 10,588 | 11,216 |
| Tax liabilities | 8,209 | 6,119 |
| Employer's accident liability insurance | 3,689 | 3,105 |
| Custom duties | 3,553 | 4,718 |
| Port funds | 1,857 | 1,039 |
| Social security liabilities | 1,458 | 433 |
| Payments received on account | 1,321 | 2,414 |
| Other debts | 3,902 | 4,552 |
| 34,577 | 33,596 |
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.
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 € 27,317 thousand which were paid to HHLA in the period between 2001 and 2010. These subsidies have therefore already been deducted from the cost of purchasing the subsidized investments. The conditions for the subsidies include obligations to operate the subsidized equipment for a retention period of 5 to 20 years, observe certain operating criteria and provide the subsidizing body with evidence for the use of the funds.
The HHLA Group received public subsidies totalling € 1,051 thousand (previous year: € 7,353 thousand) in the reporting year.
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 | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Income tax liabilities | 5,559 | 3,417 |
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 six months, receivables and/or liabilities due from HGV and receivables and/or liabilities from cash pooling. They are recognized at nominal value. Currency translation 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 non-cash items. Cash items such as interest and income taxes are also taken into account. At € 206,949 thousand, the cash infl ow from operating activities was higher than the previous year's € 193,213 thousand. This was primarily due to an increase in EBIT, which came in at € 192,908 thousand compared to € 160,248 thousand in the previous year.
The outfl ow of resources due to investing activities is calculated on a cash basis. It largely consists of the cash outfl ow from investments in non-current assets. 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 € 56,261 thousand (previous year: € 157,317 thousand). The lower cash outfl ow from investing activities than in the previous year was primarily due to projects being extended over longer periods of time and thus being pursued less intensively in the Container and Intermodal segments, as well as non-cash investments being carried out.
Non-cash investments totalling € 109,075 thousand (previous year: € 707 thousand) mainly relate to newly leased quay walls from fi nance leases and container gantry cranes which recently became operational at the Burchardkai and Tollerort container terminals. In the previous year, the non-cash investments pertained to capitalized borrowing costs for a refrigerated warehouse that was completed in 2009.
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. The free cash fl ow developed positively year on year as the cash fl ow from operating activities rose and the cash fl ow from investing activities fell. It improved from € 35,896 thousand to € 150,688 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 € 61,264 thousand were used for dividend payments to shareholders and minority shareholders. This was € 54,035 thousand less than in the previous year, when a total of € 115,299 thousand was paid out. Funds were also used to repay (lease) liabilities. Unlike in the previous year, there was no cash infl ow from the uptake of bank loans in 2010. The Group borrowed cash resources of € 64,193 thousand in 2009. This resulted in a cash outfl ow from fi nancing activities of € 88,590 thousand in the previous year, while the cash outfl ow totalled € 95,168 thousand in the reporting 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 the previous year, the receivables from HGV related to overnight deposits available on demand. HHLA posted a liability for the year under review.
| in € thousand | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Short-term deposits | 99,114 | 68,232 |
| Cash in hand and bank balances | 136,379 | 105,299 |
| Cash and cash equivalents | 235,493 | 173,531 |
| Receivables HGV | 0 | 4,200 |
| Liabilities HGV | - 600 | 0 |
| Receivables cash pool | 1 | 1,448 |
| Liabilities cash pool | - 811 | 0 |
| Bank overdraft facilities | - 401 | - 23 |
| Financial funds at the end of the period | 233,682 | 179,156 |
Since 1 January 2009, the HHLA Group's segment report has been 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 success in each segment and therefore aids the internal control function. In the second quarter of 2009, internal reporting was extended to include EBIT from continuing activities. This excludes the result of noncurrent assets held for sale. In 2010, this concerns the result of CTL Container Terminal Lübeck GmbH, Lübeck (CTL). In the previous year, it included the results of combisped Hanseatische Spedition GmbH, Lübeck (combisped), and CTL, the impairment charges included therein and the result of deconsolidating combisped.
The accounting and valuation principles applied for internal reporting comply with the principles applied by the HHLA Group described in Note 6 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 organized and managed autonomously in accordance with the type of services being offered.
The HHLA Group operates in the following four segments:
This segment encompasses services relating to containers and ship handling. With its high-performance container terminals, HHLA maintains the Port of Hamburg's outstanding importance as a logistics hub for general cargo traffi c.
The companies allocated to HHLA's Intermodal segment provide a comprehensive transport network encompassing rail, road and sea which links the German seaports with their hinterland in Europe.
This segment combines a wide range of services – including special handling, contract logistics and advisory services – which go to make up Hamburg's diversity as an all-purpose port.
HHLA's Real Estate segment owns properties in and around the Port of Hamburg which are not used specifi cally for port handling. 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, the maintenance of handling equipment, 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 from continuing activities with consolidated earnings before taxes (EBT) incorporates the result of CTL (€ 2,175 thousand). It also incorporates transactions between the segments and the subgroups for which consolidation is mandatory, as well as the proportion of companies accounted for using the equity method, net interest income and other fi nancial result.
| in € thousand | 2010 | 2009 |
|---|---|---|
| Total segment earnings (EBIT from continuing activities) |
188,104 | 174,617 |
| EBIT incl. impairment and deconsolidation loss of non-current assets held for sale |
2,175 | - 17,488 |
| Total segment earnings (EBIT) | 190,279 | 157,129 |
| Elimination of business relations between segments and subgroups |
2,629 | 3,119 |
| Group | 192,908 | 160,248 |
| Earnings from associates accounted for using the equity method |
208 | 164 |
| Net interest | - 34,934 | - 34,289 |
| Other fi nancial result | 336 | - 119 |
| Earnings before tax (EBT) | 158,518 | 126,004 |
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 | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Total segment assets | 1,635,565 | 1,537,114 |
| Elimination of business relations between segments and subgroups |
- 631,782 | - 572,076 |
| Current assets before consolidation | 417,481 | 394,982 |
| Financial assets | 4,642 | 3,724 |
| Deferred tax | 32,766 | 29,812 |
| Income tax receivables | 20,972 | 23,412 |
| Cash and cash equivalents | 235,493 | 173,531 |
| Group assets | 1,715,137 | 1,590,499 |
The reconciliation with Group investments totalling € 85 thousand (previous year: € - 1,165 thousand) contains the elimination of internal invoices for inter-segmental services relating to the generation of intangible assets and property, plant and equipment.
In relation to the reconciliation of amortization and depreciation amounting to € - 2,149 thousand (previous year: € - 2,764 thousand), the entire amount is attributable to the elimination of inter-company profi ts between the segments and the subgroups.
The reconciliation of non-cash items amounting to € 206 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 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
| Segment revenues | 846,704 805,054 175,296 140,018 | 51,122 | 45,671 1,073,122 | 990,743 | 0 | 0 1,073,122 | 990,743 | |||||
| Non-current segment assets |
1,039,859 985,314 182,615 176,004 | 31,089 | 30,255 1,253,563 1,191,573 461,574 398,926 1,715,137 1,590,499 | |||||||||
| Investment in non current segment assets |
152,017 119,448 | 20,116 | 35,560 | 1,706 | 4,672 | 173,839 | 159,680 | 0 | 0 | 173,839 | 159,680 |
For the information by region, the revenue and disclosures on segment assets are segmented in accordance with the affi liates' respective locations. Due to the disproportionately high costs involved, the required segmentation of revenue broken down by the place where clients have their registered offi ce is not possible. 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 2010, HHLA signed a lease for two newly completed quay walls with a related party, HPA. The company plans to lease these assets until the end of 2036. Once the planned term has come to an end, HHLA has the option of renewing the agreement until 2059 or 2060. Based on its business model, HHLA will make use of this option. There is no purchase option. As the leases are classifi ed as fi nance lease obligations according to IAS 17, minimum lease payments, including anticipated increases in rent payment rates, totalling € 168,441 thousand must be taken into account.
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 | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Within one year | 7,523 | 4,566 |
| Between one and fi ve years | 22,061 | 13,759 |
| Over fi ve years | 155,600 | 922 |
| Total minimum lease payments | 185,184 | 19,247 |
| Within one year | 3,911 | 3,755 |
| Between one and fi ve years | 11,334 | 12,671 |
| Over fi ve years | 65,834 | 939 |
| Present value of minimum lease | ||
| payments | 81,079 | 17,365 |
| Interest expenses from discounting | 104,105 | 1,882 |
Contracts exist between the Free and Hanseatic City of Hamburg and/or the 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 run until 2025–2037. 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.
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 | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Within one year | 37,373 | 28,982 |
| Between one and fi ve years | 127,883 | 104,519 |
| Over fi ve years | 901,010 | 728,422 |
| 1,066,266 | 861,923 |
In the fi nancial year, expenses of € 41,342 thousand (previous year: € 39,992 thousand) were incurred for leases, of which € 1,622 thousand (previous year: € 1,376 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 17 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 at the balance sheet date:
| in € thousand | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Within one year | 25,398 | 31,321 |
| Between one and fi ve years | 67,045 | 64,575 |
| Over fi ve years | 44,591 | 32,406 |
| 137,034 | 128,302 |
In the fi nancial year, income of € 49,842 thousand (previous year: € 51,007 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 utilized:
| in € thousand | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Guarantees | 3,599 | 3,715 |
| Comfort letters | 1,850 | 1,850 |
| 5,449 | 5,565 |
Of these guarantees, proportionately consolidated joint ventures account for € 365 thousand (previous year: € 401 thousand) while € 412 thousand (previous year: € 492 thousand) is attributable to associates accounted for using the equity method.
The nominal values of other fi nancial obligations are made up as follows as of the balance sheet date:
| in € thousand | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Outstanding purchase commitments | 51,112 | 50,762 |
| Obligations arising from bills of exchange | 6,968 | 8,777 |
| Miscellaneous other obligations | 1,087,004 | 1,343,122 |
| 1,145,084 | 1,402,661 |
Of the obligations from outstanding purchase commitments, € 44,220 thousand (previous year: € 47,833 thousand) is attributable to capitalization of property, plant and equipment.
Of miscellaneous other obligations, proportionately consolidated joint ventures account for € 65,854 thousand (previous year: € 3,066 thousand). Please refer to Note 45 for details of the obligations from operating leases included here and listed separately.
To fi nance its business activities, the Group uses short, medium and long-term bank loans, fi nance leases and hire-purchase agree ments, 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 fi rst-class 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 approx. 75 % (previous year: 77 %) of the Group's borrowing was at fi xed interest rates, including an amount of € 59,192 thousand (previous year: € 71,933 thousand) covered by interest rate swaps. Interest rate caps were also in place for a further € 8,236 thousand (previous year: € 9,648 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 31 December 2010, interest expenses arising from fl oatingrate loans would have been € 663 thousand p. a. higher, interest income from overnight deposits and time deposit investments would have been € 1,177 thousand p. a. higher, and income from interest rate hedges would have been € 296 thousand p.a. higher. The fair value of the interest rate hedges would rise by € 784 thousand. Of this, € 523 thousand would be recorded directly in equity and € 261 thousand would be recognized in the income statement, whose result would increase by a total of € 1,071 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.
The Group did not hold any currency futures contracts, either on the balance sheet date or as of 31 December 2009.
Revenue in the HHLA Group is predominantly invoiced in euros or in the national currencies of the European Group companies. Investments in these countries are largely transacted in euros. There is currently no signifi cant foreign currency risk from the functional currency.
HPC Ukraina's revenue is denominated in Ukrainian hryvnia (UAH) and US dollars.
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 in the year under review or on 31 December 2009.
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 recognized, 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 had loan loss insurance since 2011 to minimize default risks. This covers key outstanding receivables as of the balance sheet date.
The term structure of trade receivables is as follows:
| in € thousand | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Receivables not due for payment and not written down |
90,617 | 90,919 |
| Overdue receivables not written down | 35,899 | 30,812 |
| thereof up to 30 days | 29,932 | 23,749 |
| thereof 31 to 90 days | 5,285 | 5,186 |
| thereof 91 days to 1 year | 566 | 1,427 |
| thereof over 1 year | 116 | 450 |
| 126,516 | 121,731 |
Value adjustments on trade receivables developed as follows:
| in € thousand | 2010 | 2009 |
|---|---|---|
| Impairment as of 01.01. | 1,755 | 1,566 |
| Additions (impairment expenses) | 2,202 | 975 |
| Used | - 984 | - 490 |
| Reversals | - 241 | - 296 |
| Impairment as of 31.12. | 2,732 | 1,755 |
The default risk in the case of derivative fi nancial instruments and cash and cash equivalents 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 minimal, as the Group as a rule only conducts derivative fi nancial transactions and liquid investments with counterparties with fi rst-class credit ratings.
In the previous year the receivables from related parties mainly related to HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH. As a result, the default risk which theoretically corresponds to the carrying amount is considered minimal.
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 on-going 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:
| 31.12.2010 | ||||
|---|---|---|---|---|
| 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 |
46,977 | 7,140 | 21,943 | 17,894 |
| Outfl ow of liquidity for future interest payments on |
||||
| fl oating-rate loans | 8,296 55,273 |
2,519 9,659 |
5,136 27,079 |
641 18,535 |
| 31.12.2009 | ||||
| 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 |
60,125 | 8,410 | 26,773 | 24,942 |
| Outfl ow of liquidity for future interest payments on |
||||
| fl oating-rate loans | 11,553 71,678 |
2,816 11,226 |
7,435 34,208 |
1,302 26,244 |
The interest rate swaps as of 31 December 2010 are expected to result in interest outfl ows totalling € 1,149 thousand within one year, and interest outfl ows of € 2,841 thousand within a period of one to fi ve years. Interest outfl ows of € 450 thousand are expected within a period exceeding fi ve years. 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 did not result in interest outfl ows.
With the exception of the non-current fi nancial liabilities described in Note 38, there are no signifi cant differences between the carrying 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 for the 2010 and 2009 fi nancial years:
| in € thousand | Valuation using IAS 39 | Balance sheet |
|||
|---|---|---|---|---|---|
| Loans and receivables |
Held for trading |
Available-for-sale fi nancial assets |
|||
| Amortized cost | Fair value | Amortized cost | |||
| Financial assets | 2,972 | 2,707 | 2,605 | 8,284 | |
| Trade receivables | 126,516 | 126,516 | |||
| Receivables from related parties | 2,704 | 2,704 | |||
| Other fi nancial receivables | 2,595 | 12 | 2,607 | ||
| Cash and cash equivalents | 235,493 | 235,493 | |||
| 370,280 | 12 | 2,707 | 2,605 |
| 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 | Amortized cost | Amortized cost | Present value | ||
| Non-current and current fi nancial liabilities |
1,237 | 1,506 | 339,182 | 15,280 | 121,543 | 478,748 |
| Accounts payable | 77,026 | 77,026 | ||||
| Liabilities towards related parties |
133,733 | 133,733 | ||||
| 1,237 | 1,506 | 416,208 | 149,013 | 121,543 |
| in € thousand | Valuation using IAS 39 | Balance sheet |
|||
|---|---|---|---|---|---|
| Loans and receivables |
Held for trading |
Available-for-sale fi nancial assets |
|||
| Amortized cost | Fair value | Amortized cost | |||
| Financial assets | 1,371 | 4,800 | 1,891 | 8,062 | |
| Trade receivables | 121,731 | 121,731 | |||
| Receivables from related parties | 6,660 | 6,660 | |||
| Other fi nancial receivables | 2,313 | 43 | 2,356 | ||
| Cash and cash equivalents | 173,531 | 173,531 | |||
| 305,606 | 43 | 4,800 | 1,891 |
| in € thousand | Valuation using IAS 39 | Valuation using other IAS |
Balance sheet |
||
|---|---|---|---|---|---|
| Held for trading |
Held as effective hedging instruments |
Other fi nancial liabilities |
|||
| Fair value | Fair value | Amortized cost | Amortized cost | ||
| Non-current and current fi nancial liabilities | 1,779 | 1,285 | 362,011 | 17,365 | 382,440 |
| Accounts payable | 54,616 | 54,616 | |||
| Liabilities towards related parties | 66,329 | 66,329 | |||
| 1,779 | 1,285 | 482,956 | 17,365 |
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-downs of € 1 thousand (previous year: write-ups of € 49 thousand) were recorded 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. These models use the relevant market prices and interest rates observed at the balance sheet date, obtained from recognized sources, as input parameters.
In the reporting year, gains of € 511 thousand (previous year: € 130 thousand) were recognized 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 € - 220 thousand (previous year: € - 800 thousand) in the fair value of fi nancial instruments designated as hedging instruments (interest rate swaps) were recognized directly in equity.
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 2010 to 2014. This is calculated based on the assumptions used for the Group's plans, which in turn draw on assumptions regarding capacity utilization, volumes, income and costs at the relevant affi liates. The discount rate is 4.5 %, and the effect of discounting came to € 12,268 thousand.
A 0.5 percentage point reduction in the discount rate would increase the present value of the anticipated payment obligations by € 1,256 thousand. A 10 % change in the forecast result at the relevant subsidiaries would lead to a € 9,757 thousand change in the fair value. The liability was reclassifi ed from equity and therefore had no effect on profi t and loss as of 31 December 2010.
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 Financial Statements are carried at fair value. Resulting gains and losses are recognized 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 unrealized gains and losses on cash fl ow hedges is recognized 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:
The remaining maturity of the interest rate derivatives is between two months and eight 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 rates swaps disclosed, as of the balance sheet date fi nancial instruments covering an amount of € 24,940 thousand (previous year: € 27,843 thousand) with a market value of € - 1,506 thousand (previous year: € - 1,285 thousand) are held as part of cash fl ow hedging relationships to hedge future cash fl ows from interest-bearing liabilities. The hedged cash fl ows are expected to occur within the next eight 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.
In the 2010 fi nancial year, losses of € 220 thousand (previous year: € 800 thousand) on fi nancial instruments used to hedge cash fl ows were recognized directly in equity.
| in € thousand | Fixed interest rate | Floating rate | Amount covered | Market values 31.12.2010 | Market values 31.12.2009 | ||
|---|---|---|---|---|---|---|---|
| positive | negative | positive | negative | ||||
| Interest rate swaps | 2.44 % to 4.33 % | 1M to 6M EURIBOR | 59,192 | 0 | - 2,743 | 0 | - 3,064 |
| Interest rate caps | 3.50 % to 4.25 % | 6M EURIBOR | 8,236 | 12 | 0 | 43 | 0 |
| 67,428 | 12 | - 2,743 | 43 | - 3,064 |
HHLA is the parent company of the HHLA Group.
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 share-
holder, 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 Financial Statements.
In addition to the business relationships with subsidiaries fully consolidated in the Consolidated Financial Statements, the following transactions took place with related parties in the respective fi nancial year:
| Income | Expenses | Receivables | Liabilities | ||||||
|---|---|---|---|---|---|---|---|---|---|
| in € thousand | 2010 | 2009 | 2010 | 2009 | 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| Companies with control over the Group |
7,645 | 5,954 | 4,413 | 5,730 | 0 | 5,830 | 65,855 | 65,506 | |
| Non-consolidated subsidiaries | 19 | 0 | 0 | 0 | 259 | 132 | 660 | 175 | |
| Joint ventures | 7,763 | 4,176 | 4,088 | 3,173 | 363 | 668 | 96 | 603 | |
| Associated companies | 284 | 176 | 0 | 0 | 401 | 0 | 479 | 0 | |
| Other transactions with related parties |
1,337 | 1,075 | 27,298 | 27,322 | 1,681 | 30 | 66,643 | 45 | |
| 17,048 | 11,381 | 35,799 | 36,225 | 2,704 | 6,660 | 133,733 | 66,329 |
Liabilities towards related parties include a loan of € 65,000 thousand (previous year: € 65,000 thousand) to the subgroup Real Estate, 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 % p. a.) as of the balance sheet date. The loan can be cancelled with three months' notice. In addition, HHLA has liabilities from cash clearing with HGV totalling € 600 thousand (previous year: receivables totalling € 4,200 thousand). HHLA's receivables accrued interest at a rate of between 0.38 % and 0.93 % p. a. (previous year: between 0.27 % and 2.12 % p. a.) in the reporting year. The interest rates for HHLA's liabilities were between 0.48 % and 1.03 % p. a. (previous year: between 0.37 % and 2.22 % p. a.).
Obligations from fi nance leases amounting to € 65,799 thousand for the lease of two mega-ship berths from HPA are included in other transactions with related parties.
Expenses with related parties mostly include rent for land and quay walls in the port and the Speicherstadt historical warehouse district. Income from related parties is composed of rental and service income as well as interest income.
Furthermore, HGV and the Free and Hanseatic City of Hamburg, as parties related to HHLA, have provided comfort letters and guarantees for loans granted to companies in the HHLA Group to
Kreditanstalt für Wiederaufbau, Frankfurt/Main, and the European Investment Bank, Luxembourg. The nominal amount of the bank loans is about € 188.0 million (previous year: € 188.0 million), of which around € 150.0 million plus interest was still outstanding on 31 December 2010 (previous year: € 158.3 million).
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:
| direct indirect % % € thousand year € thousand Port Logistics Segment Container HHLA Container Terminals Gesellschaft mit beschränkter Haftung, Hamburg 1, 2, 3 100.0 111,424 2010 HCCR Hamburger Container- und Chassis-Reparatur-Gesellschaft mbH, Hamburg 1, 2, 3 100.0 1,942 2010 LZU Leercontainer Zentrum Unikai GmbH, Hamburg 1 65.0 1,869 2010 1,569 |
|---|
| HHLA Container Terminal Tollerort GmbH, Hamburg 1, 2, 3 100.0 34,741 2010 |
| HHLA Rosshafen Terminal GmbH, Hamburg 1 100.0 17,843 2010 414 |
| UNIKAI Hafenbetrieb GmbH, Hamburg 1, 2, 3 100.0 3,640 2010 |
| HHLA Container-Terminal Altenwerder GmbH, Hamburg 1, 2, 3 74.9 74,072 2010 |
| SCA Service Center Altenwerder GmbH, Hamburg 1, 2, 3 74.9 601 2010 |
| Kombi-Transeuropa Terminal Hamburg GmbH, Hamburg 4 37.5 163 2010 53 |
| HHLA CTA Besitzgesellschaft mbH, Hamburg 1, 2, 3 74.9 6,360 2010 |
| CuxPort GmbH, Cuxhaven 6 25.1 6,007 2010 849 |
| FLZ Hamburger Feeder Logistik Zentrale GmbH, Hamburg 4 66.0 25 2010 |
| HHLA Container Terminal Burchardkai GmbH, Hamburg 1, 2, 3 100.0 76,961 2010 |
| Service Center Burchardkai GmbH, Hamburg 1, 2, 3 100.0 26 2010 |
| Cuxcargo Hafenbetrieb GmbH & Co. KG, Cuxhaven 5 50.0 - 8 2010 |
| Cuxcargo Hafenbetrieb Verwaltungs-GmbH, Cuxhaven 5 50.0 17 2010 - 1 |
| DHU Gesellschaft Datenverarbeitung Hamburger Umschlagsbetriebe mbH, Hamburg 5 23.0 17.4 1,516 2010 671 |
| SC HPC Ukraina, Odessa/Ukraine 1 100.0 53,227 2010 12,388 |
| Segment Intermodal |
| HHLA Intermodal GmbH, Hamburg 1, 2, 3 100.0 29,043 2010 |
| CTD Container-Transport-Dienst GmbH, Hamburg 1, 2, 3 100.0 256 2010 |
| CIT Container Inland Trucking GmbH, Hamburg 5 50.0 25 2010 - 4 |
| CTL Container Terminal Lübeck GmbH, Lübeck 1, 2, 3 100.0 30 2010 |
| HHLA Intermodal Polska Sp. z o.o., Warsaw/Poland 1 100.0 16,497 2010 - 2,722 |
| HHLA Intermodal Polska Terminals Sp. z o.o., Warsaw/Poland 1, 5 100.0 3 2010 - 6 |
| METRANS a.s., Prague/Czech Republic 1 51.5 110,102 2010 20,315 |
| AREHOR s.r.o., Šenov/Czech Republic 1, 5 51.5 1,022 2010 - 97 |
| METRANS (Deutschland) GmbH, Hamburg 1, 5 51.5 146 2010 29 |
| METRANS (Danubia) a.s., Dunajská Streda/Slovakia 1 51.5 15,952 2010 2,154 |
| METRANS (Danubia) Kft., Győr/Hungary 1, 5 51.5 - 123 2010 - 300 |
| METRANS Adria D.O.O., Koper/Slovenia 1, 5 51.5 392 2010 340 |
| IBZ Pankrác a.s., Nýřany/Czech Republic 1, 5 48.1 209 2010 - 1 |
| DYKO, spol. s r.o., Kolín/Czech Republic 1 51.5 2,769 2010 433 |
| RAILTRANSPORT s.r.o., Prague/Czech Republic 1, 7 41.2 86 2010 - 399 |
| Transport-Schienen-Dienst GmbH, Kirnitzschtal 1, 5 41.2 32 2010 32 |
| TFG Verwaltungs GmbH, Frankfurt/Main 5 50.0 127 2010 |
| Company name and headquarters | Share of capital | Equity | Annual profi t | ||
|---|---|---|---|---|---|
| direct | indirect | ||||
| % | % | € thousand | year | € thousand | |
| TFG Transfracht Internationale Gesellschaft für kombinierten Güterverkehr mbH & Co. KG, Frankfurt/Main 4 |
50.0 | - 742 | 2010 | - 4,525 | |
| POLZUG Intermodal GmbH, Hamburg 4 | 33.3 | 6,728 | 2010 | 45 | |
| POLZUG Intermodal Polska sp. z o.o., Warsaw/Poland 4 | 33.3 | 4,633 | 2010 | - 963 | |
| POLZUG INTERMODAL LLC, Poti/Georgia (formerly: Silk Road Express Georgia LLC, Poti/Georgia) 5 |
24.9 | 114 | 2009 | 133 | |
| IPN Inland Port Network Verwaltungsgesellschaft mbH, Hamburg 5 | 50.0 | 23 | 2010 | - 2 | |
| IPN Inland Port Network GmbH & Co. KG, Hamburg 5 | 50.0 | 86 | 2010 | - 39 | |
| Segment Logistics | |||||
| HPC Hamburg Port Consulting GmbH, Hamburg 1, 2, 3 | 100.0 | 1,367 | 2010 | 0 | |
| HPTI Hamburg Port Training Institute GmbH, Hamburg 1, 2, 3 | 100.0 | 102 | 2010 | 0 | |
| Uniconsult Universal Transport Consulting Gesellschaft mit beschränkter Haftung, Hamburg 1, 2, 3 | 100.0 | 100 | 2010 | 0 | |
| UNIKAI Lagerei- und Speditionsgesellschaft mbH, Hamburg 1 | 51.0 | 4,460 | 2010 | 1,412 | |
| ARS-UNIKAI GmbH, Hamburg 4 | 25.5 | 306 | 2010 | 17 | |
| HCC Hanseatic Cruise Centers GmbH, Hamburg 1 | 51.0 | 1,045 | 2010 | 374 | |
| HHLA Frucht- und Kühl-Zentrum GmbH, Hamburg 1 | 51.0 | 13,438 | 2010 | - 1,376 | |
| Ulrich Stein Gesellschaft mit beschränkter Haftung, Hamburg 1 | 51.0 | 501 | 2010 | 345 | |
| HHLA Logistics GmbH, Hamburg 1, 2 | 100.0 | - 1,237 | 2010 | 0 | |
| HHLA Logistics Altenwerder GmbH & Co. KG, Hamburg 1 | 100.0 | 227 | 2010 | - 1,089 | |
| HHLA Logistics Altenwerder Verwaltungsgesellschaft mbH, Hamburg 1, 5 | 100.0 | 48 | 2010 | - 1 | |
| Hansaport Hafenbetriebsgesellschaft mit beschränkter Haftung, Hamburg 3, 4 | 49.0 | n.a. | 2010 | n.a. | |
| Holding/Other | |||||
| GHL Erste Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung mbH, Hamburg 1, 2, 3 | 100.0 | 2,735 | 2010 | 0 | |
| GHL Zweite Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung mbH, Hamburg 1, 2, 3 | 100.0 | 874 | 2010 | 0 | |
| HHLA-Personal-Service-Gesellschaft mit beschränkter Haftung, Hamburg 1, 2, 3 | 100.0 | 45 | 2010 | 0 | |
| HHLA Energiehandelsgesellschaft mbH, Hamburg 1, 2 | 100.0 | 25 | 2010 | 8 | |
| HCCR Erste Beteiligungsgesellschaft mbH, Hamburg 1, 5 | 100.0 | 34 | 2010 | 0 | |
| Real Estate | |||||
| Segment Real Estate | |||||
| Fischmarkt Hamburg-Altona Gesellschaft mit beschränkter Haftung, Hamburg 1, 2, 3 | 100.0 | 4,518 | 2010 | 0 | |
| GHL Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung Block D mbH, Hamburg 1, 2, 3 | 100.0 | 8,184 | 2010 | 0 | |
| GHL Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung Bei St. Annen mbH, Hamburg 1 | 100.0 | 9,243 | 2010 | 387 |
GHL Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung Block T mbH, Hamburg 1, 2, 3 100.0 1,327 2010 0
Controlled companies
The disclosure relief as per Section 264 (3) of the German Commercial Code (HGB) will be utilized for these companies
4 Proportionately consolidated companies
Due to their overall immaterial signifi cance, these companies are not included in the Consolidated Financial Statement or,
as associated companies, they are not measured using the equity method, but instead are shown as participations
6 Associates accounted for using the equity method
Consolidation for the fi rst time in 2010
2 Profi t and loss transfer agreements existed with these companies in 2010
The relevant group of people includes the current and former members of the Executive Board and their surviving dependants. Related parties also include other key management personnel, such as members of management and supervisory bodies at affi liates, and their immediate families.
In accordance with Section 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 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 fi nancial position and the amount and structure of Executive Board remuneration in comparable companies.
The remuneration of Executive Board members is made up of a non-performance-related basic annual salary, a performance-related bonus and other benefi ts. The amount of the bonus depends on the consolidated earnings before taxes and minority interests, adjusted for additions to pension provisions and any extraordinary income from the disposal of companies and land.
The current remuneration structure does not include any long-term incentive components.
In addition to this, there is a pension commitment for each Executive Board member. Pensions are paid to former Executive Board members either after 5 or 8 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 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 60 % of the pension entitlement.
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.
The regulations described above were agreed with the members of the Executive Board before the German Act on the Appropriateness of Management Board Remuneration (VorstAG) came into effect. In 2010, the Supervisory Board approved a new remuner-
ation system adjusted to the requirements of the Act. The alterations thus agreed will primarily apply when contracts are amended or extended and when new contracts are concluded.
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 | 2010 | 2009 |
|---|---|---|
| Non-performance-related remuneration | ||
| Basic salary | 1,450 | 1,519 |
| Other benefi ts | 53 | 75 |
| Performance-related remuneration | 1,051 | 1,005 |
| 2,554 | 2,599 |
The other benefi ts are made up of benefi ts in kind, which principally consist of the use of a company car.
Benefi ts totalling € 821 thousand (previous year: € 751 thousand) were paid to former members of the Executive Board and their surviving dependents. Provisions of € 4,435 thousand (previous year: € 3,625 thousand) have been made for pension commitments to active Executive Board members and provisions of € 11,692 thousand (previous year: € 11,639 thousand) have been made for pension commitments to former Executive Board members and their surviving dependents.
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, 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 % 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 committee receives € 5,000. However, the total may not exceed € 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 respect ive pro rata payment.
Remuneration to the Supervisory Board totalled € 324 thousand in 2010 (previous year: € 287 thousand).
The members of the Board and their mandates are listed beginning on page 48 et seqq.
HHLA has based its corporate governance on the recommendations and suggestions of the German Corporate Governance Code (the Code) as published on 18 June 2009, and the subsequent version dated 26 May 2010 and published on 2 July 2010. 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 2010 and on 15 December 2010 issued the declaration of compliance 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 recognized as expenses for services provided by the auditors of the Consolidated Financial Statements, KPMG AG Wirtschaftsprüfungsgesellschaft:
| in € thousand | 2010 | 2009 |
|---|---|---|
| Audit of fi nancial statements | 781 | 761 |
| Other certifi cation services | 268 | 315 |
| Tax advisory services | 48 | 15 |
| Other services | 10 | 226 |
| 1,107 | 1,317 |
Fees for auditing fi nancial statements primarily consist of the fees for the audit of the Consolidated Financial Statements and for the audits of the fi nancial statements of Hamburger Hafen und Logistik Aktiengesellschaft and its domestic subsidiaries. In 2010 and the previous year, fees for other certifi cation services related predom inantly to the qualifi ed review of interim fi nancial statements.
The HHLA Group took out a long-term bank loan for € 60 million in January 2011, to fi nance its expansion projects in the Container segment. There were no other transactions of special signifi cance after the balance sheet date 31 December 2010.
Hamburg, 4 March 2011
HAMBURGER HAFEN UND LOGISTIK AKTIENGESELLSCHAFT
| Klaus-Dieter Peters | Dr. Stefan Behn | Heinz Brandt |
|---|---|---|
Dr. Sebastian Jürgens Dr. Roland Lappin
for the period 1 January to 31 December 2010
| in € | 2010 | 2010 | 2009 | 2009 | |
|---|---|---|---|---|---|
| 1. | Revenue | 138,025,310.71 | 137,690,767.29 | ||
| 2. | Decrease in work in progress | - 748,536.02 | - 1,059,795.50 | ||
| 3. | Own work capitalized | 266,579.78 | 333,173.31 | ||
| 4. | Other operating income | 7,167,690.75 | 7,971,695.61 | ||
| 5. | Cost of materials and services | ||||
| a) Expenses for raw materials, consumables, supplies and purchased merchandise |
4,013,009.52 | 3,779,732.12 | |||
| b) Expenses for purchased services | 1,523,871.38 | 5,536,880.90 | 1,485,676.80 | 5,265,408.92 | |
| 6. | Personnel expenses | ||||
| a) Wages and salaries | 87,935,436.36 | 92,119,762.00 | |||
| b) Social security contributions and expenses for pension and similar benefi ts of which for pensions € 1,273,075.64 (previous year: € 17,367,821.19) |
17,618,134.94 | 105,553,571.30 | 33,131,328.16 | 125,251,090.16 | |
| 7. | Depreciation and amortization on intangible fi xed assets and property, plant and equipment |
5,902,441.99 | 6,261,184.27 | ||
| 8. | Other operating expenses | 28,799,507.73 | 29,153,293.92 | ||
| 9. | Income from profi t transfer agreements | 138,841,496.57 | 96,570,147.61 | ||
| 10. Income from equity participations of which from affi liated companies €1,012,602.10 (previous year: € 1,378,304.69) |
4,673,925.10 | 4,045,729.69 | |||
| 11. Other interest and similar income of which from affi liated companies € 4,941,272.54 (previous year: € 4,452,784.96) |
6,729,175.32 | 7,476,552.31 | |||
| 12. Amortization and impairment losses in fi nancial statements | 1,100,000.00 | 5,737,030.00 | |||
| 13. Expenses from assumed losses | 7,159,203.03 | 23,979,670.07 | |||
| 14. Interest and similar expenses of which to affi liated companies € 3,770,617.38 (previous year: € 3,973,088.75) of which from accrued interest € 19,097,398.80 (previous year: € 0,00) |
23,275,607.77 | 4,184,641.43 | |||
| 15. Result from ordinary income | 117,628,429.49 | 53,195,951.55 | |||
| 16. Extraordinary income | 110,327.37 | 0.00 | |||
| 17. Extraordinary expenses | 155,338.00 | 0.00 | |||
| 18. Net extraordinary loss | - 45,010.63 | 0.00 | |||
| 19. Taxes on income of which deferred € 1,542,944.00 (previous year: € 0.00) |
30,597,410.94 | 1,555,989.78 | |||
| 20. Other taxes | 487,746.90 | 494,705.59 | |||
| 21. Net profi t for the year | 86,498,261.02 | 51,145,256.18 | |||
| 22. Profi t carried forward from the previous year | 79,205,284.70 | 58,754,658.92 | |||
| 23. Unappropriated profi t | 165,703,545.72 | 109,899,915.10 |
The annual fi nancial statement and report of Hamburger Hafen und Logistik Aktiengesellschaft, Hamburg, for the 2010 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 KPMG AG Wirtschaftsprüfungsgesellschaft.The statement of income for the period 1 January to 31 December 2010, and the balance sheet as of 31 December 2010, are presented on this and the following pages.
as of 31 December 2010 in € 31.12.2010 31.12.2010 31.12.2009 31.12.2009 Assets A. Non-current assets I. Intangible assets 1. Software 1,262,295.53 940,104.38 2. Payments made on account 53,069.00 1,315,364.53 55,000.00 995,104.38 II. Property, plant and equipment 1. Land, equivalent land rights and buildings, including buildings on leased land 70,925,412.79 74,679,949.81 2. Technical equipment and machinery 2,694,887.52 2,854,913.64 3. Other plant, operating and offi ce equipment 3,547,102.56 3,705,941.03 4. Payments made on account and plant under construction 7,470,892.17 84,638,295.04 1,147,492.55 82,388,297.03 III. Financial assets 1. Interests in affi liated companies 225,037,545.57 225,037,545.57 2. Equity investments 2,618,861.54 2,618,861.54 3. Non-current securities 564,561.61 228,220,968.72 1,600,092.39 229,256,499.50 314,174,628.29 312,639,900.91 B. Current assets I. Inventories 1. Raw materials, consumables and supplies 203,796.04 149,955.05 2. Work in progress 4,014,222.29 4,218,018.33 4,762,758.31 4,912,713.36 II. Receivables and other assets 1. Trade receivables 815,277.87 1,253,508.43 2. Receivables from the Free and Hanseatic City of Hamburg of which with a residual term of more than one year € 414,346.11 (previous year: € 422,612.82) 423,711.83 448,367.41 3. Receivables from affi liated companies 412,623,758.30 354,044,080.39 4. Receivables from investee companies 11,809.91 229,574.66 5. Other assets of which with a residual term of more than one year € 1,303,477.82 (preview year: € 253,026.66) 25,122,028.93 438,996,586.84 28,009,951.00 383,985,481.89 III. Cash and cash equivalents 198,016,356.63 148,558,240.09 641,230,961.80 537,456,435.34 C. Accruals and deferrals 389,403.94 446,867.37 D. Deferred tax assets 31,363,786.00 0.00 987,158,780.03 850,543,203.62
| as of 31 December 2010 | |||||
|---|---|---|---|---|---|
| in € | 31.12.2010 | 31.12.2010 | 31.12.2009 | 31.12.2009 | |
| Equity and liabilities | |||||
| A. | Equity | ||||
| I. | Subscribed capital | ||||
| 1. | Port Logistics | 69,975,326.00 | 69,975,326.00 | ||
| 2. | Real Estate | 2,704,500.00 | 72,679,826.00 | 2,704,500.00 | 72,679,826.00 |
| II. | Capital reserve | ||||
| 1. | Port Logistics | 134,915,393.63 | 134,915,393.63 | ||
| 2. | Real Estate | 506,206.26 | 135,421,599.89 | 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 | 15,676,571.45 | |||
| b) Real Estate | 1,322,353.86 | 57,427,679.22 | 627,062.86 | 16,303,634.31 | |
| 62,757,679.22 | 21,633,634.31 | ||||
| IV. | Profi t carried forward | ||||
| 1. | Port Logistics | 71,616,066.80 | 53,900,570.01 | ||
| 2. | Real Estate | 7,589,217.90 | 79,205,284.70 | 4,854,088.91 | 58,754,658.92 |
| V. | Net profi t for the year | ||||
| 1. | Port Logistics | 81,846,180.94 | 45,705,627.19 | ||
| 2. | Real Estate | 4,652,080.08 | 86,498,261.02 | 5,439,628.99 | 51,145,256.18 |
| 436,562,650.83 | 339,634,975.30 | ||||
| B. | Provisions | ||||
| 1. | Provisions for pensions and similar obligations | 288,744,562.97 | 297,070,034.69 | ||
| 2. | Tax provisions | 3,545,891.66 | 1,579,580.15 | ||
| 3. | Other provisions | 32,729,640.67 | 36,467,818.07 | ||
| 325,020,095.30 | 335,117,432.91 | ||||
| C. | Liabilities | ||||
| 1. | Payments on account | 4,183,081.69 | 5,004,218.31 | ||
| 2. | Accounts payable | 1,799,849.61 | 1,587,804.09 | ||
| 3. | Liabilities towards the Free and Hanseatic City of Hamburg | 5,221.97 | 2,210.02 | ||
| 4. | Liabilities towards HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH |
65,855,243.21 | 61,273,639.86 | ||
| 5. | Liabilities towards affi liated companies | 140,169,179.47 | 97,994,019.84 | ||
| 6. | Liabilities towards investee companies | 938,624.98 | 214,244.14 | ||
| 7. | Other liabilities of which from taxes € 2,715,835.83 (previous year: € 2,732,875.08) of which for social security € 3,113,242.55 |
||||
| (previous year: € 2,804,657.21) | 10,227,672.98 | 9,002,571.16 | |||
| 223,178,873.91 | 175,078,707.42 | ||||
| D. | Accruals and deferrals | 793,953.99 | 712,087.99 | ||
| E. | Deferred tax liabilities | 1,603,206.00 | 0.00 | ||
| 987,158,780.03 | 850,543,203.62 |
"We have audited the consolidated fi nancial statements prepared by the Hamburger Hafen und Logistik Aktiengesellschaft, Hamburg, comprising Group balance sheet, Group income statement, Group statement of comprehensive income, Group statement of changes in equity, Group cash fl ow statement and notes of the group, together with the Group Management Report for the business year from January 1, 2010 to December 31, 2010. The preparation of the consolidated fi nancial statements and the Group Management Report in accordance with IFRS, as adopted by the EU, and the additional requirements of German commercial law pursuant to § 315a Abs. 1 HGB [Handelsgesetzbuch "German Commercial Code"] and supplementary provisions of the articles of incorporation are the responsibility of the parent company's management. Our responsibility is to express an opinion on the Consolidated Financial Statements and on the Group Management Report based on our audit.
We conducted our audit of the consolidated fi nancial statements in accordance with § 317 HGB [Handelsgesetzbuch "German Commercial Code"] 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 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 § 315a Abs. 1 HGB and supplementary provisions of the articles of incorporation 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, 4 March 2011
KPMG AG Wirtschaftsprüfungsgesellschaft
Ditting Retzlaff Wirtschaftsprüfer Wirtschaftsprüferin
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, 4 March 2011
Hamburger Hafen und Logistik AG The Executive Board
Klaus-Dieter Peters Dr. Stefan Behn Heinz Brandt
Dr. Sebastian Jürgens Dr. Roland Lappin
Miscellaneous
Fully automated unmanned transport vehicles used to move containers between quayside container gantry cranes on the waterside and storage blocks. Deployed by HHLA at Container Terminal Altenwerder.
Automated storage blocks used by HHLA at Container Terminal Altenwerder – and also at Container Terminal Burchardkai – for compact stacking of boxes RMG.
Crane unit used for loading and discharging containerships. A distinction is made between panamax-, post-panamax- and superpost-panamax container gantry cranes for handling ships of the corresponding sizes.
New type of container gantry crane that in one single move can carry two 40-ft. or four 20-ft. containers simultaneously.
Business model based on long-term cooperation and division of labour between a manufacturer of goods and a provider of logistics services, and regulated by a service contract. Providers of contract logistics services provide logistics and logistics-related services along the transport chain.
Regional containerships that distribute smaller quantities of containers onwards to ports not served directly by large containerships. The Baltic region, for example, is served from Hamburg by feeders.
Describes a port's catchment area.
Transport utilizing several carriers (rail, water, road) and combining the specifi c advantages of each.
Overseas ports in Northern Europe, in a wider sense signifying all the large continental ports in Northern Europe from Le Havre as far as Hamburg and Gothenburg. In a geographically narrower sense, the term often used is Hamburg-Antwerp Range.
see RMG
Transport vehicle using a diagonal telescopic arm that can simultaneously accept two standard containers and lift these across other containers.
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 gantry cranes, and in rail cargo handling, see rail gantry cranes.
The abbreviation stands for "roll on, roll off" and is used to describe a loading/unloading process for cargoes (e.g. cars) that can be rolled, or driven, on to a ship.
see TEU
see RMG
A vehicle used for moving containers around terminals. The vancarrier driver is seated at the controls above the container, lifting and stacking it on one of up to four layers.
In maritime logistics this means a transhipment point for cargo, usually a container terminal.
Term denoting a normed standard container, in worldwide use as a unit of measure for uniform counting of container quantities. A 20-ft. container is normally 20 ft. / 6.06 m long and 8 ft. / 2.44 m wide, and just as 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 utilize 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
EBIT without one-off restructuring expense and the operating result of affi liated companies, which have been classifi ed as discontinued.
Earnings before interest, taxes, depreciation and Amortization
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 + amortization 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; ROCE of the year 2009 is calculated by using EBIT from continuing activities. Assets held for sale are not part of the operating assets.
Sales derived from selling, letting or leasing and from services provided by the Group, less sales deductions and turnover tax.
31 March 2011 Annual Report 2010
13 May 2011 Interim Report January – March 2011
16 June 2011 Annual General Meeting
12 August 2011 Interim Report January – June 2011
11 November 2011 Interim Report January – September 2011
Hamburger Hafen und Logistik Aktiengesellschaft Bei St. Annen 1 20457 Hamburg Germany Tel.: +49-40-3088-0 Fax: +49-40-3088-3355 www.hhla.de [email protected]
Tel.: +49-40-3088-3100 Fax: +49-40-3088-55-3100 [email protected]
Tel.: +49-40-3088-3446 Fax: +49-40-3088-3355 [email protected]
Kirchhoff Consult AG
Druckerei Kriechbaumer
The Hamburger Hafen und Logistik Aktiengesellschaft Annual Report 2010 is a translation of the original German Hamburger Hafen und Logistik Aktiengesellschaft Geschäftsbericht 2010. Please note that only the German version is legally binding.
| in € million | 2006 | 2007 | 2008 | 2009 | 2010 |
|---|---|---|---|---|---|
| Revenue | |||||
| Port Logistics subgroup 1 | – | 1,152.4 | 1,299.2 | 962.9 | 1,044.1 |
| Real Estate subgroup 1 | – | 30.8 | 32.6 | 32.7 | 34.0 |
| Consolidation | – | - 3.2 | - 5.0 | - 4.9 | - 5.0 |
| HHLA Group | 1,017.4 | 1,180.0 | 1,326.8 | 990.7 | 1,073.1 |
| EBITDA | |||||
| Port Logistics subgroup 1 | – | 364.6 | 439.4 | 261.1 | 290.1 |
| Real Estate subgroup 1 | – | 14.1 | 17.6 | 16.4 | 16.8 |
| Consolidation | – | 0 | - 0.2 | 0 | 0 |
| HHLA Group | 296.4 | 378.7 | 456.8 | 277.5 | 306.9 |
| EBITDA margin in % | 29.1 | 32.1 | 34.4 | 28.0 | 28.6 |
| EBIT | |||||
| Port Logistics subgroup 1 | – | 277.0 | 341.3 | 147.7 | 179.9 |
| Real Estate subgroup 1 | – | 10.3 | 13.7 | 12.3 | 12.7 |
| Consolidation | – | 0.3 | 0.1 | 0.2 | 0.3 |
| HHLA Group | 218.1 | 287.6 | 355.1 2 | 160.2 2 | 192.9 2 |
| EBIT margin in % | 21.4 | 24.4 | 26.8 | 16.2 | 18.0 |
| Profi t after tax | 116.9 | 152.0 | 217.5 | 89.1 | 113.9 |
| Profi t after tax and minority interests | 97.1 | 111.3 | 160.4 | 53.0 | 76.2 |
| Cash fl ow/investments/ depreciation and amortization |
|||||
| Cash fl ow from operating activities | 199.7 | 246.7 | 341.9 | 193.2 | 206.9 |
| Cash fl ow from investing activities | - 248.9 | - 174.7 | - 265.6 | - 157.3 | - 56.3 |
| Cash fl ow from fi nancing activities | - 19.7 | 131.9 | - 88.5 | - 88.6 | - 95.2 |
| Investments | 205.2 | 194.8 | 259.4 | 159.7 | 173.8 |
| Depreciation and amortization | 78.3 | 91.0 | 101.8 | 117.3 | - 114.0 |
| Assets and liabilities | |||||
| Non-current assets | 977.7 | 1.042.9 | 1.174.2 | 1.224.9 | 1.290.6 |
| Current assets | 221.9 | 440.9 | 438.3 | 365.6 | 424.5 |
| Equity | 258.7 | 569.5 | 682.6 | 637.0 | 567.0 |
| Equity ratio3 in % |
21.6 | 38.4 | 42.3 | 40.0 | 33.1 |
| Pension provisions | 377.4 | 312.4 | 300.7 | 325.1 | 331.1 |
| Other non-current assets | 359.0 | 342.4 | 350.3 | 385.5 | 518.8 |
| Current liabilities | 204.5 | 259.5 | 278.9 | 242.9 | 298.2 |
| Gearing ratio | 2.5 | 0.8 | 0.6 | 0.8 | 1.1 |
| Total assets | 1,199.6 | 1,483.8 | 1,612.5 | 1,590.5 | 1,715.1 |
| Employees | |||||
| Employees as of 31.12. | 4,215 | 4,565 | 5,001 | 4,760 | 4,679 |
| Performance data | |||||
| Container throughput in million TEU | 6.5 | 7.2 | 7.3 | 4.9 | 5.8 |
| Container transport 4 in million TEU |
1.5 | 1.7 | 1.8 | 1.5 | 1.7 |
Reorganization into Port Logistics subgroup and Real Estate subgroup in 2007
EBIT from continuing activities € 190.7 million in 2009, € 357.8 million in 2008 and € 177.7 million in 2009
3 Equity ratio in 2010 after a reclassifi cation from minority interests to fi nancial liabilities
Transport volume was fully consolidated
HAMBURGER HAFEN UND LOGISTIK AKTIENGESELLSCHAFT Bei St. Annen 1, 20457 Hamburg, Germany, Tel: +49-40-3088-0, Fax: +49-40-3088-3355, www.hhla.de, [email protected]
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