Annual Report • Mar 30, 2012
Annual Report
Open in ViewerOpens in native device viewer
The intermodal network: Germany: Bremerhaven, Berlin, Dortmund, Cologne, Leipzig, Riesa, Dresden, Frankfurt am Main, Bamberg, Nuremberg, Mannheim, Kornwestheim, Regensburg, Wörth, Augsburg, Ulm, Munich Austria: Enns, Vienna, Salzburg, Wolfurt Switzerland: Basle, Frenkendorf, Zurich/Rekingen, Niederglatt Czech Republic: Prague, Ostrava, Plzeň, Česká Třebová, Zlín Slovakia: Košice, Dunajská Streda Hungary: Budapest Slovenia: Koper Poland: Gdansk, Milawa, Poznán, Warsaw, Lodz, Wroclaw, Katowice Lithuania: Šeštokai Latvia: Vilnius Belarus: Minsk Ukraine: Kiev, Rostov-on-Don Moldova: Chișinău
Seaports are the most important interfaces in global transport and logistics chains. Thanks to HHLA's container terminals, the Port of Hamburg is Europe's second-largest container port and one of the world's fastest, most efficient and most important logistics hubs. The terminals owe their outstanding performance to state-of-the-art handling and storage technologies (such as compact automated block storage and huge tandem container gantry cranes), integrated terminal management and the expertise of our highly skilled staff. The perfect logistics of HHLA's seaport terminals are also transferred to its hinterland operations. Large container rail depots at the terminals act as ideal interfaces for hinterland traffic. Together with the inland terminals and HHLA's own transport systems, they form a complete network between the international port and its European hinterland – home to over 300 million people.
control container transport chains in the European hinterland. They are directly linked to the seaports via regular shuttle trains. As hubs, they collect and distribute containers throughout a wide area by road and rail.
The intermodal network: Germany: Bremerhaven, Berlin, Dortmund, Cologne, Leipzig, Riesa, Dresden, Frankfurt am Main, Bamberg, Nuremberg, Mannheim, Kornwestheim, Regensburg, Wörth, Augsburg, Ulm, Munich Austria: Enns, Vienna, Salzburg, Wolfurt Switzerland: Basle, Frenkendorf, Zurich/Rekingen, Niederglatt Czech Republic: Prague, Ostrava, Plzeň, Česká Třebová, Zlín Slovakia: Košice, Dunajská Streda Hungary: Budapest Slovenia: Koper Poland: Gdansk, Milawa, Poznán, Warsaw, Lodz, Wroclaw, Katowice Lithuania: Šeštokai Latvia: Vilnius Belarus: Minsk
| HHLA Group | ||||
|---|---|---|---|---|
| in € million | 2011 | 2010 | Change | |
| Revenue and Earnings | ||||
| Revenue | 1,217.3 | 1,067.8 | 14.0 % | |
| EBITDA | 333.4 | 306.9 | 8.7 % | |
| EBITDA margin in % | 27.4 | 28.7 | - 1.3 pp | |
| EBIT | 207.0 | 192.9 | 7.3 % | |
| EBIT margin in % | 17.0 | 18.1 | - 1.1 pp | |
| Profit after tax | 118.8 | 113.9 | 4.3 % | |
| Profit after tax and minority interests | 89.3 | 76.2 | 17.1 % | |
| Cash Flow and Investments | ||||
| Cash flow from operating activities | 266.1 | 206.9 | 28.6 % | |
| Investments | 128.7 | 173.8 | - 25.9 % | |
| Performance Data | ||||
| Container throughput in thousand TEU | 7,087 | 5,844 | 21.3 % | |
| Container transport 1 in thousand TEU |
1,887 | 1,696 | 11.3 % | |
| 31.12.2011 | 31.12.2010 | Change | ||
| Balance Sheet | ||||
| Total assets | 1,811.5 | 1,715.1 | 5.6 % | |
| Equity | 644.7 | 567.0 | 13.7 % | |
| Equity ratio in % | 35.6 | 33.1 | 2.5 pp | |
| Employees | ||||
| Number of employees | 4,797 | 4,679 | 2.5 % |
| Port Logistics Subgroup2,3 | Real Estate Subgroup2,4 | |||||
|---|---|---|---|---|---|---|
| in € million | 2011 | 2010 | Change | 2011 | 2010 | Change |
| Revenue | 1,190.6 | 1,042.8 | 14.2 % | 31.7 | 29.8 | 6.5 % |
| EBITDA | 317.3 | 290.1 | 9.4 % | 16.2 | 16.8 | - 3.7 % |
| EBITDA margin in % | 26.6 | 27.8 | - 1.2 pp | 51.1 | 56.5 | - 5.4 pp |
| EBIT | 194.8 | 179.9 | 8.3 % | 11.9 | 12.7 | - 6.1 % |
| EBIT margin in % | 16.4 | 17.3 | - 0.9 pp | 37.6 | 42.6 | - 5.0 pp |
| Profit after tax | 113.5 | 107.6 | 5.5 % | 5.0 | 4.8 | 4.4 % |
| Profit after tax and minority interests | 84.0 | 69.9 | 20.2 % | 5.0 | 4.8 | 4.4 % |
| Earnings per share in €5 | 1.20 | 1.00 | 20.2 % | 1.95 | 2.34 | - 16.9 % |
| Dividend per share in €6 | 0.65 | 0.55 | 18.2 % | 1.00 | 1.20 | - 16.7 % |
1 The transport volume was fully consolidated
2 Before consolidation between subgroups
3 Listed A shares
4 Non-listed S shares
5 Basic and diluted
6 2011: Dividend proposal
We are one of Europe's leading port logistics groups. With our effi cient container terminals, high-performance transport systems and wide-ranging logistics services, we offer our clients a comprehensive network connecting the international port with its European hinterland. At our hubs in the seaport and in the hinterland, we link three different carriers – ships, trains and trucks – to create powerful logistics chains which set economic and ecological standards.
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.
| in € million | 2011 | 2010 | Change |
|---|---|---|---|
| Revenue | 712.9 | 604.5 | 17.9 % |
| EBIT | 195.5 | 155.7 | 25.6 % |
| EBIT margin in % | 27.4 | 25.8 | 1.7 pp |
| Employees as of 31.12. | 2,898 | 2,891 | 0.2 % |
| Container throughput in thousand TEU | 7,087 | 5,844 | 21.3 % |
Revenue in € million
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 on 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.
| in € million | 2011 | 2010 | Change |
|---|---|---|---|
| Revenue | 357.6 | 317.3 | 12.7 % |
| EBIT | 24.6 | 24.8 | - 0.7 % |
| EBIT margin in % | 6.9 | 7.8 | - 0.9 pp |
| Employees as of 31.12. | 902 | 778 | 16.0 % |
| Container throughput in thousand TEU | 1,887 | 1,696 | 11.3 % |
Revenue in € million Share of Revenue
29.2 %
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 | 2011 | 2010 | Change |
|---|---|---|---|
| Revenue | 126.7 | 120.2 | 5.4 % |
| EBIT | - 1.0 | 6.2 | – |
| EBIT margin in % | - 0.8 | 5.1 | - 5.9 pp |
| Employees as of 31.12. | 422 | 441 | - 4.4 % |
Revenue in € million
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, advertising, culture and fashion sectors. On the northern banks of the river Elbe, HHLA and FMH Fischmarkt Hamburg-Altona 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 | 2011 | 2010 | Change |
|---|---|---|---|
| Revenue | 31.7 | 29.8 | 6.5 % |
| EBIT | 11.9 | 12.7 | - 6.1 % |
| EBIT margin in % | 37.6 | 42.6 | - 5.0 pp |
| Employees as of 31.12. | 38 | 38 | 0.0 % |
Revenue in € million Share of Revenue 2.4 %
190 Glossary
192 Financial Calender/Imprint
Seaport Terminal Hub
Inland Terminal Hub
Employees
Highlights 2011
Klaus-Dieter Peters Chairman of the Executive Board
In the 2011 fi nancial year, we achieved considerably stronger growth in our Group's throughput and transport volumes than originally antici pated. We also continued to expand HHLA's position in its key markets. This is all the more impressive given that the economy cooled off noticeably in the fourth quarter. Our company's direct market environment was also burdened by the construction of surplus terminal capacity at rival ports in Northern Europe and the strained earnings position of the container shipping lines.
Against this backdrop, we still succeeded in fulfi lling our revenue forecast in full – despite upgrading guidance in the course of the year. At the beginning of 2011, we thought it would also be possible to improve on our operating margin. However, as we announced during the year, this proved unattainable in view of more than 20 percent growth in container throughput with high peak loads and the simultaneous implementation of expansion investments. Despite additional expenses in the form of write-downs, however, we were still able to exceed our slightly downgraded earnings forecast.
Overall, we can be very satisfi ed with the course of business in the past fi nancial year. In a diffi cult market environment, we outpaced our major competitors and recorded signifi cant growth in both revenue and earnings. This encouraging progress is refl ected in our dividend proposal. In view of the disproportionately strong increase in our net profi t for the year after minority interests, the Executive and Supervisory Boards of Hamburger Hafen und Logistik AG (HHLA) will now be proposing an increase of around 18 percent in the dividend at the Annual General Meeting on 14 June 2012. This will mean paying out € 0.65 per market-traded share in the Port Logistics subgroup entitled to dividends for the 2011 fi nancial year. We distributed a dividend of € 0.55 per share in the previous year.
What are the reasons for this success? First of all, the rapid economic recovery seen in the last two years confi rmed our belief that the under-
lying global economic trends remain intact. The integration of the global economy is continuing apace and a growing number of emerging markets are participating in world trade to an ever greater extent. At the same time, the growing international division of labour is prompting a disproportionately large increase in the volume of goods shipped using global transport and logistics chains. This means that maritime logistics, which account for over 90 percent of transcontinental cargo transport, have a key role to play in the further development of the global economy.
Thanks to its advantageous geographical position, Hamburg is the ideal hub for goods fl ows between the economies of Central and Eastern Europe, with their tremendous backlog demand and growth potential, and the rapidly developing overseas regions – from Brazil, India and China to Korea and Vietnam. This was underlined once again last year by the rapid growth in container traffi c via our facilities and transport systems, especially to the aforementioned economic regions.
However, the delay in deepening the river Elbe's shipping channel and the increasingly gloomy economic and sector-specifi c parameters for maritime logistics mean that we can by no means take our market share gains and fi nancial results for granted.
Once again, our integrated business model along the maritime logistics transport chain – from the seaport terminal to customers in the European hinterland – formed the basis for our successful business development. This is especially true in cases where we have complete control over processes by means of our own facilities and rolling stock. Highly integrated and effi cient hinterland systems with excellent terminal services enable us to generate strong synergies and create a genuine win-win situation. Powerful transport systems attract cargo to the seaport terminals and successful seaport terminals drive up the volume of freight for the hinterland systems.
However, no matter how good a business model is, it must be implemented correctly to succeed. In this regard, our company is happy to be judged on its aim of being a leading provider in terms of quality and performance based on its best-in-class technologies and processes. The rapid pace of growth seen in 2011 posed a number of major challenges in this context, especially for our container terminals. The growing number of vessels from the latest generation of mega-ships with space for more than 10,000 standard containers (TEU) went a long way towards driving up peak loads at the terminals. Each time one of these ships berths, we have to handle throughput of up to 12,000 standard containers within 48 hours. To deliver this level of performance, we need constant innovations, process improve ments, and investments in our facilities and steering systems. Examples of such measures in the 2011 fi nancial year include:
External awards confi rm that our efforts have been successful. In December 2011, HHLA was named a "Global Benchmark in Container Terminal Quality Assurance" by the highly respected Global Institute of Logistics. The institute also named our Container Terminal Altenwerder "best in class" for container handling.
However, leadership in technology and performance is not just a question of the right equipment and investments. The ever-changing challenges of 24-hour operation also place great demands on the expertise and fl exibility of our employees. It is their dedication and experience that enables us to manage and optimise our complex facilities and processes with the aid of modern IT tools. A fascinating insight into this work is provided by
the description on pages 18 – 21 of the control centre at our Container Terminal Altenwerder.
Ecological, economic and social targets are often perceived as confl icting aims. In our business model, they are mutually dependent. Together with our high social standards, HHLA's training programmes and preventive healthcare play a crucial role in enabling staff to make such a great contribution towards the company's success. We prove on a daily basis that an ecofriendly transport and logistics chain is generally also superior in commercial and economic terms. With the high amount of added value we create, we also provide important stimuli for economic development at our sites.
We received several awards for our commitment to sustainability in 2011. The acclaimed research centre Fraunhofer Supply Chain Solutions identifi ed HHLA as one of six pioneers in sustainability in the German logistics sector, commending HHLA for its "outstanding level of sustainability". One high-profi le example of innovation in the fi eld of sustainability was the successful completion of the Zero Emissions pilot project last year. As part of this joint initiative with the manufacturer Gottwald Port Technology, we trialled the use of battery-powered electric vehicles for container transport. The automatic guided vehicles used in the project run on electricity alone and can handle loads of up to 60 tonnes – even their batteries are replaced automatically. The trial proved that they are suitable for everyday use. This project was awarded the "Hanse Globe 2011", a sustaina bility prise presented by the Logistics Initiative Hamburg.
Our sustainability strategy forms an integral part of our business model and our reporting. Sustainability issues are discussed at various points throughout this annual report. We also set ourselves a new climate protection target in 2011: by 2020, we want to reduce our specifi c CO2 emissions in container handling by 30 percent compared to our current record set in 2008.
Last year, we invested funds and initiated various measures to lay the foundations for future growth and the further optimisation of our operating processes. All of these steps were taken with a view to long-term success. In this way, we are also investing in our future earnings potential because productivity, reliability and an effi cient combination of pre-carriage and oncarriage systems are increasingly becoming a crucial competitive factor. Our growth strategy con tinues to rest largely on the Group's sound fi nancial structure, high cash fl ow and good liquidity. On top of this, the majority of our 2011 capital expenditure was fi nanced from our own funds. This gave us the freedom to shape our expansion and moder nisation programmes ourselves, without being affected by any turmoil on the fi nancial and credit markets.
In terms of our capital expenditure, the spotlight was on investments and plans to enable our faci lities to cope with further growth in volumes and, crucially, the ever-increasing demands associated with larger vessels. We took steps to ensure that we are ideally placed to handle the next generation of container ships with capacities of 16,000 to 18,000 TEU. To this end, we will expand our existing mega-ship berths and open new ones in the years to come.
We can adjust the rate of our expansion to actual developments in demand to a large extent. Our container terminals in Hamburg alone have the potential to expand from their current combined capacity of approx. 8 million TEU per annum to well over 15 million TEU. In addition to this, we launched another important project to optimise our handling processes in early 2012: "Dual Cycle" enables container gantry cranes to load and discharge simultaneously. Not only does this boost productivity during ship handling, it also improves the capacity utilisation of our yards. The second major focus for capital expendi ture was the further expansion of our hinterland network. We have already started work on an additional terminal in the Czech Republic which will become operational this year.
What can we expect in the 2012 fi nancial year? The economic slowdown was confi rmed at the beginning of 2012. There are numerous uncertainties surrounding further economic developments. Relatively robust growth in Germany and the emerging markets instils a certain degree of confi dence – at the same time, though, a permanent solution to the debt and currency problems is still not in sight. The direct market environment of our container terminals continues to suffer from rising surplus capacity at rival ports in Northern Europe and the diffi cult situation in container shipping. By contrast, swift implementation of the lower river Elbe dredging project would improve our competitive position.
Against this backdrop, any forecast of how business will develop this year is subject to a large number of provisos. If the current trend of considerably slower but consistently positive global economic growth continues, we expect throughput, transportation, revenue and earnings to increase by around 5 percent – based on those projections for global trade and container traffi c available to us at present.
With our strong market position, our standards of innovation and performance, and our crisisproof balance sheet ratios, we are capable of continuing on our sustainable growth path, even in diffi cult conditions. In doing so, we can rely on both the advantages of our integrated business model and the success of our sustainability programme. This combination of strengths will enable us to fulfi l our corporate responsibility. All of this forms an outstanding basis for us to keep charting an exceptionally successful course in a key market for global economic developments – maritime logistics.
Yours,
Klaus-Dieter Peters
Chairman of the Executive Board
3 Dr. Stefan Behn First appointed on 1 May 1996
Responsibility
4 Dr. Roland Lappin First appointed on 1 May 2003
Responsibility
First appointed on 1 January 2003
First appointed on 1 January 2009
growth in container throughput was registered by HHLA terminals in 2011. Excellent terminal per for mance and an exemplary hinterland network contributed signifi cantly towards this leap in growth.
of long-distance container traffi c (over 250 kilometres) to and from the Port of Hamburg is now transported by rail. HHLA's inland terminals and intermodal network play a major role in making this possible.
tons of ore and coal were handled by the highly automated Hansaport in 2011. This was equivalent to approximately 11% of total throughput at the Port of Hamburg.
Unloading a coal ship at the Hansaport bulk cargo terminal
of modern commercial units in the Speicherstadt historical warehouse district have already been developed, renovated or revitalised for new use by HHLA Real Estate. Its work has proven highly successful: 98.9% of total fl oor space has already been let.
the Container Terminal Altenwerder 24 hours a day, 360 days a year
The HHLA Container Terminal Altenwerder (CTA) celebrates its tenth anniversary in 2012. In the control centre of this heavily automated hightech facility, a team of specialists steers terminal operations round the clock. 2011 was a further year of record gures for CTA with awards for quality and sustainability.
Non-stop maximum
performance is
what we do best
28 December 2011, 7 a. m. The early shiftstarts with a rush of activity. No less than ve vessels are vying for space in the four mega-ship berths of the 1.4-kilometre long Ballinkai quay: two smaller feeders for European traf cand three ocean- going vessels V in cluding a large container ship with room for almost 9,000 containers. Wide, bright yellow
strips of light illuminate the working areas of EuropeXs most state-of-theart con tainer terminal. Twelve large gantry cranes with
61-metre jibs are in action V lifting steel containers over the quayside every twelve seconds on average.
Over 80 AGVs (au tomated gui dedvehicles) are also in permanent operation, transporting containers back and forth between the 26 large storage blocks at the centre of the terminal and the quayside gantry cranes. Trucks are coming and going on the land side of the block storage area, and the wide portal cranes spanning the seven 700-metre long sidings at the largecontainer rail terminal also have plenty to do. With 37,000 rail containers per month, the CTA exceededits previous record (set in 2008) by around a third in 2011.
On days like today, the nine members of the control centre team V steering all key aspects of terminal operations V have
their work cut out for them. In addition to the shift leader, the team includes two specialists for the water side. They keep
an eye on the container gantry cranes and the AGVs. A ship planner supports them and maintains direct contact with the vessels. Meanwhile, their hinterland colleagues look after the storage blocks, the railway station and truck handling. A second shift leader updates planning for the next few days. Last but not least, the process controllers are responsible for the three complex auto matic systems which control the con tainer gantry cranes, the AGV eet and the storage blocks.
At the heart of AltenwerderAs high-tech terminal: automated storage blocks with space for approximately 30,000 containers
^If all the ships arrive on schedule and both our automatic systems and the technical equipment run without faults, the shift leader has nothing to do,_ jokes shift leader Markus Riepenhusen, ^but thatXs rarely the case_. ThatXs why ^creativity, a talent for improvisation, and experience_ are needed up here in the control
centre to steer the terminal round the clock, 360 days a year, in three overlapping shifts of eight and a half hours each. So what does a talent
for improvisation have to do with automation? Gerlinde John, Head of Terminal Development at CTA, says: ^The integratedterminal system consists of interconnected automatic systems which handle a large number of processes simultaneously. At the same time, they have to react quickly to unforeseeable occurrences._ The secret is to keep the whole system running smoothly and ef ciently. ^We can only do that with the help of the control centre team._
On this particular morning, the control centre crew face an immediate challenge: the shift programme has to be revised so that a delayed ocean-going vessel can set sail during the ideal time slot. An extra
gantry crane is allocated to the ship in addition to the four originally set aside for it. This has a domino effect on other processes and means
The key to our success is that all 637 employees are continually improving the terminal
the schedule for the adjacent feeder also has to be revised. But thatXs not the only change being made: the software tool ^Quay Commander_ also modi es the automatic program for the AGVs. The delayed vessel is given priority. The ve gantry cranes can now work even faster. ^Markus, the workshop team want to access storage block 24 to take a look at the small crane,_ says the hinterland col
league. Markus Riepen husen has a quick look at the multicoloured bar chart listing jobs to be done in block 24, then makes his decision: ^They canXt start until 1 p.m. I want to nish processing the feeder in berth 3 rst._
Riepenhusen and his co-workers have planned some 2,200 container movements for the current shift V an ambitious schedule. On top of this, they have to deal with delayed ships, a wrongly declared container and a last-minute client request. Unforeseeable occurrencesare not the exception; they are the rule. For this reason, Riepenhusen likes to compare his role to working on a dynamic jigsaw puzzle which is constantly changing but where all the pieces still have to t together. Terminal developer Gerlinde John adds proudly: ^Our potential differs completely from that of conventional terminals. Non-stop maximum performance is what we do best._ With a capacity of well over 100 containers an hour for mega-ships, the terminal can process
container giants with handling volumes often in excess of 5,000 boxes within around 48 hours. Throughput data such as these are one of the reasons why CTA is regularly ranked EuropeXs top-performing terminal.
The HHLA Container Terminal Altenwerder celebrates its tenth anniversary in summer 2012 and remains ^a global leader and top in Europe,_ says CTA Managing Director Oliver Dux. Although other terminals have followed the trend towards automation in recent years, none of them have reached CTAXs level yet. ^The key to our success is that all 637 employees are continually improving the terminal,_ emphasises DuxXs fellow Managing Director Ingo Witte and adds: ^We always examine the whole process for weaknesses and bottlenecks._ This has helped them to constantly improve stability and reliability in recent years and regularly introduce further innovations. Both Dux and Witte stress that the terminal has ^already exceeded our original high expectations by far_.
CTA does not intend to rest on its laurels, though. Having recently succeeded in teaching the system to transport two smaller containers on one AGV at the same time, the team is now tackling the ^Dual Cycle_ project. Launched in early 2012, it aims to further boost productivity by loading and unloading simultaneously where possible in future V thus making much more ef cient use of container gantry cranes and storage blocks. But even when this has been achieved, there is still no rest in sight. As Gerlinde John explains: ^Potential for improvement can be found everywhere._
High tech and environmental protection go hand in hand at the HHLA Container Terminal Altenwerder (CTA). The low-emission terminal helps protect our climate while also making sparing use of the resource ^space_. The key to success is the terminalXs high degree of automation. This explains why most of the energy consumed is electrical power, generated from renewable sources. The short distances and smart terminal manage ment also ensure a high degree of energy ef ciency. Batterypowered AGVs (automated guided vehicles) with the numbers 85 and 86 are the latest success story to emerge from the CTAXs ^green ef ciency_ drive. They completed the ^Zero Emissions_ pilot project with ying colours in September 2011 and shortly afterwards received the prestigious ^Hanse Globe 2011_ sustainability award. With a payload of 60 tons and batteries which can be replaced in just 5 minutes by an automatic battery-changing station V following 17 hours of continuous operation V the battery-powered AGVs have set new economic and ecological records in CTAXs demanding operating environment.
container storage right by the tracks
Like a gigantic heart, the Metrans terminal in Prague pumps goods from the North European seaports to the Czech Republic, Hungary and Slovakia V and back again. The rate at which container trains enter and leave the terminal is getting faster. In 2011, Metrans raised the number of containers transported by 12 percent.
The Czech RepublicXs global trade hub is on the southern outskirts of Prague. Located just 14 kilometres from the historic city centre, the hub is a labyrinth of brightly coloured steel containers covering an elongated, approximately 250,000 m2 site on PragueXs Uhŀínăves
industrial estate. It has seven sidings with a total length of almost ten kilometres. Towering over them are ve portal cranes, 26 metres high and
some 80 metres wide, which the HHLA railway subsidiary uses to process approximately 10,000 standard containers (TEU) every week.
Thanks to the global popularity of containers, an intelligent production concept and above-average economic growth in Central and Eastern Europe, Metrans once again enjoyed strong growth in 2011: the rail company grew transportation by 12 percent to more than 580,000 TEU.
With its excellent rail links to the North European seaports, Prague has not only established one of EuropeXs largest
inland terminals over the past few years but has also become a cargo handling hub for the economies of Central and Eastern Europe. With
its 750 employees, Metrans is the market leader in the Czech Republic, Slovakia and Hungary for container hinterland transportation to and from the German seaports.
More than 70 shuttle trains alone travel back and forth between the Port of Hamburg and Prague-Uhŀínăves every week. Like a conveyor belt, they transport
Metrans terminal in Prague-Uhŀínăves: the container hub for South-Eastern Europe import and export goods and thus ensure the Czech Republic is directly con nec ted to global trade. The hub in Prague pools consignments before for-
warding them to the client by rail or road V and vice versa. With its own eet of 360 heavy goods vehicles, the com-
pany guarantees that goods are reliably delivered to the customer. Road deliveries through the terminal have increased more than vefold since 1998.
Intelligent management is crucial for large transportation volumes. Metrans uses highly productive handling processes. This is illustrated by the fact that the Prague hub has container bays underneath the portal cranes, right next to the sidings. Crane operators can therefore lift the boxes off the carriage and deposit them for temporary storage in one go, before the containers are loaded back onto a train or truck for the next stage of their journey. This eliminates the need for complex stacking and restacking, thus saving time and money and
About two thirds
of GermanNCzech cargo
goes by rail
enabling Prague to handle large volu mes of cargo. The hub has an annual capacity of almost 700,000 TEU. With its de-
pot for empty containers and its repair workshop for carriages and containers, the hub also boasts facilities which make the handling process even more ef cient. These extra services eliminate the need for empty containers to be transported long distances back to the client and mean that damage to boxes or carriages can be repaired quickly, thus reducing waiting times.
The foundation for further growth has therefore been laid. ^Hamburg is the most important port for the economies of Central and Eastern Europe,_ says Jiri Samek, founder and Managing Director of Metrans. The journey from Hamburg to Prague takes about twelve hours, making it the quickest route to a seaport from the Czech Republic. Metrans generates about half its annual revenue on this route. The Czech market leader has already transported more than two million containers along this line since the company was established in 1991. About two thirds of all cargo transported between Germany and the Czech Republic already goes by rail.
With its hub in Prague-Uhŀínăves and its highly ef cient shuttle trains, Metrans provides an exemplary service for container traf c in the seaportsX hinterland. The shuttles have several advantages. Firstly, they run back and forth between the seaport and the hinterland hub more frequently than passenger services. Secondly, the wagons are always arranged in the same way, eliminating the complex job of shunting individual carriages and thus saves even more time and money.
More than 70 fully-laden Metrans shuttle trains travel back and forth on the HamburgNPrague line alone every week
High-performance hubs in the seaportsX hinterland and daily shuttle trains not only help cope with the future growth in cargo volumes. They also provide a greater incentive for switching container traf c from road to rail. A much better solution for the environment. According to a study by the Dutch research institute NEA, the average carbon footprint for electric rail transportation is just under two grams per ton-kilometre, compared to 59 for heavy goods vehicles. This means that transporting a container by rail instead of road reduces CO2 emissions by over 39 kilograms per ton of cargo on the approximately 690-kilometre journey from Hamburg to Prague. Together with its rail operators Metrans, Polzug and Transfracht, HHLA successfully organises intelligent and sustainable container transportation between the quayside at the Port of Hamburg and customers in the European hinterland. Hub terminals such as the Metrans hub in Prague and the Polzug hub in Poznán, Poland, act like the hub of a wheel with numerous spokes converging on them. Shuttles carry unsorted containers from the port to the hub, where they are organised. They are then transhipped from incoming trains to connecting services V for example by the Metrans rail crane operator on the right V which will take them to their destination region or are transported by truck to the recipient.
Thirdly, the company uses its own locomotives and specially built carriages which can be loaded with as many as four 20-TEU containers. Transportation, planning and handling at the hub terminal in Prague-Uhŀínăves are managed by complex in-house software. ^Our IT
expertise is what makes Metrans so successful. WeXre particularly proud of it,_ explains Sa mek. A further success factor is
the com panyXs integration into the HHLA Group. This means, for example, that many shuttle trains are directly loaded and unloaded at HHLAXs high-performance container terminals in the Port of Hamburg and thus directly connected to overseas traf c and global goods ows. In Prague, the Czech rail operator processes an average of two trains a day which were loaded at the HHLA Container Terminal Altenwerder alone.
^HHLA has enabled us to grow our business and strengthen our ties with the Port of Hamburg,_ comments Samek. This successful partnership was already established 18 years ago. Samek has ambitious goals for the future: Metrans is constantly expanding its network.
Our IT expertise is
what makes Metrans
so successful
In addition to the hub in Prague, the company operates three other terminals inthe Czech Republic and two in Slovakia. Me-
trans is set to open a second hub terminal this year in the Czech city of úeská Tŀebová V approximately 180 kilometres east of the capital.
Prague-Uhŀínăves never stands still. The inland terminal handles containers around the clock, 365 days a year, with more than 200 freight trains bringing or collecting new cargo every week. It is truly a pulsating hub.
43-year-old foreman Uwe Soltwisch ensures that large-scale equipment at the Container Terminal Altenwerder is t for use and works in an increasingly ef cient and eco-friendly manner.
Five large, powerful container gantry cranes swiftly lift steel containers weighing several tons out of the hold of the Prague Express. They donXt have much time to process the 8,749-TEU vessel. Thousands of containers have to be shifted before the ship with HamburgXs crest on its bow can leave the Container Terminal Altenwerder (CTA). If one of the gantry cranes were to fail now, it would jeopardise this tight schedule.
Inconspicuous tubes some ten centimetres in length make sure this doesnXt happen. These vibration sensors, tted by Uwe Soltwisch to the main hoisting gear of the gantry cranes, are connected to the cranesX control system and immediately show if the vibrations exceed tolerated levels. This would indicate a damaged bearing in the DC motor. If the sensor data give cause for alarm, a member of staff at the Service Center Altenwerder (SCA) V the terminalXs workshop V checks the motor and prevents it from failing.
Preventive maintenance is the key word for project team member and technical dispatcher Soltwisch. ^Our main task is to keep the availability of equipment at the CTA as high as possible,_ explains Soltwisch, who was born in Mecklenburg and has been involved in crane maintenance at the port for 20 years now. He started working at the SCA in 2002 and has taken numerous opportunities for extra training V from cable ser vicing to project management. For the nal paper of his course in technical management, he is planning a project on intelligent maintenance. ^Sensors are much more ef cient for work which used to be done manually,_ he explains. A magnetic induction method, for example, uses a magnetic eld created by a coil to check whether there are any broken wires within cables. Soltwisch believes this has the potential to make signi cant cost savings: ^If this shows that a cable only needs replacing after twelve or 15 years rather than ten, cables can be renewed less often, saving money and conserving resources._
Arno Schirmacher, 43, Head of Central HR Management, operates a system of targeted talent management. Giving staff the right developmentopportunities is good for both employees and HHLA.
As we move forwards, we need more and more employees who are keen to embracenew challenges and undergo further training.
We have to train staff for many parts of the Group ourselves. We encourage both specialist and managerial career paths and utilise all of the GroupXs structures to do this. We want to make optimum use of all development opportunities as well as identifying and fostering as much talent as possible. We coordinate staff develop ment measures centrally.
Yes, we launched the training course to become a certi ed ship planner in 2011. This scheme not only helps us meet our short and long-term manpower needs, but also enhances our internal career paths. For our junior managers, we rolled out a tailored staff development programme to train and nurture both soft and hard skills. Before employees are accepted into any development scheme, their potential is always analysed in a potential assessment centre.
The assessment centre forms the basis for analysing staff potential. The results
are reviewed together with the employees in question. Based on this assess ment, we decide whether they are more suited to a specialist or managerial career.
29-year-old ship planner Anna Stille trained for her dream job at HHLA. She now determines the opti mumprocessing sequence and loading position for con tainers at the Container Terminal Tollerort.
The straddle carrier operator places a white reefer container full of marzipan from Lübeck exactly below the container gantry craneand releases the locking mechanism. He quickly drives the long-legged carrier back to the yard at the Container Terminal Tollerort (CTT) V the smallest of HHLAXs terminals in Hamburg. A ship planner has already decided which box he will pick up next and exactly where the reefer he just unloaded will be stored in the hold of the ship taking the marzipan to Dubai.
Ship planners ensure that even the largest vessels are loaded and unloaded smoothly and ef ciently. So it is no wonder that such specialists are in great demand all over the world and are becoming increasingly hard to nd. When HHLA advertised a training course for prospective ship planners in early 2011, forwarding agent Anna Stille applied straight away. ^In my work at the CTT up to then, I had mainly got to know the hinterland processes. The extra training course gave me the opportunity to learn about seaborne handling V the heart of the terminal,_ she explains.
Together with nine other HHLA employees, Stille learnt all the important facts about container ships, sensitive goods and stowage planning during the theoretical phase of her course. She returned to Tollerort for her practical training, and has been working there as a ship planner since she nished the course. ^I was a little nervous when I prepared the plans for stowing my rst containers in a real ship and the schedules for the straddle carriers and container gantry cranes,_ says Stille, who is very aware of how much responsibility she now has. She soon joined the team planning for the largest vessels currently handled at Tollerort. These ships, operated by the shipping company Cosco, hold 10,000 or 13,000 standard containers. ^The display for these vessels stretches across three monitors,_ Stille explains, swiftly turning her head from left to right. ^I really enjoy working as a ship planner. ItXs like I imagined it would be V just even more varied._
51-year-old IT divisional manager Frank Winkenwerder develops IT solutions for the HHLA container terminals in Hamburg. One of his major projects at present is to optimise truck handling.
From his of ce at the Container Terminal Burchardkai, Frank Winkenwerder has a good view of the Köhlbrand Bridge and can thus easily monitor one of his current challenges V is the Port of HamburgXs bottleneck free for the 6,000 to 8,000 containers going in and out of the HHLA terminals by truck every day?
As head of the container information systems, Winkenwerder shapes the IT landscape for the HHLA container terminals. The interfaces between the terminals and the various modes of transport play an important role in this system. In order to im prove truck handling at the port (known as ^haulage_), HHLA launched its ^Haulage 2.0_ project in 2011. Coordinated by Winken werder, the projectXs main aim is to enhance datanetworking by using suitable IT tools. For without the accompanyingdata, no container would ever reach its intended recipient. ^Haulage 2.0_ is already making a difference: new self-service terminals have been installed for truckers at the entrance to HHLAXs three terminals in Hamburg. It takes the lorry drivers about 130 seconds to enter data in their own language using a touch screen V dramatically reducing processing times.
In the next stage of development, video cameras are to be used to recognise container numbers and truck registration plates. HHLA employees will then be able to check incoming containers conveniently on a monitor. This means the vehicle will be able to drive right across the site without having to stop for handling.
^Processes are the trickiest task,_ emphasises Winkenwerder. He has therefore initiated a eld study in conjunction with the most important players to gain a complete picture of truck movements at the port. What currently stops both containers and data from owing freely? The survey results may help Winken werder to reduce tailbacks V also on the Köhl brand Bridge.
In July, Cosco Glory became the rst vessel with a carrying capacity of 13,000 standard containers (TEU) to be handled at the HHLA Container Terminal Tollerort. Work had been under way for several years to equip the new mega-ship berth 5 with ve new super post-panamax gantry cranes to cater for the new generation of container ships. ^We are proud to have processed our rst new-generation container mega-ship at CTT with the Cosco Glory. Many years of hard work, investment and preparation went into achieving this moment,_ explained CTTXs Managing Director, Dr. Thomas Koch. By installing the super post-panamax gantry cranes at CTT, HHLA has further improved HamburgXs ability to ef ciently process the worldXs largest container vessels and thus paved the way for even greater productivity at Container Terminal Tollerort.
HHLA Real Estate has created attractive show rooms and high-quality office units spanning some 6,000 square metres in Block Q of the historical warehouse district. The historic warehouse space underwent exemplary redevelopment following dialogue with tenants and in close collaboration with the building preservation authorities. It was previously used by traditional carpet importers. The rst tenants from the fashion and design industry moved into their new, inspiring premises in Block Q in April.
Hamburg Energie has installed one of HamburgXs largest solar power units on the roof of Logistics Centre Altenwerder. Chairman of the Executive Board of HHLA, Klaus-Dieter Peters (left), and Managing Director of Hamburg Energie, Dr. Michael Beckereit, ipped the switch on the new photovoltaics system in July. It consists of almost 4,000 thinlayer modules, which will generate some 460,000 kilowatt-hours of CO2 -free electricity every year.
Thanks to easy-to-use self-service terminals introduced in July, truckers can now check in standard containers themselves at HHLAXs container terminals in Hamburg. The process takes approximately 130 seconds. This reduces waiting times during peak hours and means that more trucks can be processed.
In September, HHLA and the rail operator Polzug Intermodal opened a new hub terminal near the Polish city of Poznán. The cutting-edge site allows daily shuttles to be run between the North Euro pean seaports and Poznán for the rst time. This reduces the journey time between Hamburg and Poznán alone by about a third V from 18 to 12 hours. Market leader Polzug Intermodal pools railfreight transport from all the North European seaports V especially Hamburg and Bremerhaven V at the terminal in Western Poland for distribution throughout the country on the spokes of its hub network. In addition to its central position for WestVEast traf c, the site in Poznán has the advantage of high local freight volume as it is located in a dynamic economic region.
The Fraunhofer SCS research centre has identi ed HHLA as one of six ^pioneers_ in sustainability in the German logistics sector. This is the result of the sustainability index published by Fraunhofer SCS in May, which praises the fact that HHLAXs sustainability concept is ^deeply anchored in its strategic approach and plays an important part in the companyXs values_. Its measures ^lead to a systematic improvement in the situation on sustainability_.
Electric mobility
A breakthrough for electric mobility: in a pilot project in Altenwerder, containers weighing up to 60 tons were transported using vehicles powered solely by batteries for the rst time. A battery replacement station operated using green electricity recharges the batteries that drive these automated transport vehicles. The project was successfully completed in September and received the Hanse Globe 2011 sustainability prize in December.
transport logistic
HHLA presented its services at MunichXs biennial ^transport logistic_ V the logistics industryXs leading trade show V from 10 to 13 May. Panel discussions featuring top speakers and numerous one-to-one discussions helped explain port logistics to some 51,000 people from 134 different countries. Visitors were particularly interested in HH-LAXs integrated business model, the industrial transport chains which connect the European hinterland, and successful projects in the eld of sustainability.
Hamburg was awarded the German Cruise Prize and the title ^Port of the Year 2012_ in September. 118 vessels with over 300,000 passengers docked in the city in 2011. The team from Hanse atic Cruise Centers V a joint venture of HHLA subsidiary Unikai Hafenbetrieb and AIDA Cruises V ensured that the ships were processed
smoothly at the Hamburg Cruise Centers Altona (photo) and HafenCity. 164 passenger vessels are registered for 2012. One of the yearXs highlights for Hamburg as a cruise ship port will be the launching ceremony for the AIDAmar V during the portXs birthday celebrations.
There were strong fl uctuations on the world's stock markets throughout 2011, whereby the over all picture was dominated by a downward trend in the second half of the year. At the beginning of the year, the general mood was infl uenced by contrasting factors – from optimistic economic expectations and high levels of liquidity seeking investment opportunities to the political unrest in North Africa, rising energy and commodity prices, and the ongoing eurozone's debt problems. Healthy corporate profi ts initially buoyed confi dence, exerting an upward push on indices and helping stock prices reach their highest level for almost three years. This trend came to an abrupt end in mid-March, when the devastating earthquake and nuclear disaster in Japan triggered massive losses around the world. Relatively quickly, however, positive economic data rekindled hope of a continuing economic upturn, prompting a rapid market recovery and further share price increases well into summer. In the third quarter, growing fears of a slowdown in global economic growth and the escalating eurozone debt crisis caused a drastic shift in market sentiment letting quotations on the international stock exchanges fall to their lowest levels for the
year. Although summit resolutions and coordinated economic measures to contain Europe's debt crisis helped stop the decline over the following months, Germany's two main indices closed with considerable losses. The DAX lost 14.7 % and ended 2011 at 5,898 points, while the mid-cap MDAX index, which includes the HHLA share, fell by 12.1 % to 8,898 points.
After markedly outperforming cross-market indices in the fi nal quarter of the previous year, the HHLA share entered 2011 at its highest valuation level since 2008. As the year progressed, however, it was burdened more than most by the sentiment regarding the world trade development, the precarious situation in container shipping and speculation about delayed public infrastructure projects. As a result, the share already reached its year-high of € 35.81 on 3 January, before political discussions concerning the port development plan in Hamburg and decreasing sea freight rates in container shipping led to uncertainty on the capital markets early in the year. With the Danish shipping company Mærsk ordering even larger container freighters with a carrying capacity of up
Source: Datastream
to 18,000 TEU, investors and fi nancial analysts were reminded of the urgent need to dredge the Elbe's navigation channel. Aggravating factors continued to grow as concerns about the consequences of the earthquake and nuclear disaster in Japan focused on cyclical sectors and com panies involved in Asian trade. The market response to strong throughput growth and market share gains published by HHLA in the second quarter was therefore all the more positive and helped buoy the share price. However, the adverse earnings situation among shipping lines, weak export data from China and growing fears about the debt situation in both the eurozone and the USA soon determined the general stock price development. Moreover, the lack of news regarding the dredging of the Elbe's shipping channel fuelled investor concerns even further. Due to its strong correlation with general expectations for the economy and world trade, the HHLA share came under particularly strong pressure as the escalating debt crisis triggered fears of another recession halfway through the year. Even the announcement of persistently strong growth in HHLA's key performance indicators throughout the fi rst half failed to bring relief. Although market conditions eased in the fourth quarter, market sentiment and with it the stock price development were clouded due to downward corrections of numerous macr-
oeconomic forecasts. As a result, the HHLA share dropped to a year-low of € 19.65 on 22 November. The share price only rallied towards the end of the year, when the European Commission issued a positive statement regarding the environmental impact of dredging the Elbe's shipping channel. Its conclusion that widening and deepening the waterway is justifi ed by compelling reasons in the predominant interest of the public and that environmental measures to compensate for this project were more than adequate, helped buoy the HHLA share in the last weeks of the year. However, it was unable to compensate for the downward trend over the year as a whole. The HHLA closed on 31 December at € 22,83, altough 16.2 % above the year low, but still 33.9 % down on the previous year. As illustrated by the yearon-year decrease of almost a third in the HHLA daily share's trading volume (average: 109,740 a day), this was not caused by a massive sell-off. Instead, predominantly smaller orders to sell met with restricted buying interest, due primarily to the general environment. At year-end, the market capitalisation of the listed subgroup Port Logistics totalled approx. € 1.6 billion. Despite the general mood on the stock markets, HHLA succeeded in increasing earnings per share, a key fi gure of rele vance to investors and analysts, by 20.2 % to € 1.20 in the 2011 fi nancial year.
| in € | 2011 | 2010 |
|---|---|---|
| Closing price at year-end 1 | 22.83 | 34.55 |
| Highest share price 1 | 35.81 | 35.39 |
| Lowest share price 1 | 19.65 | 24.11 |
| Performance in % | - 33.9 | 28.0 |
| Average daily trading volume 2 | 109,740 | 154,626 |
| 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 | 0.65 | 0.55 |
| Dividend yield in % | 2.8 | 1.6 |
| Market capitalisation as of 31.12. (Class A shares) in € million | 1,597.2 | 2,417.6 |
| Price-earnings ratio as of 31.12. | 19.6 | 38.4 |
| Earnings per share | 1.20 | 1.00 |
XETRA
2 XETRA, Frankfurt / Main, Hamburg
Dividend proposal for 2011 fi nancial year
Shareholder Structure as of 31.12.2011
Source: Investment Conferences and Roadshows in 2011
In the face of heavily fl uctuating stock prices, widespread uncertainty amongst capital market participants and at times contradictory economic and industry data, it became increasingly import ant to ensure quick response times, comprehensive information and an open dialogue with investors and fi nancial analysts. As a consequence, HHLA continued to pursue and expand its IR activities in line with these targets over the past year. In order to serve the needs of both institutional and private investors, HHLA attended a number of investor conferences in the key fi nancial cities of Frankfurt, London and New York as well as private investors' forums in Germany. These initiatives were supplemented by roadshows in further fi nancial centres throughout continental Europe, the UK and the USA. At the same time, investors were met for talks at the company's head offi ce in Hamburg and the Executive Board presented the business development at an investors' fair and during quarterly teleconferences. To further improve the convenience and effectiveness of its online information, HHLA restructured parts of its investor relations website in the year under review and extended it considerably. In response to the increased use of social media, HHLA also started using communication platforms such as Twitter to raise awareness of recent and future announcements by the company. Along with volume and earnings trends at HHLA, the company's shareholders were particularly interested in the expansion of handling capacity in Northern Europe and its impact on the com petitive situation. The fi nancial situation at shipping lines and the formation of new consortia and alliances were also discussed intensely. Interest focused also once again on central infrastructure projects, such as
the dredging of the Elbe shipping channel, the maintenance needed for the Kiel canal, and improvements to key rail routes. Of particular interest throughout the year, however, was the assessment of further macroeconomic developments. Acclaim for HHLA's communications came in the form of an improved IR quality rating in 2011. Year on year, the company climbed seven places in the index produced by the German magazine "Capital" in conjunction with the "Society of Investment Professionals in Germany" (DVFA). Of 50 MDAX companies, it now ranks among the best 15. The main medium used for investor relations communication performed even better: in the high-profi le competition for the best annual report conducted by "manager magazin" and the University of Münster, HHLA's report succeeded in claiming a spot among the top 10 MDAX reports following work to develop its content further.
Despite the adverse stock exchange climate, HHLA's shareholder base proved largely stable in 2011. The Free and Hanseatic City of Hamburg remained the largest shareholder with a 68.5 % stake. According to the voting rights notifi cations submitted to HHLA by the end of 2011, no single free fl oat investor owned more than 3 % of the outstanding shares. Some 73.5 % of the freely traded shares were held by institutional investors (previous year: 74.0 %), while approx. 26.5 % of were held by private shareholders (previous year: 26.0 %). With around 35,000 registered shareholders in total, HHLA's nominal capital remained widely distributed. In regional terms, the largest free fl oat shareholders are based primarily in Germany, the UK, the USA and other countries, especially in continental Europe.
The number of analysts who monitor HHLA's business development and issue corresponding reports and estimates decreased slightly year on year, from 26 to 24, due mainly to increased fl uctuation and structural changes in the banking sector. This still guarantees extensive coverage for an MDAX company. The majority of analysts recommends the HHLA share as a buy or a hold. They cite ongoing economic growth, the dredging of the Elbe waterway and additional effi ciency gains as the key value drivers. Analysts who recommend selling the share primarily highlight the risks associated with the delay in deepening the Elbe and increasingly fi erce competition between ports in Northern Europe, including the Baltic region.
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 wide spectrum of opinion. The Group therefore remains in close contact with all fi nancial analysts and constantly strives to expand the number of independent studies on its business development.
The fourth Annual General Meeting since HHLA's initial public offering in 2007 was held in Hamburg on 16 June 2011. Approximately 1,000 shareholders attended, representing 82 % of nominal capital (previous year: 78 %). The resolutions proposed by the Supervisory Board and the Executive Board were all adopted with large major ities by the shareholders present. These included a motion to increase the dividend by 37.5 % to € 0.55 per dividend-bearing share in the listed subgroup Port Logistics (Class A share). HHLA distributed dividends totalling € 38.5 million (previous year: € 28.0 million). This corresponded to a distribution ratio of 55.1 % of the Port Logistics subgroup's net income for the year after minority interests.
At the 2011 Annual General Meeting, the Executiveand Supervisory Boards will propose a further 18.2 % increase in the dividend to € 0.65 per Class A share based on the result posted for 2011. This would take the total payout to € 45.5 million. There with, HHLA continues to pursue its dividend policy of distributing at least 50 % of the subgroup Port Logistics' relevant net profi t for the year to its shareholders.
Underweight
An overview of financial analysts who cover HHLA can be found on www.hhla.de
| Type of shares | No-par value registered shares | ||
|---|---|---|---|
| ISIN International Security Identifi cation Number | DE000A0S8488 | ||
| SIC | A0S848 | ||
| Symbol | HHFA | ||
| Stock exchanges | Regulated market: Frankfurt / Main, Hamburg Open market: Berlin, Düsseldorf, Hanover, Munich, Stuttgart |
||
| Stock exchange segment | Prime Standard | ||
| 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 |
Current and future company announcements can be found on the Twitter channel HHLA_IR.
Use the QR code:
Prof. Dr. Peer Witten Chairman
In the 2011 fi nancial year, the Supervisory Board fulfi lled the responsibilities entrusted to it by law, the company articles of association and rules of procedure, and the German Corporate Governance Code. It carefully and regularly monitored the Executive Board's management of business and provided advice on the company's further strategic development as well as on important individual measures.
At the Supervisory Board's meetings, as well as in written and verbal reports, the Executive Board provided the Supervisory Board with prompt, regular and comprehensive information, especially on the situation of HHLA and the Group, corporate planning, fundamental issues of company policy and strategy, investment plans and personnel. Further focal points were risk management, the internal accounting control system and HHLA's compliance system. The Chairman of the Supervisory Board was regularly in touch with the Executive Board and was informed about HHLA's current business situation, signifi cant transactions and risk management. The Supervisory Board was involved in all decisions of major signifi cance for HHLA and the HHLA Group. On the basis of its own thorough examination and in-depth discussions with the Executive Board, the Supervisory Board approved all measures submitted to the Supervisory Board for approval by the Executive Board in accordance with the law, the articles of association and the Executive Board's rules of procedure.
In the 2011 fi nancial year, the Supervisory Board held four routine meetings and two special meetings, and adopted two resolutions 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.
At each ordinary meeting, the Supervisory Board dealt with the current development of business and the HHLA Group's position in detail. On each occasion, the Executive Board gave a detailed report, focusing in particular on revenue, results and the personnel situation for the Group and the individual segments, as well as on the fi nancial position and the Group's further strategic and structural development. Furthermore, individual meetings concentrated especially on the following items:
The fi nancial statements meeting held on 25 March 2011 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 2010 fi nancial year. Representatives of the auditors were present at this meeting. They reported on the main results of their audit and were available to answer questions. The Supervisory Board discussed the Executive Board's proposal on the appropriation of profi t and the proposal made by the Audit Committee regarding the choice of auditor for the 2011 fi nancial year. Other matters discussed included the agenda for the 2011 Annual General Meeting, the Supervisory Board's report to the Annual General Meeting, the corporate governance report, and the extension of Dr. Stefan Behn and Dr. Roland Lappin's contracts of employment and their appointments as Executive Board members for a further fi ve years.
At its meeting on 1 June 2011, the Supervisory Board dealt with issues including approving the granting and revocation of powers of procuration.
At the September meeting, the Supervisory Board made the committee appointments necessitated by the election and appointment of two new Supervisory Board members, Michael Pirschel and Torsten Ballhause. Torsten Ballhause was elected to the Finance Committee and the Audit Committee in place of Uwe Schröder. Michael Pirschel was also elected to the Finance Committee and the Audit Committee as Dr. Bernd Egert's successor. Thomas Mendrzik was elected to the Personnel Committee to replace Uwe Schröder and Dr. Bernd Egert was voted onto the Arbitration Committee in place of Peter Wenzel.
The last meeting in the reporting period was held on 8 December, when the Supervisory Board mainly considered the budget for 2012 – which it duly approved – and the medium-term corporate planning for 2013 to 2016. Another focus of the Supervisory Board meeting was HHLA's risk management system and, in particular, the results of the risk inventory. The appointments of Klaus-Dieter Peters, Chairman of the Executive Board, and Executive Board member Heinz Brandt were extended for a further fi ve years. Additionally, the Supervisory Board discussed Dr. Sebastian Jürgens' decision to retire from the Executive Board and approved the proposal to terminate his Executive Board contract by mutual consent effective 31 December 2011. The Executive Board and the Supervisory 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.
At the special meetings on 19 January and 29 April, the Supervisory Board focused primarily on a possible M & A transaction. The meeting on 29 April was also devoted to discussing an extension of the employment contracts of Klaus-Dieter Peters, Chairman of the Executive Board, and Executive Board members Heinz Brandt and Dr. Sebastian Jürgens for a further fi ve years. An addition to the agenda for the Annual General Meeting was also discussed. The Supervisory Board used the written circulation procedure twice: to change the composition of the Personnel Committee in March (replacing Peter Wenzel with Dr. Bernd Egert) and to supplement the agenda for the Annual General Meeting in April.
The Supervisory Board has set up a total of six committees: the Finance Committee, the Audit Committee, the Real Estate Committee, the Personnel Committee, the Nomination Committee and the Arbitration Committee. They prepare the resolutions of the Supervisory Board in full council and, if permitted, make decisions on behalf of the Supervisory Board in certain cases. With the exception of the Nomination Committee, all of the committees include an equal number of shareholder and employee representatives. For details on the composition of the committees see Board Members and Mandates, page 50 et seq.
The Finance Committee met a total of four times in the reporting period: in March, May, August and November 2011. In addition to the reporting on the Group's fi nancial results and the Group's general fi nancial position, the main focal points of its work included deliberations concerning a guarantee in favour of HHLA Intermodal Polska Sp. z o.o. (August meeting). The Finance Committee's December meeting was mainly devoted to its comprehensive preliminary review of the budget for 2012 and the medium-term planning for 2013 to 2016.
The Audit Committee convened four times in the past fi nancial year. The March meeting focused on an in-depth discussion and examination of HHLA's annual fi nancial statements, consolidated fi nancial statements and management reports. The committee also recommended that the Supervisory Board should submit a pro posal to the Annual General Meeting regarding the choice of au ditor for the 2011 fi nancial year. Representatives of the auditors were present when the annual fi nancial statements were discussed. They reported on the results of the audit and were available to answer questions. According to the auditor's representatives, there were no circumstances demonstrating any bias of the auditor. The Interim Report for the fi rst quarter of 2011 and the report on the work done by Internal Audit were the main items discussed at the May meeting. The Head of Internal Audit attended this meeting in a reporting capacity and provided comprehensive information. At its third meeting, in August, the Audit Committee was primarily concerned with the Interim Report for the fi rst half of 2011. The meeting in November focused on the Interim Report for the third quarter of 2011, a discussion of focal points for the audit and the contract to audit the 2011 annual and Consolidated Financial Statements, a discussion of the fi ndings of the 2011 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. HHLA's Compliance Offi cer attended this meeting in a reporting capacity; he was also present at the Audit Committee's other meetings, where he spoke about his role, kept the committee abreast of current developments, and was available to answer questions. The Audit Committee acquired the necessary declaration of independence from the auditors. The Chairman of the Executive Board and the Chief Financial Offi cer regularly attend the meetings of both the Finance Committee and the Audit Committee.
The Real Estate Committee met twice in the 2011 fi nancial year. It focused on the general development of business and the discussion and audit of HHLA's annual fi nancial statements, including the separate fi nancial statements of the S division, and of the Consolidated Financial Statements and the management reports for the 2010 fi nancial year (March meeting) as well as the budget for 2012 and the medium-term planning for 2013 to 2016 (November meeting), each in relation to the Real Estate subgroup (S division).
The Personnel Committee met fi ve times in the year under review (March, April, June, October and December 2011). It concentrated on Executive Board matters, especially preparing and formulating the extension of the Executive Board members' employment contracts for a further fi ve years in the fi rst six months, and the termination of Dr. Sebastian Jürgens' Executive Board contract by mutual consent at the end of the year.
The Nomination Committee convened twice in the 2011 fi nancial year. Its meetings in April dealt with the selection of candidates and the submission of proposals to the Supervisory Board for its own election proposals for the Annual General Meeting. The committee put forward Michael Pirschel and two substitute members as candidates to the Supervisory Board. In the 2011 fi nancial year, the Nomination Committee also started with the preselection of candidates for the 2012 Supervisory Board election. Its deliberations took account of the target for diversity on the Supervisory Board which was set in December 2010. The Arbitration Committee did not meet in the reporting period.
Following each meeting, the chairpersons of the committees reported back to the Supervisory Board about the activity of each committee and their fi ndings, and made recommendations on resolutions to be taken.
The declaration of compliance with the German Corporate Governance Code was discussed in detail and prepared together with the Executive Board at the Audit Committee meeting on 30 November 2011. 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 8 December 2011. This has been made permanently available to the general public on the HHLA website www.hhla. de/corporategovernance. The Supervisory Board does not include any former members of the company's Executive Board.
No confl icts of interest regarding members of the Executive Board or the Supervisory Board requiring immediate disclosure to the Supervisory Board arose in the reporting year.
Details of the declaration of compliance and corporate governance at HHLA have been provided by the Executive Board and Supervisory Board in the Corporate Governance Report for 2011. See also Corporate Governance Report, page 41 et seq.
Ernst & Young GmbH, Wirtschaftsprüfungsgesellschaft, Hamburg, were elected as auditors for the fi nancial statements and for the auditor's review of the abridged fi nancial statements and the interim management report for the fi rst half of the fi nancial year 2011 at the Annual General Meeting on 16 June 2011 and instructed by the Supervisory Board. The auditors carried out an audit of HHLA's annual fi nancial statements as provided by the Executive Board, including the divisional fi nancial statements for the A division (Port Logistics subgroup) and the S division (Real Estate subgroup) presented as part of the Notes, in line with the provisions of the German Commercial Code (HGB), the Consolidated Financial Statements including the subgroup fi nancial statements for the A and S divisions in accordance with International Financial Reporting Standards (IFRS), and the management reports for HHLA and the Group. They issued an unqualifi ed opinion with respect to the foregoing.
The HHLA Executive Board also prepared a report on company transactions with related parties for the 2011 fi nancial year in line with Section 312 of the German Stock Corporation Act (AktG). The auditors audited this report, delivered a written report on their fi ndings and, having no objections to make, gave the following unqualifi ed opinion:
"On the basis of our audit and in our professional opinion we confi rm that
In accordance with Section 4 (5) of the articles of association, the Executive Board of HHLA also prepared a report on the relationship between the A division and the S division in the 2011 fi nancial year. The auditors audited this report, delivered a written report on their fi ndings and, having no objections to make, gave the following unqualifi ed opinion:
"On the basis of our audit and in our professional opinion we confi rm that
Any expenses and 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 2012. In the fi nancial statements meeting of the Supervisory Board on 28 March 2012, the Supervisory Board examined in detail the aforementioned fi nancial statements and reports as well as the proposal for appropriating profi ts and discussed them thoroughly. Representatives of the auditors were also present at this meeting; they reported on the main results of their audit and were available to answer questions. According to the auditor's representatives, there were no circumstances demonstrating any bias of the auditor. In addition to the audit of the annual fi nancial statements, the auditors completed a review of the interim fi nancial statements and advised the company on tax issues to a limited extent. The auditors gave comprehensive information to the Supervisory Board regarding the nature and extent of these services.
Having discussed the course and the results of the audit in detail, and after an in-depth review of the Auditors' Reports and the Executive Board's proposal for appropriating distributable profi t, and on the basis of its own review and evaluation of the annual fi nancial statements including the divisional fi nancial statements, the Consolidated Financial Statements including the subgroup fi nancial statements, the management reports for HHLA and the Group, the report on transactions with related parties, the report on the relationship between the A and S divisions and the Executive Board's proposal for appropriating distributable profi t, the Supervisory Board approved the results of the audit. The Super visory Board concluded that in the fi nal analysis it had no objections to make and, at the fi nancial statements meeting held on 28 March 2012, approved the fi nancial statements, including the divisional fi nancial statements, the Consolidated Financial Statements including the subgroup fi nancial statements, the manage ment report and the Group Management Report as recommend ed by the Audit Committee and the Real Estate Committee. HHLA's annual fi nancial statements for the 2011 fi nancial year have therefore been adopted. The Supervisory Board also concluded that following its review it had no objections to make to the Executive Board's statements on related parties and on the relationship between the A and S divisions. After carrying out its own audit, the Supervisory Board concurred with the Executive Board's proposal on the appropriation of profi t.
Peter Wenzel, former State Secretary of the Hamburg Ministry for the Economy, Transport and Innovation, was appointed as a member of the Supervisory Board until the end of the 2011 Annual General Meeting by Hamburg Local Court. The shareholders at the Annual General Meeting on 16 June 2011 elected Michael Pirschel, Departmental Head at the Hamburg Ministry for the Economy, Transport and Innovation, to succeed him as a member of the Supervisory Board for the period up to the end of the Annual General Meeting which passes a resolution discharging the Board for the 2011 fi nancial year. Hamburg Local Court also appointed Torsten Ballhause, ver.di trade union secretary for the Harbours work group, as an employee representative on the Supervisory Board. He succeeds Uwe Schröder, who retired from his position on the Board in June 2011. Mr. Ballhause's appointment expires at the end of the next Annual General Meeting. The Supervisory Board would like to thank Mr. Schröder and Mr. Wenzel for their good work and dedication.
Dr. Sebastian Jürgens resigned as a member of the HHLA Executive Board effective 31 December 2011 by mutual consent. Klaus-Dieter Peters, Chairman of the Executive Board, will assume Dr. Jürgens' duties for the time being. The appointments of Dr. Stefan Behn and Dr. Roland Lappin (each commencing on 1 May 2011), the Chairman of the Executive Board Klaus Dieter-Peters and Heinz Brandt (each commencing on 1 January 2012) were all extended for fi ve years.
The Supervisory Board would 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 in the 2011 fi nancial year.
Hamburg, 28 March 2012
The Supervisory Board
Prof. Dr. Peer Witten Chairman
Responsible and transparent corporate management geared towards sustainable value has always been an essential foundation of HHLA's commercial success. For this reason, HHLA's Supervisory Board and Executive Board expressly support the German Corporate Governance Code ("the Code") and the objectives and purposes which it pursues.
In accordance with the stipulations of German stock corporation law, HHLA has a dual system of management with an Executive Board and a Supervisory Board as management bodies, both of which have their own defi ned areas of competence. This system is characterised by having separate personnel to carry out the management and supervision functions: the Executive Board manages the company on its own responsibility, while the Supervisory Board monitors the Executive Board and discusses relevant matters with it. Simultaneous membership of both bodies is not permissible. HHLA's Executive Board and Supervisory Board work closely together for the company's benefi t in an atmosphere of mutual trust.
The Supervisory Board oversees the Executive Board's management of the company, advises it on company management, and is involved in decisions of fundamental importance. Decisions of fundamental importance must be approved by the Supervisory Board. It also decides on the composition of the Executive Board. The examination and approval of the annual fi nancial statements is another of the Supervisory Board's main tasks.
In accordance with the company's articles of association, Sections 95 and 96 of the German Stock Corporation Act (AktG) and Section 7 of the German Co-Determination Act (MitbestG), the 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 required to give notifi cation of any confl icts of interest which arise and how they are being handled in its report to the Annual General Meeting.
The company has arranged for D&O insurance with an appropriate deductible for members of the Supervisory Board.
The Supervisory Board carries out its work both in full council and in individual committees. The Supervisory Board has adopted own rules of procedure, which also outline the committees' responsibilities. In order to fulfi l its duties as effi ciently as possible, the Supervisory Board has currently constituted the following six committees:
I The Audit Committee monitors accounting processes and the audit of fi nancial statements, particularly the independence of the auditor and the additional services provided by the auditors. The committee prepares the Supervisory Board's resolution proposal to the Annual General Meeting on the election of the auditor and, after these have been elected by the Annual General Meeting, awards the audit assignment for the consolidated and annual fi nancial statements. It also deals with the fee agreements and determines which areas the audits should focus on. In addition, it concerns itself with the effectiveness of the internal accounting control system, the risk management system, the internal audit system and the compliance system. As an independent member of the Supervisory Board, the Chairman of the Audit Committee, 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, please see page 50 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 organisation. These tasks include, in particular, steering the Group and managing its fi nancing, developing a personnel strategy, appointing and developing managers and representing the company before the capital markets and the general public.
HHLA's Executive Board consisted of fi ve members during the reporting period and currently consists of four members. For a list of members, see page 50 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 pos ition, risk management and compliance. The Executive Board must notify the Chairman of the Supervisory Board without undue delay of any important events of fundamental signifi cance for the assessment of the position and development or the management of the Group. These include operational malfunctions and illegal actions which disadvantage the company, for example. Certain actions and transactions of fundamental importance by the Executive Board require the approval of the Supervisory Board in accordance with the Executive Board's 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 Executive Board and the Supervisory Board again dealt with matters relating to Corporate Governance in great depth during the 2011 fi nancial year. On 8 December 2011, they jointly issued the following declaration of compliance for 2011 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 starting 15 December 2010 (the date on which the previous declaration of compliance was issued), HHLA complied with the recommendations of the German Corporate Governance Code ("the Code") in the version dated 26 May 2010 and published on 2 July 2010 with the following exceptions. Furthermore, HHLA shall comply with the Code in the future with the following exceptions:
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, 8 December 2011
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 Cor porate Governance at HHLA. The management team in each corporate unit is therefore responsible for working to achieve compliance with the regulations that are relevant for their fi eld of activity and area of responsibility. Workfl ows and processes must be structured in line with these regulations. The cornerstone of HHLA's compliance management system is a code of conduct, which formulates overriding principles on topics with special relevance for compliance, such as conduct in the competitive environment, the prevention of corruption, discrimination and confl icts of interest, and how to deal with sensitive corporate information, especially insider information. See www.hhla.de/compliance. The overall coordination of the compliance management system is performed by a Compliance Offi cer, who reports directly to the Chief Financial Offi cer and synchronises his or her activities closely with those of the Internal Audit and Risk Management departments. In 2011, further extensive steps were taken to enhance HHLA's compliance management system. These included stepping up preventive work, e.g. by producing and updating Group guidelines and conduct guidance, systematically analysing compliance risks, and training staff at HHLA companies in Germany and abroad on the code of conduct and special issues, such as preventing corruption or observing occupational health and safety requirements. The Audit
Committee also monitored the development of the compliance management system in the reporting period by means of regular reports from the Executive Board and the Compliance Offi cer. The system will be further extended in the future.
Sustainability has been an integral part of HHLA's business model since the company was established. Port terminals provide an ecologically sound link between global goods fl ows on the one hand and hinterland networks and logistics centres on the other. HHLA's actions are characterised by responsibility towards its employees, the environment and society as a whole and by taking responsibility for its business activities. See also Sustainability, page 73 et seq.
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 organisation'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 have a rather regional and site-related focus. 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 Supervisory Board are obliged to disclose any confl icts of interest to the Supervisory Board as a whole, especially confl icts which may arise as a result of an advisory role or seat on a management body involving customers, suppliers, creditors or other 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. In addition to this, the Nomination Committee and the Supervisory Board will place a special focus on the diversity target during the current process of selecting potential Supervisory Board members for the next period of offi ce commencing in mid-2012 and when making corresponding election proposals to the Annual General Meeting.
In the 2011 fi nancial year, the company did not receive any notifi cations regarding directors' dealings with HHLA shares.
As of 31 December 2011, 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 of the management report. See also page 97 et seq.
In accordance with the statutory provisions, it is designed to identify signifi cant risks in advance so that they can be minimised, diversifi ed, transferred or averted, ensuring the continued existence of the HHLA Group and its operating companies. The risk strategy and risk policies of HHLA form the primary guidelines for dealing with risks in the HHLA Group. In performing its duties, the Risk Management department receives material support from the Controlling department, the Compliance Offi cer and the Internal Audit department.
HHLA informs capital market participants and interested members of the general public comprehensively about the position of the Group and important company developments, particularly by means of its fi nancial reporting (Annual Report and Interim Reports), press conferences for analysts and fi nancial press conferences, dialogue with analysts and the press, press releases and ad hoc announcements as required, and its Annual General Meetings. As a permanently available and up-to-date communication medium, the website www.hhla.de provides all the relevant information in both German and English. In addition to comprehensive information about the HHLA Group and the HHLA share, it contains a fi nancial calendar which gives an overview of the main events. Any enquiries over and above this from shareholders, investors and analysts should be addressed to the Investor Relations department.
Shareholders exercise their rights, in particular their voting rights, at the Annual General Meeting. According to the articles of association, the Annual General Meeting is held in Hamburg, another major German city or the seat of a German stock exchange within the fi rst eight months of each fi nancial year. Each share entitles its holder to one vote at the Annual General Meeting. There are no shares with multiple voting rights, no preference shares and no caps on voting rights.
Shareholders may exercise their voting rights at the Annual General Meeting in person, by appointing a representative of their choice or by giving voting instructions to a proxy designated by the company. The articles of association also authorise the Executive Board to provide for shareholders to cast their votes in writing or by means of electronic communication without attending the Annual General Meeting (postal vote). The invitation to the Annual General Meeting includes explanations of the participation conditions, the voting procedure (including proxy voting) and the rights of shareholders. In addition, the company has a telephone hotline for shareholders' questions. The reports and documents required by law for the Annual General Meeting, including the annual report, are published on the company's website at www.hhla.de/agm together with the agenda. The information on attendance at the Annual General Meeting and the voting results can likewise be found on the company's website after the Annual General Meeting.
HHLA prepares its Consolidated 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 2011 fi nancial year – Ernst & Young GmbH, Wirtschaftsprüfungsgesellschaft, Hamburg – for the Chairman of the Audit Committee to be informed immediately of any possible grounds for exclusion or bias arising during the audit, insofar as these are not rectifi ed without delay. The auditor should also report immediately on any fi ndings or incidents arising from the audit of the fi nancial statements which are of signifi cance for the Supervisory Board's remit. Furthermore, the auditor is to inform the Supervisory Board and/ or record in its report if – when conducting the audit – it identifi es facts which indicate that the declaration of compliance issued by the Executive Board and Supervisory Board as per Section 161 of the German Stock Corporation Act (AktG) is incorrect. The audit conducted includes an extended audit as stipulated under Section 53 of the German Budgetary Procedures Act (HGrG). This requires an audit and assessment of the propriety of the company's management and its fi nancial situation as part of the audit of the annual fi nancial statements.
The following Remuneration Report is part of the Group Management Report.
Following preparatory work by its Personnel Committee, the Super visory Board in its entirety is responsible for setting 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. As mentioned in the previous year's Remuneration Report, following the introduction of the German Act on the Appropriateness of Management Board Remuneration (VorstAG), the Supervisory Board approved a new remuneration system adjusted to the requirements of the Act at its meeting in December 2010 with the support of an independent remuneration consultant. This system has been in use since 1 January 2011.
Executive Board members receive their fi xed annual salary as twelve monthly payments. This fi xed salary includes benefi ts in the form of non-monetary compensation. These consist of the right to use an appropriate company car (for business and private purposes) and the payment of insurance premiums by the company. The members of the Executive Board pay tax on these benefi ts as components of their remuneration.
The performance-related bonus is usually set using a three-year assessment period as a basis. For the 2011 fi nancial year – the fi rst year using the new remuneration system – the last two fi nancial years will be used instead. The calculation is based on the average earnings before interest and taxes (EBIT) for the last three years (before additions to pension provisions and reduced by any extraordinary income from the disposal of real estate and companies), the average return on capital employed (ROCE) and the achievement of targets relating to environmental issues (reduction of the carbon footprint of each container handled and transported) and social issues (broken down into training and continuing professional development, health and employment) in the same period.
| Performance-unrelated payments | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Basic salary | Supplementary payments |
Performance-related components |
Total remuneration | Appropriation to pension provisions |
||||||
| 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |
| Klaus-Dieter Peters | 465,000 | 350,000 | 13,451 | 13,521 | 543,586 | 350,214 | 1,022,036 | 713,735 | 258,532 | 242,391 |
| Dr. Stefan Behn | 325,000 | 275,000 | 12,188 | 12,237 | 380,132 | 175,107 | 717,321 | 462,344 | 157,582 | 147,176 |
| Heinz Brandt | 325,000 | 275,000 | 13,594 | 12,734 | 380,132 | 175,107 | 718,726 | 462,841 | 185,272 | 163,997 |
| Dr. Sebastian Jürgens | 325,000 | 275,000 | 231,902 | 8,955 | 325,000 | 175,107 | 881,902 | 459,062 | 90,772 | 79,528 |
| Dr. Roland Lappin | 325,000 | 275,000 | 7,665 | 5,906 | 380,132 | 175,107 | 712,798 | 456,013 | 99,001 | 91,201 |
| Total | 1,765,000 | 1,450,000 | 278,800 | 53,353 | 2,008,983 | 1,050,642 | 4,052,783 | 2,553,995 | 791,159 | 724,293 |
Unlike in the previous year, additions to pension provisions only include the service and interest expenses attributable to the reporting year.
The fi gure for the previous year has been restated accordingly for ease of comparison.
Target ranges were set for each of the components used in the calculation for the period from 2011 to 2013. Achieving these targets triggers the payment of the relevant bonus. When making these calculations, roughly equal weight is given to EBIT on the one hand and the above-mentioned sustainability components on the other. Variable remuneration is capped at 150 % of the basic salary. It is paid out once the annual fi nancial statements have been approved.
In addition to this, there is a pension commitment for each Executive Board member. Pensions are paid to former Executive Board members either after fi ve or eight years' service on the Executive Board if they leave the Board for reasons unrelated to the Board member, or as a result of incapacity or due to reaching retirement age. Pensions consist of a percentage of the entitlement salary, which in turn is based on the annual basic salary. This percentage is between 35 and 50 %. Several different forms of income are taken into account for this, such as earnings from self-employment or employment and, in some cases, income from statutory pensions and related benefi ts from public funds.
Surviving spouses of Executive Board members receive a widow(er)'s pension of 55 to 60 % of the pension entitlement and children receive an orphan's allowance of 12 to 20 % of the pension. Should the pension entitlement have been suspended or no longer apply, transitional or interim pay will apply for a limited period on the basis of the annual basic salary.
After leaving the Executive Board on 31 December 2011, Dr. Jürgens will receive his contractually agreed basic salary until 31 December 2013 at the latest. The sum of € 325,000 has been stipulated as the basis for calculating his performance-related pay. If the employment relationship ends before 31 December 2013, Dr. Jürgens
will receive compensation equivalent to 42 % of the remaining remuneration payable until 31 December 2013. Only half of this amount will be payable if Dr. Jürgens starts working for a direct competitor in Hamburg before 30 June 2012. The provision of € 223,000 already accrued for Dr. Jürgens' benefi ts was paid out to him during the period under review. See also page 47, Individual Remuneration of Executive Board Members.
The service contracts valid in the reporting period include a compensation provision relating to change-of-control or comparable circumstances. This entitles Executive Board members to receive their remuneration entitlements as a lump sum for the remaining duration of their respective contracts, discounted by 2 % per annum, should their service contracts be terminated prematurely in such circumstances. This does not affect their pension entitlements. Should the service contracts be terminated prematurely for another reason without good cause, the payment of compensation by the company shall be limited to the remaining term of the contract.
The members of the Executive Board were not granted any loans or similar payments. The members of the Executive Board received total remuneration of approximately € 4.1 million for their services in the 2011 fi nancial year (previous year: € 2.5 million), representing an increase of 11.8 % on the amount paid in the 2008 fi nancial year. Former members of the Executive Board and their surviving dependants received total payments of € 781,666 (previous year: € 820,880). Total provisions of € 10,339,784 (previous year: € 11,691,935) have been formed for pension obligations to former members of the Executive Board and their surviving dependants.
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 com pany's fi nancial position and results. The current remuneration clause was adopted at the General Meetings held on 24 September and 18 October 2007. The members of the Supervisory Board receive fi xed remuneration of € 10,000 per fi nancial year. The Chairman receives three times this amount and the Vice Chairman is paid one and a half times the basic fi gure. This remuneration increases by 35 % when a dividend is paid to the holders of the company's Class A shares for the fi nancial year in question. Supervisory Board members who belong to a committee receive an additional € 2,500 per
committee per fi nancial year, while the Chairman of the respective committee receives € 5,000, but altogether no more than € 10,000. 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 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. Other than the remuneration payable to the employee representatives under their contracts of employment, the members of the Supervisory Board did not receive any other payment for additional services rendered. The total remuneration paid to members of the Supervisory Board amounted to € 291,148 (previous year: € 291,395).
| Fixed remuneration |
Variable remuneration |
Remuneration for committee work |
Meeting fee | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |
| Prof. Dr. Peer Witten | 30,000 | 30,000 | 10,500 | 10,500 | 5,000 | 5,000 | 2,750 | 2,500 | 48,250 | 48,000 |
| Wolfgang Rose | 15,000 | 15,000 | 5,250 | 5,250 | 2,500 | 2,500 | 2,500 | 2,250 | 25,250 | 25,000 |
| Torsten Ballhause | 3,890 | 0 | 1,362 | 0 | 1,616 | 0 | 1,000 | 0 | 7,868 | 0 |
| Dr. Bernd Egert | 10,000 | 10,000 | 3,500 | 3,500 | 7,753 | 7,500 | 2,500 | 3,250 | 23,753 | 24,250 |
| Carsten Frigge | 0 | 5,945 | 0 | 2,081 | 0 | 1,486 | 0 | 1,500 | 0 | 11,012 |
| Holger Heinzel | 10,000 | 10,000 | 3,500 | 3,500 | 0 | 0 | 1,500 | 750 | 15,000 | 14,250 |
| Jörg Klauke | 10,000 | 10,000 | 3,500 | 3,500 | 5,000 | 5,000 | 3,500 | 3,000 | 22,000 | 21,500 |
| Dr. Rainer Klemmt-Nissen | 10,000 | 10,000 | 3,500 | 3,500 | 10,000 | 10,000 | 4,000 | 3,250 | 27,500 | 26,750 |
| Thomas Mendrzik | 10,000 | 10,000 | 3,500 | 3,500 | 3,308 | 2,500 | 2,500 | 1,500 | 19,308 | 17,500 |
| Arno Münster | 10,000 | 10,000 | 3,500 | 3,500 | 10,000 | 10,000 | 5,250 | 5,000 | 28,750 | 28,500 |
| Michael Pirschel | 5,452 | 0 | 1,908 | 0 | 1,616 | 0 | 1,000 | 0 | 9,977 | 0 |
| Peter Wenzel | 4,575 | 3,589 | 1,601 | 1,256 | 651 | 788 | 1,000 | 1,000 | 7,827 | 6,633 |
| Uwe Schröder | 4,959 | 10,000 | 1,736 | 3,500 | 3,719 | 7,500 | 2,750 | 4,500 | 13,164 | 25,500 |
| Walter Stork | 10,000 | 10,000 | 3,500 | 3,500 | 5,000 | 5,000 | 3,250 | 3,500 | 21,750 | 22,000 |
| Jörg Wohlers | 10,000 | 10,000 | 3,500 | 3,500 | 5,000 | 5,000 | 2,250 | 2,000 | 20,750 | 20,500 |
| Total | 143,877 | 144,534 | 50,357 | 50,587 | 61,164 | 62,274 | 35,750 | 34,000 | 291,148 | 291,395 |
All fi gures exclude VAT.
Chairman
Businessman, Hamburg Former member of the Otto Group's Executive Board
Vice Chairman Banker, Hamburg Executive at ver.di (trade union) in Hamburg Other Supervisory Board mandates
Dipl. Wirtschafts- und Arbeitsjurist (HWP) (business and employment law graduate), Hamburg
Trade union secretary for Harbours work group, Hamburg Other Supervisory Board mandates
I HHLA Container Terminals GmbH, Hamburg
Physicist, Winsen (Luhe)
State Secretary at the Hamburg Ministry for the Economy, Transport and Innovation
* Seats on statutory supervisory board or comparable supervisory bodies at domestic and foreign companies.
Graduate in business administration (Dipl.-Kaufmann), Hittfeld Director of Finance and Controlling at HHLA
Port technician, Hamburg Vice Chairman of HHLA works council
Other Supervisory Board mandates
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
Port technician, Hamburg Chairman of the works council at HHLA and the Group works council
HHLA ANNUAL REPORT 2011
I HHLA Personal-Service-Gesellschaft mbH, Hamburg
Departmental head at the Hamburg Ministry for the Economy, Transport and Innovation
Trade union secretary, ver.di Hamburg
Logistics manager, Hamburg
Former chairman of the Executive Board of NAVIS Schifffahrtsund Speditionsgesellschaft AG, Hamburg
I DIHS-DAKOSY Interessengemeinschaft Hamburger Spediteure GmbH, Hamburg
Banking services professional, Hamburg Former State Secretary at the Hamburg Ministry for Economic and Labour Affairs
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) Torsten Ballhause (since 5 September 2011) Dr. Bernd Egert (until 5 September 2011) Jörg Klauke Michael Pirschel (since 5 September 2011) Uwe Schröder (until 30 June 2011) Walter Stork
Jörg Wohlers (Chairman) Arno Münster (Deputy Chairman) Torsten Ballhause (since 5 September 2011) Dr. Bernd Egert (until 5 September 2011) Jörg Klauke Dr. Rainer Klemmt-Nissen Michael Pirschel (since 5 September 2011) Uwe Schröder (until 30 June 2011)
Dr. Rainer Klemmt-Nissen (Chairman) Thomas Mendrzik (Deputy Chairman) Dr. Bernd Egert (until 8 December 2011) Arno Münster Michael Pirschel (since 8 December 2011)
Prof. Dr. Peer Witten (Chairman) Arno Münster (Deputy Chairman) Dr. Bernd Egert (since 5 April 2011) Thomas Mendrzik (since 5 September 2011) Wolfgang Rose Uwe Schröder (until 30 June 2011) Walter Stork Peter Wenzel (until 5 April 2011)
Prof. Dr. Peer Witten (Chairman) Dr. Bernd Egert (since 5 April 2011) Walter Stork Peter Wenzel (until 5 April 2011)
Prof. Dr. Peer Witten (Chairman) Dr. Bernd Egert (since 5 September 2011) Arno Münster Wolfgang Rose Peter Wenzel (until 16 June 2011)
Chairman Forwarding merchant, Hamburg Appointed: 2003 Areas of responsibility
* Seats on statutory supervisory board or comparable supervisory bodies at domestic and foreign companies.
I HHLA Container-Terminal Altenwerder GmbH, Hamburg
Graduate in business administration (Dipl.-Kaufmann), Hamburg Appointed: 1996
Appointed: 2009
I Hansaport Hafenbetriebsgesellschaft mit beschränkter Haftung, Hamburg (until 9 December 2011)
I IPN Inland Port Network GmbH & Co. KG, Hamburg (until 9 December 2011)
Graduate in industrial engineering (Dipl.-Wirtschaftsingenieur), Hamburg
Appointed: 2003
I SC HPC Ukraina, Odessa, Ukraine
Course of Business and Economic Situation
Container Segment
Please see page 180 et seq. for a full list of HHLA's shareholdings, listed by business sector.
Hamburger Hafen und Logistik AG (HHLA) is a leading company in the European seaport transportation industry. As an integrated handling, transport and logistics provider, the HHLA Group offers services along the logistics chain between overseas ports and their European hinterland. Since its foundation, HHLA's activities have also included the development and letting of properties in Hamburg. HHLA runs the Group as a strategic management holding company. Its operations are carried out by 34 domestic and seven foreign subsidiaries which make up the consolidated group. In order to simplify the Group structure, several affi liates were merged while one has been withdrawn from the scope of consolidation in the 2011 fi nancial year. See also no. 3 in the Notes to the Consolidated Financial Statements, page 132.
No other signifi cant legal or organisational changes were made to the company structure in the reporting period.
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 Port Logistics subgroup, although according to International Financial Reporting Standards (IFRS) it does not constitute a separate segment. The Holding division is responsible for strategic corporate development, the central management of resources and processes, and the provision of shared services for the operating companies. It also includes the properties specifi c to HHLA's port handling business and the Group's fl oating crane operations.
Through its subgroup Port Logistics, HHLA is one of the leading port logistics companies in the European North Range, i.e. the ports between Hamburg in Germany and Le Havre in France. The geographical focus of its commercial activities is on the Port of Hamburg and its hinterland. The Port of Hamburg is a major international hub for container transport by sea and land, with an optimal hinterland link to the economies of Central and Eastern Europe, Scandinavia and the Baltic region.
The subgroup Real Estate includes those HHLA properties which are not specifi c to port handling, i.e. the properties in Hamburg's historical warehouse district (Speicherstadt) and at the fi sh market Hamburg-Altona. The performance and fi nancial result of the Real Estate subgroup, which also follows urban development objectives, are represented by the Class S shares. These shares are not traded on the stock exchange and are held solely by the Free and Hanseatic City of Hamburg (FHH). Under a separate agreement, the FHH municipal authority is responsible for indirectly assuming any losses for the subgroup Real Estate.
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.
In 2011, the Executive Board of HHLA comprised fi ve members, whose areas of responsibility are defi ned by their specifi c tasks and operating segments.
Fields of Responsibility
Executive Board Members
| 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 and Controlling |
||
| I Corporate Communications |
I Information Systems |
I Purchasing and Supplies/ Materials |
I Logistics Segment |
I Investor Relations |
||
| I Corporate | I Internal Audit | |||||
| Development I Sustainability |
I Legal and Insurance |
I Real Estate Segment |
||||
| I Health and Safety in the Workplace |
* until 31.12.2011
Dr. Sebastian Jürgens retired from the Executive Board of HHLA by mutual consent effective 31 December. The Chairman of the Executive Board, Klaus-Dieter Peters, has assumed his responsibilities until further notice.
The Supervisory Board consists of twelve members in total, with six representing the shareholders and six representing the employees. See also Board Members and Mandates, page 50.
The Container segment pools the Group's container handling operations and is its largest business unit in terms of revenue and results. The Group's activities in this segment consist primarily of handling container ships (the loading and discharging of containers) and transferring containers to other carriers (rail, truck, feeder ship or barge). HHLA operates three high-performance container terminals in Hamburg (Altenwerder, 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 (CTO). 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 Metrans, Transfracht 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 distances 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, fruit 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 equates 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 historical warehouse district (Speicherstadt), 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 engineering.
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 landbound pre- and onward-carriage systems.
Sea freight shipping as a whole is 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 standardised 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. The development of many emerging economies is closely linked to their export business. In turn, the consumer markets and manufacturing opportunities offered by these countries are becoming increasingly important for the industrialised nations.
The relevant market for port services along the Northern European coast between Hamburg and Le Havre (the North Range) is characterised by its high density of ports. Competition is currently strongest between the major North Range ports of Hamburg, being HHLA's main hub, Bremen/ Bremerhaven, Rotterdam and Antwerp.
Other handling sites – such as Zeebrügge, Southampton and Felixstowe – are considerably smaller in terms of their local freight volume and the size of their catchment areas. At present, the Baltic Sea ports are primarily served by feeder traffi c operating via central distribution points in the North Range (hub-and-spoke system). Overseas services docking directly at the ports compete with this network system. Expansion projects – notably the new terminal being built in Wilhelmshaven (JadeWeserPort near Bremerhaven) and the extension of Rotterdam's harbour (Maasvlakte 2) – will gradually increase the amount of handling capacity available on the market in the next few years.
Depending on economic trends and the resulting development in demand, this may lead to more intense competition, especially for freight volume with greater geographical fl exibility, such as seaborne feeder traffi c.
by container throughput, 2011
Source: Port Authorities
by shipping region in the port of Hamburg, 2011
Source: Hamburg Hafen Marketing e.V.
split into key classes of goods, 2011
| in million tonnes | Incoming | Outgoing |
|---|---|---|
| Food and stimulants | 6.7 | 6.8 |
| Agricultural and forest products |
7.2 | 3.8 |
| Chemical products | 5.9 | 10.3 |
| Textiles and leather goods | 2.4 | 1.2 |
| Electronic products, machinery |
4.5 | 5.5 |
| Ores, stones and soils | 10.6 | 0.6 |
| Iron, steel and non-ferrous metals |
3.9 | 3.9 |
| Glassware and porcelain | 1.8 | 1.9 |
| Vehicles | 1.5 | 2.1 |
| Waste | 1.0 | 1.4 |
| Mineral oil products | 5.3 | 2.9 |
| Wooden articles, paper and cardboard |
3.1 | 2.3 |
| Coal, crude oil and natural gas | 9.8 | 0.2 |
| Furniture, jewellery, instruments |
1.6 | 1.0 |
| Miscellaneous items and groupage cargo |
1.9 | 3.3 |
| Total | 67.2 | 47.2 |
Source: Statistics Offi ce North
by container throughput, 2011
| 1. | Shanghai, China | 31.7 |
|---|---|---|
| 2. | Singapore | 29.9 |
| 3. | Hong Kong, China | 24.4 |
| 4. | Shenzhen, China | 22.6 |
| 5. | Busan, South Korea | 16.1 |
| 6. | Ningbo, China | 14.8 |
| 7. | Guangzhou, China | 14.2 |
| 8. | Los Angeles / Long Beach, USA | 14.0 |
| 9. | Qingdao, China | 13.0 |
| 10. | Dubai, United Arab Emirates | 13.0 |
| 11. | Rotterdam, Netherlands | 11.9 |
| 12. Tianjin, China | 11.6 | |
| 13. | Port Kelang, Malaysia | 9.6 |
| 14. | Kaohsiung, Taiwan | 9.6 |
| 15. | Hamburg, Germany | 9.0 |
| 16. | Antwerp, Belgium | 8.6 |
| 17. Tanjung Pelepas, Malaysia | 7.5 | |
| 18. | Xiamen, China | 6.5 |
| 19. | Dalian, China | 6.4 |
| 20. | Bremerhaven, Germany | 5.9 |
Source: AXS Alphaliner
The Container segment benefi ts from the Port of Hamburg's position as the most easterly North Sea port, which makes it the ideal hub for the entire Baltic region and for hinterland traffi c to Central and Eastern Europe. In addition to this, 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 throughput of 9.0 million standard containers (TEU), Hamburg reassumed its position as Europe's second-largest container port behind Rotterdam in 2011. 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 company's perspective.
After Chinese ports, in particular, have risen to occupy leading places on account of their massive growth in recent years, Hamburg ranks 15th in the list of the world's leading international ports. Consignments to and from Hamburg often originate from, or are destined for, China.
In the Container segment, HHLA competes directly with other terminal operators in Hamburg and additional locations in Northern Europe. Primary competitive factors – apart from pricing – are the reliability and speed of ship hand ling, and the scope and quality of container handling services. Other factors affecting the terminal operators' competitive position are the port's geographical position, its hinterland links and its accessibility from the sea.
In Hamburg, HHLA maintained its position as the largest container handling fi rm with a total throughput volume across all segments of 6.8 million TEU in 2011. A good 75 % of container traffi c (previous year: 70 %) at the Port of Hamburg was handled by HHLA. HHLA's terminals also recorded the strongest growth in volumes within the North Range. Among the major North Range ports, their market share rose to 19.3 % (previous year: 17.4 %). This was due to signifi cantly stronger demand on trade routes which traditionally contribute major throughput volumes – i.e. from and to Asia and Eastern Europe – and strong growth in the North America shipping region. HHLA benefi ted from improving its range of services for handling ultra large vessels and coordinating feeders, while high ship operating
costs (especially increased bunker prices) helped to highlight the port's geographical advantage as the year progressed. See also Course of Business, Container Segment, page 84.
The Intermodal Segment strengthens HHLA's market position by offering a complementary range of seaport-hinterland traffi c services. In particular, HHLA utilises the advantages of the Port of Hamburg's rail infrastructure – Europe's most important rail traffi c hub. The affi liates which transport containers by train compete with other rail operators in Germany and abroad, but also with other carriers such as trucks and, in some cases, feeder ships. As the rail infrastructure is for the most part publicly owned, various authorities guard against discrimination in both access and usage fees. These include the Federal Network Agency and the Federal Railway Authority in Germany as well as corresponding bodies abroad and at EU level. Against this background, key competitive factors include the density of the available network, the frequency of departures, opportunities for freight pooling and storage in the hinterland, the geographical distance to destinations, on-schedule operation and infrastructural capacity. The Metrans Group – part of the HHLA rail network – has steadily expanded its market position as a leading rail operator for intermodal transportation from Hamburg, Bremerhaven, Koper and Rotterdam to the Czech and Slovak Republics and Hungary. Polzug is an established provider of rail-bound transport services from Hamburg, Bremerhaven and Rotterdam to the Central and Eastern European hinterland (primarily Poland and the CIS) and ultimately Central Asia. Proprietary inland terminals play a major role in HHLA's service offering in Eastern Europe and give the company a signifi cant competitive edge. They enable the use of more productive shuttle trains with shorter
transit times and allow the effi cient pooling of rail freight to and from the port. This is distributed and collected using a hub-and-spoke model centring on facilities such as those in Prague and Poznán. Transfracht – also part of the HHLA rail network – has established itself as a leading provider of intermodal transportation from Hamburg and Bremerhaven to the German-speaking world. The fi rm operates numerous train connections within Germany, to and from Austria and to Switzerland. In the delivery and collection of containers by truck, the Group's affi liate Container-Transport-Dienst CTD has built on its sound market position in the greater Hamburg region by means of a joint venture with the major trucking company EKB Container Logistik and now offers services throughout Germany. See also Course of Business, Intermodal Segment, page 85.
The Logistics Segment serves various market sectors, some of them highly specialised. Via Hansaport, for example, HHLA has a stake in Germany's largest seaport terminal for handling iron ore and coal. With its fruit and refrigeration centre, HHLA is also one of the most up-to-date and high-performance providers of fruit handling for the Northern European market, including Scandinavia. Other terminal operators in the North Range offer rival services in both fi elds. HHLA's complementary range of warehouse and contract logistics services supports the Group's market positions in the handling and transportation sectors. In the fi eld of port consultancy, the Group's affi liates Hamburg Port Consulting (HPC) and Uniconsult work on pioneering development projects around the world. See also Course of Business, Logistics Segment, page 87.
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 historical warehouse district (Speicherstadt) and on the Northern bank of the Elbe, as well as their customer-specifi c and sustainable enhancement. The segment competes with German and international investors marketing high-quality properties in comparable locations. See also Course of Business, Real Estate Segment, page 88.
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 var iety of sectors, ranging from logistics and trading companies, to media, consulting and advertising agencies, fashion fi rms and restaurants.
split by customers in the Container segment at the main location Hamburg, 2011
Globally operating container shipping companies are the customers which account for the largest share of HHLA's revenue. In ship handling, HHLA's container terminals work with many shipping companies (multi-user principle) and can therefore offer their customers a wide range of high-quality services. In the 2011 fi nancial year, HHLA's customer base included 19 of the 20 largest container shipping companies. HHLA therefore believes that it will be able to respond fl exibly to changes in the consortia and collaborations formed by its clients in the shipping sector, such as the partnership announced at the end of 2011 between CMA CGM and MSC and the merging of the Grand Alliance (Hapag-Lloyd, NYK, OOCL) with the New World Alliance (APL, Hyundai, MOL) to create the G6 Alliance. Many shipping companies are currently following the trend towards optimising their service portfolios by forming new consortia or exchanging capacities and thereby strengthening their competitive position. HHLA is accompanying this development closely based on its long-standing contacts. In the 2011 fi nancial year almost unchanged to the previous year, HHLA's fi ve most important customers accounted for 50 %, its ten most important for 74 % and its 15 most important for 88 % 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.
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 com-
| 1. | APM-Mærsk | 2,539 |
|---|---|---|
| 2. | MSC | 2,122 |
| 3. | CMA CGM | 1,342 |
| 4. | COSCO | 648 |
| 5. | Hapag-Lloyd | 645 |
| 6. | APL | 626 |
| 7. | Evergreen | 607 |
| 8. | CSCL | 548 |
| 9. | Hanjin | 478 |
| 10. | MOL | 434 |
| 11. | Hamburg Süd | 409 |
| 12. | OOCL | 406 |
| 13. | NYK | 400 |
| 14. | CSAV | 379 |
| 15. | Yang Ming | 341 |
| 16. | K Line | 337 |
| 17. | Zim | 322 |
| 18. | Hyundai M.M. | 295 |
| 19. | PIL (Pacifi c Intl. Line) | 278 |
| 20. | UASC | 237 |
Source: AXS Alphaliner
panies transport the cargo, but the freight volumes and transport routes are determined by the producers or purchasers of the goods. Volumes in the Container segment therefore do not constitute an order backlog in the traditional sense. Sales activities are organised by means of traditional key account management with individual advice and support for major customers. Selling the services on offer is not the only objective of these activities. They are also aimed at optimising processes and thereby helping to increase added value for customers. HHLA therefore provides container shipping companies with their own key account managers. These managers are responsible for providing comprehensive advice at strategic and operational level.
The Intermodal and Logistics segments are aligned locally with the specifi c needs of their customers. Sales activities are usually managed by the individual companies. As far as possible, they follow the strategic approach of vertical integration, i.e. offering comprehensive transport and logistics services from a single source. The companies in the Intermodal segment each maintain their own sales departments at their headquarters in Hamburg, Frankfurt / Main, Prague and Warsaw. They also use regional offi ces at the seaports, in the target markets and central locations overseas to provide local support for their shipping and forwarding customers and to acquire new business.
In HHLA's Real Estate segment, sales activities are organised according to the two main locations, Hamburg's Speicherstadt historical warehouse district and the northern banks of the Elbe, as well as logistics properties in and around the port. Professional real estate staff specialising in the respective properties can therefore advise potential customers and tenants across the whole spectrum of services and offer customised solutions based on their location expertise. Construction and consulting services are also provided.
HHLA's strategy is aimed at 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 transport chain between the international seaport and its European hinterland, HHLA is favourably positioned to exploit the intensifi cation in global trade and achieve profi table growth. This is underlined by Hamburg's role as an international hub linking the Far East, especially China and India, with the economies of Central and Eastern Europe.
No fundamental changes were made to corporate strategy in the 2011 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 constantly improve its competitiveness by further enhancing its service quality and technological capabilities. It concentrates both on retaining its broad customer base and attracting new clients. Its ship handling activities focus primarily on continuously improving the effi ciency of its services and responding to the requirements of growing vessel sizes which prompt peak loads in handling. This involves systematically gearing the design and operation of facilities towards maximising the productivity of land-usage, manpower and capital. In order to strengthen its leading position in handling technology and effi ciency, HHLA works particularly on innovating its systems and optimising processes. To this end, HHLA continuously improves its IT basis. To ensure that it is largely independent from external IT providers, HHLA develops and maintains systems critical to success itself – unless standard modules can be procured and used for such purposes. See also Research and Development, page 71.
In order to ensure a consistently high standard of service, HHLA will continue to pursue its multiuser concept in the Container segment, i.e. providing a non-exclusive service to as many shipping companies as possible in the handling of ships and the allocation of berths. The company believes that this concept will secure the longterm existence of a balanced customer portfolio and the profi tability of its services.
In order to steadily improve the quality of its preand onward-carriage systems, the company also plans to systematically increase its control over the hinterland network at key transport junctions and further enhance its coordination of maritime feeder traffi c. In this way, freight traffi c and the accompanying information can be intelligently linked and thus optimally managed. By tailoring these activities to the specifi c demands of maritime transport chains, HHLA paves the way for an effi cient link between sales and procurement markets in the seaports' hinterland and via seaborne transport within Europe.
HHLA plans to continuously improve the services it provides by expanding intermodal transport between international ports and the rail and road networks. Besides increasing the scope and range of its services, HHLA also focuses on raising 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 utilising synergies between handling and transport services and by adding complemen-
tary 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". All additions to the Group's integrated service portfolio will be principally 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 econ omies 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
Sustainably increasing enterprise value at HHLA
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 reasonably limited.
In its non-listed Real Estate subgroup, HHLA pursues a long-term and value-oriented approach to enhancing the activities pooled in this segment. This includes in particular the development of areas and properties, their marketing, commercial property management and facility management.
HHLA's strategic development as a whole is supported and safeguarded by sound fi nancial resources and a good corporate creditworthiness, based on the criteria for investment-grade ratings. This ensures that HHLA can seize opportunities for value-enhancing corporate development and actively shape consolidation processes in the port logistics sector at any time. See also Financial Position, page 88.
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 other factors. Together, all the key indicators form a self-contained framework for the value-oriented implementation and further development of the corporate strategy. See also Corporate and Value Management, page 66.
In its business operations, HHLA is subject to numerous German and foreign statutory provisions and regulations such as public law, trade, customs, labour, capital market and competition regulations.
As the bulk of HHLA's commercial activities are concentrated in and around the Port of Hamburg, its regulatory environment is largely determined by the Hamburg Port Development Act (Hamburgisches Hafenentwicklungsgesetz – HafenEG). HafenEG formulates the structural framework for the sound development of commercial activity in the Hamburg port area. HafenEG's objectives are to maintain the Port of Hamburg's competitiveness as an international all-purpose port, to safeguard freight volumes and to use the public infrastructure as effectively as possible. To this end, the Port of Hamburg currently employs a "landlord model", by which the Hamburg Port Authority retains ownership of the port area and responsibility for building and maintaining the infrastructure, while the privately owned port operators are responsible for the development and maintenance of the superstructure (buildings and facilities). HHLA has concluded a long-term lease agreement with Hamburg Port Authority for those port areas of importance for its business operations.
For the construction, alteration and operationof its handling facilities, HHLA is reliant on the issuance and continued existence of authori sations under public law, especially offi cial authorisations 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 authorisations 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 standardised installation of measures to prevent terrorist attacks on ocean-going vessels and port facilities. For the operators of port facilities, compliance with the code involves observing strict access control and implementing numerous other measures for averting danger.
The aforementioned international provisions are implemented in the Port of Hamburg's area by means of the German Port Security Act (Hafensicherheitsgesetz – HafenSG). The act contains far-reaching regulations which take account of the increased security requirements of the Port of Hamburg.
The 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. The European Commission is currently working on guidelines for the issuing of licences and/or construction, service or supply agreements in the transport sector. Depending on which form these guidelines take, they may affect HHLA in the future. In the 2011 fi nancial year, however, there were no amend-
ments to the legal framework with a signifi cant impact on the Group's operating activities, its earnings or its fi nancial position.
HHLA's primary objectives include the long-term, sustainable growth of its enterprise value. The company believes this is only possible in the long run if economic success is coupled with ecological and social responsibility. For this reason, all corporate decisions observe the principle of achieving a balance between economic, environmental and social considerations. See also Sustainability, page 73 et seq. and Corporate Strategy, page 63.
HHLA uses a Group-wide value management system for the planning, management and monitoring of its commercial activities. No changes were made to this system in the 2011 fi nancial year. The key performance indicator for fi nancial management is the ratio ROCE (return on cap ital employed). This benchmark takes account of all the Group's relevant earnings and assets parameters, thereby encouraging value-generating corporate decisions in the interest of a closely coordinated management of profi tability and capital employed.
The HHLA Group calculates ROCE as a ratio of the operating result (EBIT) and the average operating assets used.
The reported unadjusted EBIT fi gure was used to calculate ROCE for the 2011 fi nancial year. The earnings indicator ROCE therefore principally represents the average return on that capital which is employed to generate the operating performance. See also Note on the Reporting, page 80.
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
ROCE – defi ning parameters and infl uential factors
operational responsibility. The focus on this target has been additionally emphasised since 2010, when a multi-year assessment time frame was introduced for calculating performance-related remuneration components for executives.
Value-oriented management via the key performance indicator ROCE therefore serves to align all operating activities with the aim of promoting sustainable economic growth and raising enterprise value. Commercial activities are generally regarded as value-generating if the return on capital employed exceeds the cost of capital and they therefore make a positive value contribution. Such capital costs correspond to the weighted average of equity costs and the cost of borrowed capital. As in the previous year, HHLA used a weighted average cost of capital of 10.5 % before tax to calculate its value growth at Group level in the 2011 fi nancial year. This cost of capital is based on the Executive Board's assessment of a stable, long-term rate of return arising from a balanced relationship between equity and borrowed capital. This approach aims to prevent 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 dialogue with customers – wherever allowed by the highly capital-intensive nature of the industry and investment projects that often take several years to be realised. Potential acquisition and investment possibilities that might constitute strategically useful additions are also mainly assessed according to their expected value contributions. The Group refrains from engaging in commercial activities with negative value contributions if they are unlikely to achieve the required internal return targets in future.
As a result of strong year-on-year growth in container throughput, ROCE improved noticeably in the 2011 fi nancial year. As EBIT growth outstripped the increase in tied-up capital, ROCE improved to 15.4 % and was thus once again well above the weighted average cost of capital of 10.5 %. This represented another positive value contribution in 2011, with an increase of 22.8 % or € 12.2 million on the previous year.
| in € million | 2011 | 2010 | Change |
|---|---|---|---|
| Operating income1 | 1,268.8 | 1,114.8 | 13.8 % |
| Operating expenses1 |
- 1,061.8 | - 924.1 | 14.9 % |
| EBIT1 | 207.0 | 190.7 | 8.6 % |
| Ø Net non-current assets |
1,257.9 | 1,226.5 | 2.6 % |
| Ø Net current assets |
86.7 | 79.0 | 9.8 % |
| Ø Operating assets2 |
1,344.5 | 1,305.5 | 3.0 % |
| ROCE in % | 15.4 | 14.6 | 0.8 pp |
| Cost of capital before tax2 in % |
10.5 | 10.5 | 0.0 pp |
| Cost of capital before tax 2 |
141.2 | 137.1 | 3.0 % |
| Value added in % | 4.9 | 4.1 | 0.8 pp |
| Value added | 65.8 | 53.6 | 22.8 % |
2010 based on continuing activities
(EBIT unadjusted: € 192.9 million).
of which 7.5 % for subgroup Real Estate.
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 optimisation of specifi c operational processes, although they also serve the overriding objective of value-generating management. See also Sustainability, page 73 et seq.
In addition to the continuous dialogue HHLA maintains with its customers, the company makes extensive use of macroeconomic forecasts as early indicators for its operating activities. These include the anticipated development of gross domestic product for important trading partners, and the subsequent estimates for foreign trade and import/export fl ows, as well as for container traffi c on relevant routes.
HHLA had a total of 4,797 employees at the end of 2011. Compared with the previous year's total, there were 118 employees more, or an increase of 2.5 %. In geographical terms, the workforce was concentrated mainly in Germany, with 3,587 staff members (74.8 %), of whom 3,482 are based in Hamburg. The 1,210 jobs at foreign sites consisted mainly of 687 workers (14.3 %) at the Intermodal companies in the Czech Republic and Slovakia and 477 employees (9.9 %) in Ukraine.
by segment as of 31.12.
| 2011 | 2010 | Change | |
|---|---|---|---|
| Container | 2,898 | 2,891 | 0.2 % |
| Intermodal | 902 | 777 | 16.0 % |
| Logistics | 422 | 441 | - 4.4 % |
| Real Estate | 38 | 38 | 0.0 % |
| Holding / Other | 538 | 531 | 1.3 % |
| Total | 4,797 | 4,679 | 2.5 % |
Headcount in the Container segment – which accounts for 60.4 % of all jobs at HHLA – remained virtually unchanged at 2,898. Staffi ng levels in the Intermodal segment rose at a much faster rate, due primarily to an increase in Eastern European rail services by the Metrans companies. With growth of 16.0 % to 902 employees, the segment accounted for 18.8 % of the total workforce. By contrast, the number of employees in the Logistics segment fell by 4.4 % to 422 mainly as a result of natural fl uctuation. It therefore accounted for 8.8 % of the total HHLA headcount. The number of jobs in the Real Estate segment remained unchanged at 38 or 0.8 % of the HHLA workforce. Meanwhile, the number of staff in the strategic management holding company and associated areas rose by 1.3 % to 538, corresponding to 11.2 % of the Group's total headcount.
A collective bargaining agreement governs pay and working conditions for 92 % of staff at German sites. The fl uctuation rate at the German locations (excluding reassignments within the Group) was 4.3 % in 2011 (previous year: 5.2 %). As in the previous year, the average employee age was 42 (men: 43, women: 38).
In the year under review, HHLA in Hamburg provided vocational training for a total of 130 young people (previous year: 126). Women made up 22 % of this total and accounted for 29 % of the trainees in parallel career and degree programmes. As a result, the company maintained its strong commitment to training and diversity in the reporting year.
The number of accidents at the companies in the Port of Hamburg fell to 88 in 2011 (previous year: 111), due primarily to a reduction in the number of weather-related incidents. As well as taking steps to prevent accidents, HHLA kept up its continuous efforts to maintain and improve the occupational safety of its employees and protect their health. The company's occupational safety and health programme includes company doctors, help with addictions and social problems, an integration management programme for employees following a lengthy period of illness, representatives for the severely disabled and staff sporting activities. The works council and HR management also play a part in running the various schemes.
Key measures are evaluated at the statutory meetings of the Occupational Safety Committee, which are held four times a year. The occupational safety management activities also include informing and instructing staff by means of in-house tuition, training and practical exercises focusing on emergency precautions, such as preventing fi res and water pollution, advisory services, prevention and risk management programmes.
Other preventive measures to improve health, safety and environmental protection include regular one-day campaigns at the HHLA companies. In the reporting year, the HHLA Container Terminal Altenwerder held a week-long health campaign and the Service Center Burchardkai staged a day of special events focusing on preventing addiction and promoting occupational health. As part of the prevention campaign, HHLA employees were offered advice and help at work. The system of in-house counsellors was extended and made more professional by means of thorough training. These counsellors are the fi rst point of contact within the company for staff
seeking advice on social and addiction issues. In 2011, the authority responsible for occupational safety awarded the HHLA subsidiary HCCR a prize for the exemplary systems in place at all four of its facilities in the Port of Hamburg.
The Group attaches great importance to HR management and has thus established it as a central division at Executive Board level. The main strategic focus is placed on encouraging vocational qualifi cations and management skills as well as achieving a good work-life balance.
The majority of jobs at HHLA are in a segment of the labour market in which men are traditionally employed and women are proportionately less represented. In order to fully utilise the change in working conditions at the port, HHLA offers development opportunities specifi cally for women in all areas and at all levels. The female proportion of HHLA's workforce in Germany again increased slightly to 14.2 % (previous year: 14.0 %). In order to promote equal opportunities and diversity, the Executive Board agreed in 2010 on a minimum proportion of women of 20 % for all managerial pos itions. A systematic process is to be introduced to plan corresponding managerial and specialist careers for female staff. Adjustments will also be made to the recruitment process.
Wherever commercially viable, the number of part-time positions available has been increased to help employees reconcile their work and family commitments. Employees on maternity or paternity leave are actively advised and supported by the central HR management team while they are off work. Since April 2011, staff on maternity or paternity leave have also been invited to regular parents' get-togethers at the Group's head offi ce along with their children. At these events, the HR department informs them about the company's development, current vacancies and training opportunities. Staff also have the opportunity to share their experiences with one another. This is intended to ensure that HHLA can permanently meet its requirements for highly qualifi ed employees.
Staff development schemes for all groups of employees throughout the company's hier archy are managed and developed by the central HR management division in Hamburg. Needs-based training programmes are offered for young professionals and prospective managers, while individual development measures are provided for more experienced managers and specialist members of staff. These include programmes for knowledge management, continuous learning processes and specifi c training sessions.
HHLA implemented a programme developed by Germanischer Lloyd to train certifi ed ship planners in 2011. Its aim is to train existing staff in order to meet the need for such specialists at HHLA's container terminals. In this qualifi cation scheme, a female ratio of 30 % was achieved.
In the period under review, HHLA introduced assessment centres, i.e. a structured staff selection process, as a further personnel development tool. They are used to select employees as part of recruitment procedures, to identify staff potential and to establish suitable development measures. More than 100 employees attended assessment centres designed to fi ll management vacancies in 2011.
Purchasing is a shared service largely provided by the HHLA Group's management holding company. Pooling buying processes is the best way to meet internal customers' requirements regarding products and services. The main focus is the reliable and timely provision of long-lived capital goods, raw materials, consumables and supplies, services and other products. Cost is not the only consideration – quality and sustainability are also important criteria. Purchasing strives to constantly improve supply chains and optimise supply processes. All staff engaged in this fi eld are obliged to uphold HHLA's code of conduct. See also Compliance, page 43.
In 2011, all purchasing employees completed supplementary training and professional development courses in the fi elds of operational and strategic procurement.
The timely procurement of operating supplies and spare parts continues to play a fundamental role in ensuring the operational readiness of hand ling facilities and equipment. Although procurement is subject to growing demands regarding fl exibility and automation, there were no supply bottlenecks in the year under review.
Purchasing is divided into four classes of goods, thus offering internal customers a high degree of transparency, service and quality. In the reporting year, the construction class accounted for approx. 20 % of total Group-wide procurement volumes, while the MRO class (maintenance, repairs and operations) accounted for 13 %, equipment and energy for 55 % and IT for 12 %. All in all, procurement volumes rose slightly in line with the development of business. Pooling buying activities enabled the Group to benefi t from more favourable conditions.
The weighting of the various classes of goods changed considerably in comparison with the previous year. Equipment and energy experienced the strongest growth. This category includes the maintenance of heavy equipment as well as new acquisitions and replacement investments. The procurement of container gantry cranes and ground-handling vehicles (straddle carriers) was a major factor here. Purchases in the construction class were above average in the previous year as inland terminals were being built. In the reporting year, however, the main focus was on maintaining facilities. Purchases in the MRO class primarily consist of consumables, which were decreased in relative share by plant purchases. As in the previous year, the IT product group continued to make stable progress.
The Group deliberately diversifi es its procurement activities. As a result, there were no signifi cant dependencies on individual suppliers in the 2011 fi nancial year, neither at Group nor at segment level. There was a further increase in the strategic
Procurement Volume by class of goods, 2011
55 % Equipment/energy 13 % MRO
20 % Construction
12 % IT
integration of the Group's suppliers into the development of products, facilities and processes by means of partnerships. 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 policy – especially as globalisation continues to gather pace. Sustainability and compliance considerations were also given greater weight in line with the company's requirements and guidelines.
As part of the drive to optimise procurement processes, digital contract documentation and e-procurement (SAP-SRM) were introduced in 2010. The systems were integrated throughout the Group in the 2011 fi nancial year. Increased use of e-procurement in particular has dramatically reduced the percentage of paper and formbased order processes.
In order to achieve the Group's CO2 emissions targets, green power was used in the year under review for the annual consumption of the HHLA Group's non-handling electricity consumers and the Container Terminal Altenwerder, rendering them carbon-neutral.
As a result of the amendments to the German Electricity Tax Act (StromSG) effective 1 January 2011, the energy trading company established in 2009 was merged as part of the Container segment to capitalise on positive effects in energy management and related services. The tranche model used for energy procurement in 2010/2011 enabled the Group to keep benefi ting from low prices.
One of HHLA's strategic objectives is to continuously improve the effi ciency of its operating
systems, and consequently its competitiveness, by developing application-oriented technologies. The main focus of these activities is therefore on engineering and IT-based innovation projects. HHLA's project portfolio comprises more than a dozen interdisciplinary model projects. A good example is the HHLA Container Terminal Altenwerder, which is regarded as one of the world's most technologically advanced handling facilities. The intelligent, compact terminal layout, cuttingedge 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 competitive advantage.
Development activities are largely carried out decentrally at HHLA's respective operating sites. The specialist departments assemble teams of employees with a wide range of qualifi cations for the various development projects based on the specifi c requirements. In some cases, these teams include staff from different departments and even different Group companies. Thanks to close collaboration with technical universities, institutes, industry partners and the German Federal Ministry of Economics and Technology, joint projects can be planned, managed and developed by specially assembled task forces. As a result of the collaboration with numerous partners, the technological innovations are generally not registered as HHLA exclusive patents. A unique feature is however, the largely proprietary software for terminal operations at the port.
As a technological leader in the port handling industry, HHLA is involved in researching new, ecofriendly drive systems as part of its sustai nable business model. Together with Gottwald Port Technology and several research bodies, HHLA completed its Zero Emissions pilot pro ject – which involved operating driverless, batterypowered container transport vehicles – at the HHLA Container Terminal Altenwerder (CTA). Known as automated guided vehicles (AGV), they transport containers between the ship and
the block storage yard using fully automated navigation technology. There are no comparable battery-run commercial vehicles designed for loads of up to 60 tonnes anywhere else in the world. The battery AGVs are powered by batteries weighing approx. 11 tonnes, which supply 335 kilowatt-hours of energy. Batteries can be quickly replaced at an automatic batterychanging station. The empty batteries are automatically plugged into the charging system in a high-bay warehouse and recharged with energy from renewable sources. Depending on the operating conditions, an AGV can run for an average of 17 hours on one full battery. This signifi cantly reduces exhaust fumes and noise emissions, without making it necessary to compromise on performance. The Zero Emissions project was part of the German Federal Ministry for the Environment's incentive scheme "Flottenversuch Elektromobilität im Wirtschaftsverkehr" (Fleet Test of Electromobility in Commercial Transportation). It was completed in autumn 2011. Following on from the project, there are now plans to prepare the battery-powered AGV for large-scale production. In December 2011, the pilot project was awarded the Hanse-Globe 2011, a sustainability prize presented by the Logistics Initiative Hamburg.
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 fastgrowing transport volumes, which remain a longterm trend. The project is funded by the German Federal Ministry of Economics and Technology. Several HHLA companies are involved in various development projects. The main focus of these projects is on enhancing and optimising operating processes at HHLA's container terminals and throughout the transport chain.
The joint project Lean Port Management (LPM) strives to minimise port throughput times in order to make more effi cient use of existing resources and improve capacity utilisation during the container import process. The less time containers spend at the port, the more effi ciently existing resources can be used. The key requirements are as follows:
In addition to the HHLA container terminals, other terminal operators, shipping companies, freight forwarders, public bodies and IT partners are also involved in the project.
The research project Container ID aims to establish a system which automatically identifi es containers in the handling process and integrates them into the information chain. At present, there is a system which automatically logs container details in the hinterland/truck handling part of the CTA. This records container numbers, ISO codes and vehicle numbers. The project's objective is to introduce automatic container identifi cation as well as using optical character recognition (OCR) technology at the quayside. OCR should provide a technical solution which fulfi ls customers' requirements for containers to be tracked throughout the transport chain. Automatic container identifi cation will simplify and speed up processes at the terminal and increase data security and availability.
The research project VESUHV is dedicated to networking seaports and railbound hinterland transportation. It focuses on developing a standardised system which will enable the German seaports and hinterland rail service operators to exchange data (e.g. on container availability) reliably at an early stage. The project's aim is to boost the transport chain's performance by improving reliability at the operational planning stage. Together with its network partners, HHLA subsidiaries from the Container and Intermodal segments are developing a concept to implement an improved fl ow of information.
Since mid-2011, test operations have been under way which focus on the unloading and loading cycles of container gantry cranes. The cycles are to be combined as part of the Dual Cycle project. Separate work cycles are currently used to load and unload containers at the HHLA Container Terminal Altenwerder, meaning that container gantry cranes and AGVs run empty. The new system aims to combine vessel loading and unloading processes and put an end to this empty running. For example, when a container is unloaded from a vessel and placed on the lashing platform, the main trolley of the container gantry crane lifts an outgoing container onto the ship for loading on the next cycle. This makes the back and forth trips of the portal crane trolley more effi cient and signifi cantly boosts productivity at the quayside, whilst at the same time reducing CO2 emissions.
Other subprojects within the ISETEC II support initiative include optimising operations and maintenance in order to improve capacity utilisation, increase the availability of machinery and improve occupational health and safety.
Two projects were also successfully completed in the 2011 fi nancial year: "Position detection during port handling" and "Optimising operations at container terminals". By acting on project fi ndings and installing new position detection systems at the terminals, the company was able to stabilise processes, improve its handling quality and performance, and reduce throughput times. It is possible to ramp up these systems and make more widespread use of the technologies in question, both of which will enhance producti vity even further.
Self-service terminals have been introduced as part of the "TruckLoad 2.0" programme being rolled out throughout HHLA. The scheme's aim is to improve and standardise the many workfl ows associated with processing trucks at the HHLA container terminals.
Initial test results from the Container Terminal Altenwerder showed that the new touch screens installed there for fast self-service led to shorter queues and also meant that more trucks could
be processed. Since December, truckers with standard containers at the Port of Hamburg have been able to use this self-service system at all HHLA container terminals without prior registration. Details of where each container is to be delivered or collected are available in two minutes or less. In the long run, the company hopes to further increase the existing infrastructure's capacity by means of organisational steps, standardised IT processes and more pre-bookings.
In order to document its performance, the HHLA Container Terminal Altenwerder once again conducted the certifi cation in accordance with the Container Terminal Quality Indicator (CTQI) in the reporting year. The standard, which was developed by the Global Institute of Logistics and Germanischer Lloyd, checks criteria such as the safety, performance level and effi ciency of a terminal on both the water and land sides, as well as its links to pre-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.
Moreover, HHLA was named a "Global Benchmark in Container Terminal Quality Assurance" by the Global Institute of Logistics in December 2011. The institute voted the HHLA Container Terminal Altenwerder 'best in class' for container handling.
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. Ever since it was established, the Group has attached the utmost importance to sustainable business practices. 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.
HHLA's business model aims to provide an ecologically sound link between global goods fl ows
| 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 | |
| Nature conservation | Minimise impact on nature and actively protect natural habitats | |
| Climate protection | Utilise technically and economically viable means of reducing specifi 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 |
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 foresight fully developed further.
In 2009, HHLA established a Sustainability Council headed by the Chairman of the Executive Board. Its members meet regularly with HHLA's stakeholder groups – especially customers, staff, investors, suppliers and the general public – to discuss key sustainability issues of relevance to HHLA. Also in 2009, the Group set up a specialist function dedicated to sustainability which reports directly to the Chairman of the Executive Board.
HHLA's sustainability strategy is based on three pillars: the environment, society and the economy. Ten fi elds of activity and guidelines have been defi ned and implemented within each of these areas. This puts HHLA in a position to take a leading role in the area of sustainability.
The fi elds of activity focus on environmentally friendly transport chains, climate protection and surface area conservation. HHLA has also been publishing its carbon footprint regularly since 2008 as part of the international Carbon Disclosure Project (CDP). The CDP is a non-profi t initiative which now manages one of the world's largest databases of corporate greenhouse gas emissions on behalf of institutional investors and makes this information widely available. HHLA calculates its CO2 emissions on the basis of the Greenhouse Gas Protocol, a global standard for recording greenhouse gas emissions.
In light of its commitment in this fi eld, the research institute Fraunhofer Supply Chain Solutions named HHLA as one of six sustainability pioneers in Germany's logistics industry in its sustainability index published in the year under review. It commends HHLA for its "outstanding level of sustainability". The index assessed the top 150 logistics providers in terms of revenue.
Data relevant to sustainability is recorded and presented by HHLA's central departments for specifi c dates or periods of time. Unless stated otherwise, the data pertain to the Group as a whole.
The measures implemented to minimise the impact of transport on the environment are rounded out by environmental and resource conservation measures. HHLA strives to conserve resources at its terminals. For example, by using a total of 14,389 tons of recycled building materials to extend berth 3 at the Container Terminal Burchardkai in 2011, by optimising the allocation of containers to bays to minimise the routes for equipment transport, and by using retreaded tyres for straddle carriers.
Well-trained employees are the foundation for all of the company's activities. In combination with exemplary occupational safety standards, they guarantee a high level of quality. HHLA's activities in the fi eld of corporate social responsibility (CSR) focus on port and logistics-related education issues.
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. As part of its ongoing efforts to provide more meaningful information about its carbon footprint – and having achieved its climate protection target last year – HHLA started using a new, more sophisticated calculation model at the beginning of the reporting year. This new approach fulfi ls the requirements of the Greenhouse Gas Protocol. Following a change in the consolidated group and an adjustment to external electricity mix factors, the Group restated its CO2 fi gures for 2009 and 2010 accordingly. In line with the Greenhouse Gas Protocol, electricity from renewable sources was classifi ed as carbon-neutral. The power needed by a terminal depends largely on the number of seaborne containers it handles and the number of containers which are transported onwards by land. In the past, seaborne handling was used as an indicator. However, HHLA changed its CO2 reporting system in the year under review and now uses seaborne and overland throughput to provide a more accurate picture. To guarantee complete transparency and document the improvement in its CO2 effi ciency over recent years, the fi gures for the 2008 fi nancial year serve as the basis for the new calculation model and HHLA's new climate protection target. By 2020, the Group intends to reduce CO2 emissions by more than 30 % for each container it handles. In the period from 2008 to 2011, the company already succeeded in reducing CO2 emissions by 21 % per container handled.
Total CO2 emissions rose at a slower pace than volumes in the reporting period, with an increase of 15.2 % to 99,220 tonnes. A long-term increase in the percentage of electricity used within the Group's energy mix will enable the company to utilise more renewable energies and thereby substantially reduce its carbon footprint. To achieve this goal, HHLA is converting more and more of its equipment and machinery to electricity. Equipment and machinery that has been electrifi ed does not just produce fewer emissions and less noise, it is also easier to service. HHLA has been making greater use of power from renewable sources since 2009. As of this date, the electricity required by all offi ce buildings and workshops occupied by HHLA has come from renewable energies. The Container Terminal Altenwerder has been making exclusive use of green electricity since 2010. This reduced HHLA's CO2 emissions by 22,800 tonnes in the reporting year (previous year: 16,575 tonnes). Compared to the previous year, specifi c CO2 emissions at three of HHLA's four container terminals fell by between 0.4 % and 3.8 %, while one terminal recorded an increase of 2.1 %. Overall, this meant that specifi c CO2 emissions rose slightly by 1.0 %. In addition to power from renewable energies, HHLA continued with a number of energy-saving projects at the Group's various affi liates to improve the CO2 balance. For example, a total of 32 new low-consumption, low-emission straddle carriers went into service in 2011. These vehicles burn around 25 % less diesel per operating hour than former models which have been partially replaced. Logistics processes and the use of building technology at the fruit and refrigeration centre were further optimised to make them more CO2 effi cient. This made it possible to improve CO2 effi ciency in the reporting year by over 40 % month on month since the project began. On an annual basis, this represents a reduction in electricity consumption of over 5 million kWh.
In the year under review, a number of pilot and model projects were carried out using electrifi ed equipment and machinery. HHLA and the AGV manufacturer Gottwald Port Technology were jointly awarded the coveted Hanse Globe sustainability award in September 2011 for their "Zero Emissions" project. This project involved testing two driverless, battery-powered AGVs for container transport. See also Research and Development, page 71. Several electric cars were tested in 2011 regarding their suitability for every-
Indirect CO2 Emissions in thousand tonnes
CO2 Emissions by equipment type, 2011
The CO2 emissions are based on measured and calculated data as well as estimates.
| Diesel in millions of litres |
Heating oil in millions of litres |
Petrol in millions of litres |
Natural gas in millions of m3 |
Electricity in millions of kWh |
District heating in millions of kWh |
|
|---|---|---|---|---|---|---|
| 2008 | 26.8 | 0.1 | 0.1 | 1.9 | 137.6 | 1.7 |
| 2009 | 18.0 | 0.1 | 0.1 | 2.1 | 121.82 | 1.7 |
| 2010 | 21.3 | 0.1 | 0.1 | 2.4 | 134.43 | 5.6 |
| 2011 | 26.0 | 0.1 | 0.1 | 2.11 | 144.54 | 5.2 |
1 Consumption of natural gas in 2011 is based on measured and estimated fi gures.
2 Of which 12 million kWh from renewable energies.
Of which 65 million kWh from renewable energies.
4 Of which 72 million kWh from renewable energies.
at HHLA's sites in Germany and the Ukraine in m3
day use in the port environment. The results of the pilot trial were positive; HHLA will therefore continue to look into making greater use of electric vehicles. Another electrifi ed rail checkmobile also went into service.
As well as choosing highly energy-effi cient machinery and equipment, HHLA is actively stepping up its use of renewable energy. In summer 2011, photovoltaic arrays were installed on the roofs of the logistics centre in Altenwerder and the Container Terminal Tollerort. Set up and operated by the energy supplier Hamburg Energie Solar, the systems had already produced approx. 210,000 kWh of zero-carbon electricity by the end of 2011.
In addition to this, HHLA Logistics GmbH and HHLA Logistics Altenwerder GmbH & Co. KG were certifi ed for the fi rst time by Germanischer Lloyd according to the environmental management standard ISO 14001.
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 increased by 7,302 m3 or 9.3 % to 85,614 m3 in 2011. Water usage therefore rose at a much slower rate than throughput. HHLA's facilities in Hamburg draw water from the public supply network, which is fed by a total of 17 groundwater-based waterworks.
HHLA separates rubbish for recycling wherever possible so that reusable waste can be fed back into the resource cycle. Excluding soil and building rubble, the amount of waste produced at the Hamburg sites rose by 10 % year on year to 10,734
tonnes in 2011. This meant it grew at a slower pace than handling volumes. While 3,629 tonnes or 41.3 % of waste was classifi ed as hazardous in 2009, the fi gure fell to 33.7 % in 2010 and dropped further to 32.5 % in 2011. This is equivalent to 3,489 tonnes. Of the total waste volume, 2,803 tonnes or 26.1 % was made up of overripe bananas and other foodstuffs unsuitable for processing or consumption. More than 50 % of this food waste was recycled to generate biogas. In this way, some 320,000 kWh of zero-carbon electricity was produced in the reporting year. 2,254 tonnes or 21.0 % of the annual waste total was attributable to sludge from oil/water separ ators collected at the washing, fuelling and parking spaces for straddle carriers and AGVs. This mixture of sludge, oil and water undergoes treatment at a chemical water treatment plant operated by a specialist waste disposal company. Once it has been separated from the oil, the water passes through a biological wastewater treatment plant.
Commercial waste accounted for 12.1 % of total waste, while scrap metal made up almost 9.0 % and 6.5 % was paper-based waste. 3.4 % of waste consisted of engine/hydraulic oils or supplies containing oil. Other waste accounted for the remaining 21.9 %.
Well-trained and motivated employees are the foundation for all of the company's activities. In combination with exemplary occupational safety standards, they guarantee the company's high level of quality. Relations with staff are dominated by the Group's sense of responsibility for its employees. The foundation for a successful working relationship is a close, responsible and active involvement of staff representatives in the Group. Compliance with legal requirements and internal company guidelines is a key part of HHLA's corporate governance policy. HHLA's compliance system centres on a code of conduct which formulates overriding principles on topics of relevance for compliance, such as conduct in the competitive environment, the prevention of corruption and confl icts of interest, and how to deal with sensitive corporate information. See also Compliance, page 43.
Our sustainability guidelines place a clear emphasis on occupational health and safety. The company therefore strives to continually improve health and safety standards in the workplace. There are numerous preventive measures and guidelines in place to ensure that staff from both HHLA and external companies, customers, suppliers and visitors do not come to any physical harm. Protecting and promoting good health is important as it has a great bearing on staff performance levels. The company's health promotion programmes are geared towards specifi c needs at the sites.
Approximately one in eight jobs in Hamburg is connected with cargo handling at the Port of Hamburg. This means that the port and the industries linked to it are major employers in the greater Hamburg metropolitan region. HHLA processes around 75 % of Hamburg's container throughput (in TEU), or approx. 50 % of the total throughput in tonnes. The company therefore sees itself as an integral part of economic developments in the greater Hamburg metropolitan area. It is well aware of its responsibility towards society both here as well as at all other sites.
The company's dialogue with society focuses on raising awareness of port and logistics-related issues. Its most important education project is the "Aqua-Agenten" initiative launched by the Michael Otto Foundation. In November 2011, the scheme was once again named as an offi cial project within the "United Nations Decade of Education for Sustainable Development". It takes a fun approach to teaching schoolchildren aged about eight or nine why water is important for people, nature and economy. Pupils learn about the signifi cance of shipping and ports for world trade at HHLA's container terminals. In the re-
porting year, 225 schoolchildren visited HHLA facilities as part of this education project. Since the project was launched in 2009, another 4,000 or so children have been taught about the importance of water and ports at school. To coincide with Hamburg's role as European Green Capital 2011, HHLA joined forces with the coach company Jasper to offer environmental tours of the Port of Hamburg and HHLA facilities. More than 150 visitors found out about sustainable developments and initiatives at HHLA as a result of these trips. HHLA also held its fi rst sustainability day at the Container Terminal Altenwerder. This offered all members of staff the opportunity to learn about the latest projects in this fi eld. See also Employees, page 68 et seq.
Net added value rose by € 57.9 million to € 560.0 million in 2011. At 44.4 %, 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 amortisation. Added value is shared between employees, lenders, the public authorities (taxes) and shareholders. The largest proportion, 66.9 % or € 374.3 million, went to employees. Shareholders accounted for the second-largest share of € 118.8 million (21.2 %), followed by the public authorities with € 56.1 million (10.0 %) and payments to lenders amounting to € 10.8 million (1.9 %).
| in € million | 2011 | 2010 | Change |
|---|---|---|---|
| Employees | 374.3 | 332.5 | 12.6 % |
| Shareholders | 118.8 | 113.9 | 4.3 % |
| Public authorities | 56.1 | 44.6 | 25.7 % |
| Lenders | 10.8 | 11.1 | - 3.3 % |
| Total | 560.0 | 502.1 | 11.5 % |
HHLA's procurement costs (for its majorityowned subsidiaries in Germany) totalled € 222 million in 2011. The greater Hamburg metropolitan area accounted for 50.5 % or € 112 million of this total.
Application of Added Value Added value € 560 million = 100 %
Global economic growth slowed down in 2011. In the course of the year, the recovery was impaired by the debt crisis in the eurozone, somewhat weaker growth in the emerging markets and growing unease on the capital markets. Global gross domestic product (GDP) increased by 3.8 % in 2011. Rising uncertainty also impacted on the global exchange of goods. Following dynamic growth of 12.7 % in 2010, the global trade volume increased by a mere 6.9 % in the year just ended.
The economic cool-off affected almost every corner of the globe. Following the strong upturn in 2010, growth almost came to a halt in a number of advanced economies. By contrast, the economies of other industrialised nations proved relatively robust last year. Current estimates put GDP growth in the advanced economies at 1.6 % overall for 2011. At the same time, the expansion of the emerging markets also lost pace. At 6.2 %, however, growth was still fairly strong here in 2011. China is a good example of the wider trend. In the full year 2011, the world's second-largest economy still managed growth of 9.2 %, com pared to 10.4 % in 2010. The People's Repub lic of China continued to drive global economic growth in the past year.
| in % | 2011 | 2010 |
|---|---|---|
| World | 3.8 | 5.2 |
| USA | 1.8 | 3.0 |
| Industrialised countries | 1.6 | 3.2 |
| Emerging markets | 6.2 | 7.3 |
| China | 9.2 | 10.4 |
| Russia | 4.1 | 4.0 |
| Central and Eastern Europe | 5.1 | 4.2 |
| Eurozone | 1.6 | 1.9 |
| Germany | 3.0 | 3.6 |
| World trade | 6.9 | 12.7 |
Source: IMF
The US economy charted a modest GDP increase of 1.8 % in the year under review, after enjoying signifi cant growth of 3.0 % in the previous year. However, the world's largest economy rallied in the fourth quarter of 2011 and posted growth of 2.8 % over the previous quarter. This trend was driven by consumer spending and rising capital expenditure.
There was only moderate growth in total economic output of the European Union's member states. Gross domestic product in the EU and the eurozone was up by just 1.6 % year on year in 2011. Germany's economic output is believed to have expanded by 3.0 % in 2011 as a whole. Exports increased by 8.2 % on the previous year, while imports were up 7.2 %. However, the economies of the Southern eurozone in particular either fl atlined or shrank as a consequence of consolidation efforts and the overall pessimistic mood.
By way of contrast to the eurozone, output in the emerging economies of Central and Eastern Europe expanded quite rapidly. GDP in this economic region rose by an average of 5.1 % in 2011. Following 17 years of tough negotiations, the World Trade Organisation (WTO) Ministerial Conference fi nally resolved to admit Russia to the WTO in December 2011. The WTO's compulsory rules and the opening of the Russian market are expected to create a more stable framework for international trade with Russia and, above all, provide strong growth stimuli.
Current estimates put growth in container traffi c at 6.8 % in 2011 as a whole. This was driven primarily by the emerging economic regions of the Far East, Latin America and Eastern Europe. Despite an increase in container volumes, stronger growth in fl eet sizes led to further surplus cap acity on the supply side. A total of 187 container ships with a combined capacity of 1.2 million TEU were delivered to customers between January and December 2011. Measured
by carrying capacity, the whole container vessel fl eet grew by 7.9 % to 15.4 million TEU last year. In addition to this, the shipyards currently have orders on hand for 621 container ships with a carrying capacity of 4.3 million TEU. This corresponds to approx. 28 % of the current fl eet capacity.
The growing imbalance in supply and demand placed pressure on charter rates as the year progressed. Following a positive trend at the beginning of the year, charter rates tumbled for all classes of fully containerised vessels in 2011. The weighted overall Harper Petersen Charter Rate Index (HARPEX) for time charter rates fell by almost half (down 43 %). The economic slowdown and excess supply of carrying capacity also led to a sharp fall in freight rates for container shipping last year. This downward trend in freight rates was exacerbated by intense competition for market share between a number of shipping lines.
Due to this development, shipping companies struggled as falling freight rates coincided with rising costs – a stark contrast to 2010, when most of them posted record results. According to initial estimates by market researchers, the shipping lines posted losses totalling more than € 5 billion in 2011.
A series of new alliances emerged in the container shipping industry in response to this dramatic development. Several of these focused on the major trade route between the Far East and Europe, with shipping companies such as MSC and CMA CGM or the newly formed G6 Alliance (Hapag-Lloyd, NYK, OOCL, APL, HMM and MOL) launching joint operations. The aim is to improve service, drive down costs and raise freight rates by offering a more comprehensive route network, more frequent departures and greater reliability.
Following on from lower throughput due to the 2009 economic crisis, Europe's four largest container ports – Rotterdam, Antwerp, Hamburg and the Bremen ports – built on the growth trend initiated in 2010 during the reporting year. Zeebrügge was the only port to record falling handling volumes last year. All in all, the North Range ports handled approx. 38 million standard containers (TEU). This was a 7.7 % increase in container throughput compared to the previous year.
The Port of Hamburg achieved a container throughput volume of 9.0 million TEU in 2011. This represented above-average growth of 14.2 % on the previous year. Meanwhile, the western ports of Rotterdam and Antwerp posted increases of 6.3 % and 2.3 % respectively. Thanks to its stronger-than-average growth, the Port of Hamburg regained market share within the North Range. As a result of this dynamic development, Hamburg reassumed its position as Europe's second-largest container port – behind Rotterdam and ahead of Antwerp. It last claimed this spot in 2008.
In 2011, rail freight in Germany recovered from the downturn caused by the economic crisis. At 374 million tonnes, the industry recorded its largest transport volume since 1993. Freight increased by 5.1 % last year, while transport volumes rose by 5.3 % to 113 billion tonne-kilometres. 4.5 million TEU were hauled via intermodal transport in the fi rst three quarters of 2011 (containers and swap bodies). Compared with the same period of the previous year, this represents growth of 8.5 %.
Hamburg's port railway posted its best-ever result in 2011. A record-breaking volume of over 2 million TEU was transported in this way last year. Container volumes in the port railway network increased by 4 % against the previous year. Including the transportation of bulk goods, the total rail freight volume at the Port of Hamburg exceeded 41 million tonnes. This enabled Hamburg to consolidate its position as Europe's leading rail port. Some 12 % of all German rail freight starts or ends its journey in Hamburg. An impressive 34 % of all containers transported by rail in Germany also pass through Hamburg.
by vessel size categories in TEU million
Source: AXS Alphaliner
Source: Hamburg Hafen Marketing e.V.
| in € million | 2011 | 2010 | Change |
|---|---|---|---|
| Revenue | 1,217.3 | 1,067.8 | 14.0 % |
| EBITDA | 333.4 | 306.9 | 8.7 % |
| EBITDA margin in % | 27.4 | 28.7 | - 1.3 pp |
| EBIT | 207.0 | 192.9 | 7.3 % |
| EBIT margin in % | 17.0 | 18.1 | - 1.1 pp |
| Profi t after tax and minority interest | 89.3 | 76.2 | 17.1 % |
Overall View. In the management team's opinion, the 2011 fi nancial year was highly satisfac tory on the whole. HHLA achieved stronger growth than initially anticipated in container throughput and there was a further signifi cant increase in hinterland transportation. Improvements in the company's competitive position in the form of market share gains were particularly gratifying. As a consequence, the company succeeded in meeting its revenue forecast in full, having upgraded its guidance during the course of the year and issued a more precise outlook in autumn. At the same time, HHLA's early prediction that the handling of larger freight volumes would lead to increased operating requirements proved true. These were further exacerbated by the additional challenges presented by delays in the dredging of the Elbe shipping channel, the need to carry out postponed maintenance work and ongoing reorganisation measures. As a result, it proved necessary to adjust the company's ambitious target of also improving margins in the second half of the year. Despite additional expenses in the form of write-downs, HHLA was able to exceed its slightly downgraded earnings forecast. Compared to the operating result, there was even stronger growth in net profi t for the year after minority interests. HHLA continued to tailor its capital expenditure programme to actual needs. Delays to certain projects resulted in shifts to 2012. In addition to ongoing investments in existing facilities, the Group focused in particular on expanding its hinterland terminals to pave the way for further growth.
Notes on the Reporting. Due to the high level of fl exibility required in the sector, handling and transport services are generally not ordered or arranged months in advance. Consequently, an order backlog and order trends do not serve as reporting indicators as they do in other industries.
As the company completed the sale and/or suspension of its discontinued activities last year, "EBIT from continuing activities" is no longer disclosed. The reported EBIT is therefore the key indicator for the development of the operating result.
In order to show the net rental income relevant for the Real Estate subgroup more precisely, incidental rental expenses charged on to tenants are reported under other operating income rather than revenue as of the 2011 fi nancial year. To ensure that fi gures are presented uniformly at Group level, this reclassifi cation has also been implemented for the Port Logistics subgroup. Figures for the previous year have been restated accordingly. This did not affect the operating result.
A lease with the Hamburg Port Authority (HPA) for port areas used mainly for an empty container centre came to an end on 30 June 2011. The compensation payment of € 15 million agreed with HPA for the early release of the areas was made in the third quarter and recognised under "Other operating income".
| Forecast 31.03.2011 |
Forecast 13.05.2011 |
Forecast 12.08.2011 |
Forecast 11.11.2011 |
Actual 31.12.2011 |
|
|---|---|---|---|---|---|
| Revenue | Increase in the region of 10 % |
Increase in the region of 10 to 15 % |
Increase in the region of 15 % |
In the region of € 1.2 billion |
€ 1,217.3 million +14.0 % |
| EBIT | Margin improvement |
Margin improvement |
Margin improvement |
In the region of € 210 million before risks resp. € 200 million after risks |
€ 207.0 million after risks 17.0 % margin |
Several companies in the Group were merged retroactively as of 1 January 2011. At Group level this had no effect on revenue and earnings performance. However, the services exchanged between the Container and Holding/Other segments were reduced due to a cross-segment merger, resulting in a decline in inter-segment revenue. Moreover, there was a change to the consolidated group following the disposal of a company in the Container segment. None of the changes mentioned had any material effect on the Group's revenue and earnings performance. See also Notes to the Consolidated Financial Statements, page 130.
Currency effects also had no material impact on the earnings position of the Group. The 2011 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. Following strong growth in the previous year, HHLA succeeded in improving on its performance data again in 2011. Driven by the gain in new liner services and robust growth in the company's core markets, throughput in the Container segment increased by 21.3 % to 7.1 million TEU (previous year: 5.8 million TEU). Hinterland transport fi gures saw a return to their pre-crisis levels with double-digit growth of 11.3 % to 1.9 million TEU (previous year: 1.7 million TEU).
Based on this trend in volumes, the HHLA Group increased revenue by 14.0 % to € 1,217.3 million (previous year: € 1,067.8 million), with the listed Port Logistics subgroup once again acting as
the main growth driver. The Port Logistics subgroup generated revenue of € 1,190.6 million with its Container, Intermodal and Logistics segments – an increase of 14.2 % (previous year: € 1,042.8 million) – and thus accounted for 97.6 % of total external revenue (previous year: 97.4 %). The relative increase in lower-income feeder traffi c was offset by higher storage charges and price increases for rail services. However, the early termination of land use for the empty container centre in Hamburg and pressure on earnings in Odessa had a negative impact on revenue. The non-listed Real Estate subgroup raised revenue by 6.5 % to € 31.7 million (previous year: € 29.8 million). Its share of total external revenue fell to 2.4 % (previous year: 2.6 %), however, as the Port Logistics subgroup posted even stronger growth.
At € 0.6 million (previous year: € -1.1 million), there were only minor changes in inventories at Group level. Own work capitalised also remained largely unchanged at € 7.2 million (previous year: € 7.4 million). Including compensation of € 15 million for the early release of a port area, other operating income totalled € 43.7 million. This was only a slight increase on the 2010 fi gure (previous year: € 43.1 million including non-recurring income of € 2.0 million for write-backs on container gantry cranes in Lübeck, € 4.2 million from the reversal of a provision for demolition costs and € 6.2 million due to lower utilisation of the provisions for phased early retirement due to the employment situation). See also Notes to the Consolidated Financial Statements, page 130.
Expenses. In the 2011 fi nancial year, operating expenses rose by 14.9 %, or roughly in line with revenue, and less steeply than total throughput and transport volumes. As expected, however,
1
Incidental rental expenses charged on to tenants are no longer shown as revenue but as other operating income. The revenue posted for 2007 to 2009 was not restated.
expenses
12 % Depreciation / amortisation
there were backlog effects in the period under review caused by necessary maintenance work and the end of the short-time labour scheme. There was also a sharp rise in operating requirements due to an increase in peak-load conditions caused by ultra large ships. The disproportionately strong increase in volumes at those handling facilities which are not yet as effi cient as the highly automated Container Terminal Altenwerder also affected developments in expenses. Unbudgeted expenditure resulted from impairment losses in the Intermodal and Logistics segments.
The cost of materials rose year on year by 16.3 % to € 432.9 million (previous year: € 372.4 million). Expenses for purchased services – which primarily include purchased rail services in the fi eld of intermodal traffi c (particularly locomotive and track use) – increased in line with volume growth. However, higher procurement costs for fuel, energy and spare parts caused this expense item to rise faster than revenue. The ratio of expenses to revenue climbed by 0.7 percentage points to 35.6 % (previous year: 34.9 %).
Personnel expenses rose by 13.5 % to € 359.5 million (previous year: € 316.8 million) and thus almost at the same rate as revenue. Consequently, the ratio of expenses to revenue remained virtually unchanged at 29.5 % (previous year: 29.7 %). Expenses here were affected by wage increases and greater use of external staff due to higher volumes, compared with only a small rise in the number of permanent employees. Meanwhile, there were lower expenses for a
employee stock purchase plan and compensation paid in conjunction with staffi ng changes. In 2010, this expense item was reduced considerably by the effect of the short-time labour scheme, which was terminated at the end of the year.
Other operating expenses increased by 18.0 % to € 142.9 million (previous year: € 121.0 million) in the reporting period. While lease expenses for land and quay walls remained largely unchanged, external maintenance costs rose particularly sharply. This was due to greater use of facilities and equipment along with servicing work previously postponed and repairs to weather-related surface damage. In addition to this, a number of buildings in the Speicherstadt historical warehouse district were renovated and a fl oating crane underwent a general overhaul. Following on from savings in the previous year, there was also a renewed increase in project-related consultancy expenses. As a result, the ratio of expenses to revenue climbed to 11.7 % (11.3 %).
Depreciation and amortisation increased by 10.9 % year on year to € 126.4 million (previous year: € 114.0 million). The ratio of depreciation and amortisation to revenue was 10.4 % (previous year: 10.7 %). Whereas the increase in investment-related expenditure was substantially scaled back following adjustments to the expansion and modernisation programme, impairment losses totalling € 6.7 million were responsible for over half the increase in this expense item. In addition, the revaluation of provisions for demolition costs resulted in one-off costs of € 2.3 million.
| in € million | Change | ||
|---|---|---|---|
| Revenue | 1,217.3 | 14.0 % | I Trend largely in line with volume development I Earnings pressure by fi erce price competition I Contrasting developments in the various market segments |
| Cost of materials | 432.9 | 16.3 % | I Predominantly variable expense item I Cost of procuring energy and maintenance services of own workshops outstrip revenue growth |
| Personnel expenses |
359.5 | 13.5 % | I Wage increases twinned with slight rise in headcount I Greater use of external staff due to order level I Previous year with reduced expenses by the short-time labour scheme |
| Other operating expenses |
142.9 | 18.0 % | I Sharp rise in external provision of maintenance work I Additional project-related expenses I Largely constant lease expenses |
| Depreciation and amortisation |
126.4 | 10.9 % | I Increase due to ongoing capital expenditure I Additional burden from impairment losses in the Intermodal and Logistics segments |
Earnings. Against the backdrop of these developments, the operating result before depreciation and amortisation (EBITDA) improved by 8.7 % to € 333.4 million (previous year: € 306.9 million). The EBITDA margin fell by 1.3 percentage points to 27.4 % (previous year: 28.7 %).
After depreciation and amortisation, HHLA's operating result (EBIT) rose by 7.3 % to € 207.0 million (previous year: € 192.9 million). As a result, the EBIT margin reached 17.0 % (previous year: 18.1 %). This improved operating result was once again attributable to the Port Logistics subgroup, which improved EBIT by 8.3 % to € 194.8 million (previous year: € 179.9 million) and thus generated 94.1 % (previous year: 93.3 %) of the Group's operating result. In the Real Estate subgroup, EBIT fell by 6.1 % to € 11.9 million (previous year: € 12.7 million) and accounted for 5.9 % (previous year: 6.7 %) of the Group's operating result.
In the fi nancial result, interest income rose to € 9.6 million (previous year: € 5.0 million). This was primarily due to higher average liquidity and the revaluation of a conditional payment commitment on a profi t pooling agreement of a subsidiary with a minority shareholder. Despite higher fi nancial liabilities, however, interest expenses increased only moderately to € 42.3 million, compared with € 39.9 million in the previous year. At 32.1 %, the effective tax rate was higher in the reporting period than in the previous year (28.1 %). This was due to above-average earnings contributions made by affi liated companies with higher tax rates. In light of the diffi cult economic environment, the Intermodal and Logistics segments only made limited use of loss carry-forwards respectively made adjustments to capitalised deferred taxes for loss carry-forwards. By contrast, there was a one-off reduction in tax expenses in 2010 caused by changes in the taxation of property management subsidiaries.
Consolidated profi t after tax and minority interests rose at a faster pace than the operating result, with growth of 17.1 % to € 89.3 million (previous year: € 76.2 million). This was largely attributable to a reduction in minority interests. Because of a change in service structures, one minority shareholder was not entitled to a profi t share above the respective equity stake in the year under review. The above-mentioned positive effect on earnings from the revaluation of the conditional payment commitment only served to increase minority interests slightly, however. Shareholders in the parent company benefi ted additionally from the above-average recovery in volumes at facilities owned solely by HHLA. However, they were also disproportionately affected by pressure on earnings from the Intermodal and Logistics segments. Earnings per share improved correspondingly by 17.1 % to € 1.23 (previous year: € 1.05). The publicly listed Port Logistics subgroup achieved a 20.2 % increase in earnings per share to € 1.20 (previous year: € 1.00). Earnings per share for the unlisted Real Estate subgroup fell short of the previous year's level at € 1.95. As in the previous year, there was no difference between basic and diluted earnings per share in 2011.
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 € 92.1 million, according to the German Commercial Code (HGB), for the 2011 fi nancial year. Of this sum, € 88.0 million is accounted for by the A division (Port Logistics subgroup) and € 4.1 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 14 June 2012 that a dividend of € 0.65 per Class A share and € 1.00 per Class S share be distributed. Based on the number of shares outstanding as at 31 December 2011, the sum distributed for Class A shares would rise by 18.2 % to € 45.5 million and the amount for Class S shares would fall by 16.7 % to € 2.7 million. In relation to the consolidated profi t and earnings per share, the dividend payout ratio would once again reach a comparably high fi gure of 54.1 % for the Port Logistics subgroup and 51.4 % for the Real Estate subgroup. By issuing new shares from the Authorised Capital as intended for an agreed employee stock purchase plan for 2011, the sum for the Port Logistics subgroup may rise marginally by clearly less than one percent until submission to the Annual General Meeting.
| in € million | 2011 | 2010 | Change |
|---|---|---|---|
| Revenue | 712.9 | 604.5 | 17.9 % |
| EBITDA | 282.7 | 236.3 | 19.7 % |
| EBITDA margin in % | 39.7 | 39.1 | 0.6 pp |
| EBIT | 195.5 | 155.7 | 25.6 % |
| EBIT margin in % | 27.4 | 25.8 | 1.6 pp |
| Container throughput in thousand TEU | 7,087 | 5,844 | 21.3 % |
In the 2011 fi nancial year, the HHLA container terminals in Hamburg and Odessa increased throughput volumes by 21.3 % to 7,087 thousand TEU (Hamburg 6,769 thousand TEU, Odessa 318 thousand TEU). While the container terminal in Odessa grew by just 7.4 % as a result of the sluggish economic recovery in the Ukraine, container throughput at HHLA's Hamburg terminals increased by 22.1 % – much faster than the company's competitors in the European North Range.
The pace of growth at the HHLA terminals was once again shaped by developments in the Far East and Europe shipping regions. HHLA also recorded strong growth in North American traffi c by gaining several new services. Below is a description of the developments in detail.
The above-average growth in throughput underlines the attractiveness of both Hamburg and the HHLA terminals. The number of latest-generation container mega-ships with space for over 10,000 standard containers climbed by around 60 % at HHLA's terminals in Hamburg last year. This is all the more impressive considering that most of them are unable to utilise their carrying capacity to the full due to the delay in dredging the river Elbe's navigation channel.
A number of steps were taken to pave the way for this success. These included investing in terminal expansion, measures to further optimise processes and enhance effi ciency, and competitive pricing incentives for European feeder traffi c. The new mega-ship berths at the HHLA Container Terminals Burchardkai and Tollerort successfully accompanied the increase in ship sizes.
The high throughput involved in handling many mega-ships is a real test of the terminals' performance capabilities, with peak volumes of up to 12,000 TEU to be loaded and discharged from a single vessel. HHLA succeeded in meeting these operating challenges and acquiring new services by making improvements across the board, from increasing productivity in quayside handling to optimising the steering of container yard and speeding up truck handling by means of selfservice terminals.
Although the earnings picture was clouded by a diffi cult market environment with surplus capacity at major competitors' terminals and falling freight rates for shipping companies, HHLA largely succeeded in translating higher volumes into revenue growth. Revenue in the Container segment was up 17.9 % at € 712.9 million (previous year: € 604.5 million) and thus lagged slightly behind volume growth. This was primarily attributable to the dual effect of European feeder traffi c, which accounted for 24.7 % in the 2011 fi nancial year, compared to 23.0 % one year earlier. Firstly, this traffi c generates smaller margins than mega-ship handling. Secondly, seaborne European feeder traffi c is additionally included in the terminals' throughput statistics, unlike landbased transportation by rail or road.
Operating expenses in the Container segment were slightly lower than revenue due to expansion projects at the terminals. Higher energy costs, increased servicing work and adjusted rates for the purchase of external services all led to a disproportionately high rise in the cost of materials compared to the previous year. Despite much more demanding peak loads and greater use of external staff twinned with ongoing expansion programmes and wage increases, the upturn in personnel expenses was slightly below average thanks to improved productivity. By contrast, the Group stepped up its utilisation of external services for maintenance work and consultancy projects to optimise working practices and terminal development. This prompted a substantial rise in other operating expenses. Depreciation and amortisation climbed further, predominantly as a result of further capital expenditure.
With growth of 25.6 % to € 195.5 million (previous year: € 155.7 million) in the 2011 fi nancial year, EBIT outstripped the increase in both volumes and revenue. This was partly due to the one-off effect of € 15 million in compensation received for the early termination of a lease and the return of space previously used by the empty container centre in the middle of the free port. HHLA recognised this payment in July 2011. See also Notes to the Consolidated Financial Statements, page 130.
In 2011, HHLA continued the strict implementation of its modernisation and expansion programmes. Capital expenditure focused on the Container Terminal Burchardkai, and in particular on extending the modern block storage facility, updating the straddle carrier fl eet for container transportation and preparing for the construction of an additional mega-ship berth. At the Tollerort terminal, work concentrated on a new mega-ship berth and the optimisation of its respective container store. Large ships with a carrying capacity of 13,000 TEU have been handled regularly at this berth since July 2011. Work also started on expanding the Container Terminal Odessa, which is being developed to handle larger container ships with deep-water berths and an enlarged terminal area.
| Key Figures | |||
|---|---|---|---|
| in € million | 2011 | 2010 | Change |
| Revenue | 357.6 | 317.3 | 12.7 % |
| EBITDA | 43.1 | 42.5 | 1.5 % |
| EBITDA margin in % | 12.1 | 13.4 | - 1.3 pp |
| EBIT | 24.6 | 24.8 | - 0.7 % |
| EBIT margin in % | 6.9 | 7.8 | - 0.9 pp |
| Container transport in thousand TEU | 1,887 | 1,696 | 11.3% |
In the 2011 fi nancial year, HHLA's intermodal companies posted double-digit growth in the volume of container traffi c they transported to the German seaports' European hinterland. At 1,887 thousand TEU (previous year: 1,696 thousand TEU), transportation volumes were up 11.3 % on the previous year, despite tough competition between carriers on the market. The Czech, Slovakian and Polish inland terminals which are by the majority owned by either HHLA or its subsidiaries recorded a similar increase in throughput. With volume growth of 13.5 %, they achieved throughput of 1,392 thousand TEU (previous year: 1,227 thousand TEU).
HHLA's long-term hinterland strategy made a substantial contribution towards this positive development. See also Corporate Strategy, page 63. Its aim is to boost the segment's earnings potential and pave the way for a disproportionately high increase in the percentage of container traffi c transported by rail. To achieve this, HHLA is raising its added value, for example by expanding its own inland terminals and constructing new ones and industrialising its processes. The HHLA subsidiary Metrans, for example, launched operations at a new inland terminal with an annual capacity of 200,000 TEU in the Czech city of Ostrava and purchased three locomotives, thus substantially raising the traction services it provides itself.
With the opening of the fi rst Polish hub terminal in Poznán in September 2011, an important step was also taken towards establishing the huband-shuttle system in seaport-hinterland traffi c with Poland – a system which has already proved highly successful in maritime container logistics in the Czech Republic and Slovakia. The use of shuttle trains reduces transport times between Hamburg and Poznán alone by a good third.
At € 357.6 million (previous year: € 317.3 million), revenue in the Intermodal segment increased by 12.7 % year-on-year in 2011 and thus outstripped growth in transport volumes. This was largely thanks to improvements in earnings quality achieved by increasing prices, raising the level of value generation through the use of the company's own locomotives and expanding the terminal network. The segment's EBIT result was unable to keep pace with the growth in volumes and revenue, shrinking instead by 0.7 % to € 24.6 million (previous year: € 24.8 million). This was mainly attributable to the factors laid out below.
In light of these developments, HHLA is stepping up its efforts to raise its added value by constructing further inland terminals and investing in rolling stock. The HHLA subsidiary Metrans started construction work on a second large container hub terminal in Česká Třebová, 180 km east of Prague, in spring 2012. In the fi rst phase of construction, this will create a state-of-theart facility with an initial handling capacity of 150 trains a week. It will complement the hub in Prague and cost approx. € 20 million. Operations at the hub terminal are due to commence in the course of 2012. This will enable the company to further optimise and increase container transport on routes to and from Hamburg as well as to and from Slovakia, Austria, Hungary and the eastern region of the Czech Republic.
| in € million | 2011 | 2010 | Change |
|---|---|---|---|
| Revenue | 126.7 | 120.2 | 5.4 % |
| EBITDA | 12.0 | 13.2 | - 9.2 % |
| EBITDA margin in % | 9.5 | 11.0 | - 1.5 pp |
| EBIT | - 1.0 | 6.2 | – |
| EBIT margin in % | - 0.8 | 5.1 | - 5.9 pp |
The companies of the Logistics segment offer a wide range of services in the fi eld of contract logistics, vehicle logistics, fruit logistics, special logistics and consultancy, thus setting Hamburg apart as an all-purpose port. In the 2011 fi nancial year, the various market segments served by the individual companies displayed highly diverging developments. While demand rose considerably for coal handling in the bulk cargo segment and for cruises, for example, market changes in fruit logistics, vehicle logistics and contract logistics resulted in a squeeze on revenue.
In detail, business developed as follows: fruit hand ling at the multi-function terminal O'Swaldkai fell by 6.5 % to 728 thousand tonnes (previous year 779 thousand tonnes), while coal and ore handling at the bulk cargo terminal Hansaport rose by 1.4 % to 13.9 million tonnes (previous year: 13.8 million tonnes). Developments in vehicle logistics at O'Swaldkai were somewhat differentiated: ve hicle throughput was up 10.5 %, due in particular to an increase in used vehicles. Warehousing logistics, however, suffered a strong decline.
Whereas consultancy business remained stable, cruise logistics recorded new records for both the number of ships docking in Hamburg and the volume of passengers processed there. 116 cruise ships (previous year: 99) and 313 thousand passengers (previous year: 248 thousand) passed through the port, corresponding to growth rates of 17.2 % and 26.2 %, respectively.
The 5.4 % rise in revenue to € 126.7 million (previous year: € 120.2 million) was attributable to the intra-Group settling of a major IT contract worth some € 10.4 million. Adjusted for this item, segment revenue declined in comparison with last year. Although EBIT was down 54.1 % after nine months, the segment succeeded in limiting the decrease in its operating result to - 23.3 % for the full fi nancial year 2011. As a result, segment EBIT before impairment reached € 4.7 million (previous year: € 6.2 million).
This trend was primarily attributable to lower earnings quality and higher lease expenses in vehicle logistics. Banana logistics were affected by a market shift towards more containerised banana transportation due to falling rates for reefers. Successful cost-cutting programmes in fruit logistics contributed towards improved earnings in this fi eld as the year progressed and thereby helped to stabilise EBIT at segment level.
€ 2.1 million or 44 % of the segment's operating EBIT before impairment (€ 4.7 million) was generated in the fourth quarter alone. The operating activities of the two companies HHLA Logistics and HHLA Logistics Altenwerder were pooled in one company as of 1 October 2011.
In response to the changed market situation for banana shipping, a one-off impairment charge of € 5.8 million was recognised in fruit logistics. This meant that the overall segment result (EBIT) for the fi nancial year was negative at € -1.0 million (previous year: € 6.2 million).
in the Logistics segment
| 2011 | 2010 | |
|---|---|---|
| Fruit handling in thousand tonnes |
728 | 779 |
| Vehicles and general cargo in thousand tonnes |
1,307 | 1,292 |
| Bulk cargo handling in million tonnes |
13.9 | 13.8 |
| Cruise ship calls | 116 | 99 |
| 2011 | 2010 | Change |
|---|---|---|
| 31.7 | 29.8 | 6.5 % |
| 16.2 | 16.8 | - 3.7 % |
| 51.1 | 56.5 | - 5.4 pp |
| 11.9 | 12.7 | - 6.1 % |
| 37.6 | 42.6 | - 5.0 pp |
The market for offi ce space in Hamburg picked up noticeably in the course of last year. According to the latest offi ce market overview by Jones Lang LaSalle, 540,000 m² of space was let in 2011 – 7.4 % more than in the previous year. This fi gure was well above the ten-year average of 442,000 m². Although the vacancy rate was below last year's fi gure of 9.6 %, it remained very high at 8.5 %.
Against this background, HHLA Real Estate successfully continued the value-oriented portfolio development of its properties in the Speicherstadt historical warehouse district and the Fischmarkt area on the northern banks of the river Elbe. New projects were placed on the market and lettings were up in both areas. Driven by these developments, revenue climbed by 6.5 % to € 31.7 million in the fi nancial year just ended (previous year: € 29.8 million). However, the implementation of planned major maintenance and refurbishment work in the Speicherstadt historical warehouse district meant that the positive revenue trend was not accordingly refl ected in earnings. As a consequence, EBIT fell 6.1 % year on year to € 11.9 million (previous year: € 12.7 million). The reclassifi cation of incidental rental expenses charged on to tenants, which as of 2011 are no longer shown as revenue but as other operating income, led to changes in the absolute fi gures for revenue and profi t margins. In order to facilitate comparison, the fi gures for the previous year have been restated accordingly. See also Notes to the Consolidated Financial Statements, page 130.
A large number of projects were rolled out and implemented in the 2011 fi nancial year. One particular highlight was the successful letting of the fully refurbished Block Q, which offers an attractive mixture of showrooms and offi ces used predominantly by the fashion industry. The tea emporium "Wasserschloss Speicherstadt" opened in late October 2011, underlining the traditional function of the Speicherstadt historical warehouse district as one of the world's largest tea trading centres. Another project highlights the profi le of the Speicherstadt as a creative centre: in November 2011, work started on the modernisation of a large building designated as a historical landmark, which will be used to house a major advertising agency.
Financial management at the HHLA Group is managed centrally and serves the overriding objective of ensuring the Group's long-term fi nancial stability and fl exibility. Group clearing pools the Group's fi nancial resources, optimises net interest income and substantially reduces dependency on external sources of funding. Derivative fi nancial instruments are used to lower 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 the positive business development in 2011, HHLA is in a 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 40.9 % (previous year: 40.1 %) before fi nancial settlements to minority shareholders. As a result of the profi t pooling contract concluded within the Container segment during the 2010 fi nancial year, there is a 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 a remaining period of four years. This payment is based primarily on future fi nancial results. The total anticipated fi nancial settlement therefore led to a balance-sheet reclassifi cation out of minority interests to other fi nancial liabilities from that time. Taking this balance sheet representation into account, the regular equity ratio now comes to 35.6 %.
Thanks to the company's liquidity base as of the balance sheet date, it has no signifi cant refi nancing requirements.
Infl ation and exchange rates have no material effect on the HHLA Group's fi nancial position.
When recognising assets and liabilities, estimates were based on past experience and other relevant factors and made on a going concern basis. See also Accounting and Valuation Principles/Signifi cant Assumptions and Estimates in the Notes, page 137 and 143.
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 € 331.6 million, its liabilities from bank loans were above their previous year's level (€ 298.9 million) in the 2011 fi nancial year. The Group drew on additional external fi nancing totalling € 65.7 million (previous year: € 0.0 million) in the reporting year. New fi nancing was offset by lower loan repayments. 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,
Maturities of Bank Loans
by year in € million
the company has no other signifi cant refi nancing requirements.
The majority of the liabilities from loans are denominated in euros, with a small proportion in the Czech koruna. In terms of conditions, approx. 64 % have fi xed interest rates and some 36 % have fl oating interest rates. As a result of borrowing, certain affi liates have covenants linked to key balance sheet fi gures, which mostly require a minimum equity ratio to be met. Covenants are currently in place for around 21 % of the loans. The covenants were met at all agreed audit points throughout the reporting year. As of the balance sheet date, HHLA posted non-current liabilities to related parties totalling € 93.7 million (previous year: € 65.8 million). These resulted from the recognition of the leasing liability to the 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 Notes to the Consolidated Financial Statements, page 130. 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 therefore available for long-term fi nancing.
Cash and cash equivalents, the bulk of which is held centrally by the holding company, totalled € 330.0 million (previous year: € 235.5 million) as of the reporting date. These funds are invested at domestic fi nancial institutions with verifi ed high credit ratings as demand deposits, call money and short-term deposits. Current credit lines play a subordinate role due to HHLA having suffi cient liquid funds. As of the balance sheet date, the Group had unused credit facilities amounting to some € 27.0 million (previous year: € 26.7 million). The credit line utilisation rate was 17.1 % in the period under review (previous year: 17.9 %). 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, € 30.3 million (previous year: € 21.5 million) was subject to restrictions in Ukraine relating to the transfer of currency abroad.
by segments, 2011
Investments, Depreciation and Amortisation
in € million
2IZKLFKƄQDQFHOHDVHVDPRXQWLQJ WRbPLOOLRQSUHYLRXV\HDU bPLOOLRQ *
As HHLA has a wide range of borrowing options at its disposal outside of the capital market, the Group currently sees no need for an external rating. Instead, it provides existing and potential creditors with comprehensive information to ensure that they can derive appropriate internal credit ratings.
Public subsidies awarded for individual development projects which are subject to specifi c conditions are of minor importance in terms of their volume at Group level.
The investment volume in the past fi nancial year totalled € 128.7 million and was lower than the previous year's € 173.8 million. This fi gure includes non cash-effective additions from fi nance lease amounting to € 32.8 million. As in the previous year, capital expenditure in 2011 focused on extending the handling facilities in Hamburg. Additionally, most of the investments due to be made to expand the Odessa terminal were postponed until the coming fi nancial year.
Property, plant and equipment accounted for € 117.2 million (previous year: € 158.9 million) of total capital expenditure, € 7.4 million (previous year: € 7.9 million) was for intangible assets and € 4.1 million (previous year: € 7.0 million) for investment property.
As in the previous year, expansion investments accounted for the bulk of capital expenditure. € 98.5 million (previous year: € 158.5 million) was primarily invested in extending and automating the container terminals in Hamburg. Replacement investments amounted to € 30.2 million (previous year: € 15.3 million); the majority of this was invested in straddle carriers.
The largest share of the Group's aggregate investment was accounted for by the Container segment with € 87.8 million (previous year: € 137.9 million). It invested above all in storage capacity at the handling facilities in Hamburg. A new quay wall was also completed.
Total investment in the Intermodal segment amounted to € 32.2 million, up on its previous year's level of € 21.0 million. The Metrans Group invested further in hinterland terminals and the procurement of locomotives. At the Polish companies, work continued on the planned expansion of the terminal network.
Total investments in the Logistics segment came to € 3.9 million (previous year: € 3.7 million). The majority of this expenditure went towards buying a used container gantry crane and investments in multifunctional devices and 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 optimisation of its logistics activities in line with market requirements.
As of year-end, there were fi nancial liabilities for outstanding purchase commitments totalling € 93.0 million (previous year: € 51.1 million). This fi gure includes € 81.4 million (previous year: € 44.2 million) for the capitalisation of property, plant and equipment.
| in € million | 2011 | 2010 |
|---|---|---|
| Financial funds as of 01.01 |
213.7 | 139.2 |
| Cash fl ow from operating activities |
266.1 | 206.9 |
| Cash fl ow from investing activities |
- 138.0 | - 36.3 |
| Free cash fl ow | 128.1 | 170.7 |
| Cash fl ow from fi nancing activities |
- 45.9 | - 95.2 |
| Change in fi nancial funds | 82.2 | 75.5 |
| Change in fi nancial funds due to exchange rates |
- 1.1 | - 1.0 |
| Financial funds as of 31.12 |
294.8 | 213.7 |
Cash fl ow from operating activities (infl ow) rose to € 266.1 million (previous year: € 206.9 million) in the reporting period, primarily due to the positive earnings trend.
The cash fl ow from investing activities (outfl ow) totalled € 138.0 million and was therefore also considerably higher than the previous year's € 36.3 million. This was mainly attributable to payments made for investments in property, plant and equipment, investment property and intangible assets amounting to € 132.2 million (previous year: € 64.4 million). The fi gure includes payments made for new assets not settled in the previous year. Similarly, the increase in short-term investments of € 10.0 million led to a higher cash fl ow from investing activities (previous year: decrease of short-term investments of € 20.0 million). This was partially offset by proceeds from disposals of € 5.2 million (previous year: € 12.1 million.)
The free cash fl ow – the total cash fl ow from operating and investing activities – decreased to € 128.1 million from its previous year's level of € 170.7 million.
Cash fl ow from fi nancing activities (outfl ow) came to € 45.9 million (previous year: € 95.2 million) in the reporting period and was dominated by dividend payments to shareholders and minority shareholders for the 2010 fi nancial year totalling € 78.2 million (previous year: € 61.3 million). Debt repayments came to € 27.2 million (previous year: € 31.3 million) and also contributed to this cash outfl ow. Payments of € 65.7 million were received in conjunction with borrowing, which counteracted this outfl ow.
With regard to its overall fi nancial position, the HHLA Group has suffi cient liquidity as of yearend 2011. There were no liquidity bottlenecks in the course of the fi nancial year. Financial funds are made up of cash and cash equivalents (€ 330.0 million) offset by short-term deposits at banks (€ 30.0 million), liabilities from short-term borrowing at HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH (€ 0.5 million) and current liabilities to shareholders outside the Group and banks (€ 4.7 million). The fi gure amounted to € 294.8 million as of 31 December 2011 and was therefore much higher than at the beginning of the year (€ 213.7 million).
No acquisitions or disposals of companies were carried out in the 2011 fi nancial year, therefore there has been no effect on the Group's fi nancial position.
Compared with the end of 2010, the HHLA Group's balance sheet total increased as of 31 December 2011 by a total of € 96.4 million to € 1,811.5 million.
On the assets side, non-current assets amounted to € 1,280.1 million – lower than the fi gure from the previous year (€ 1,290.7 million). This resulted primarily from a fall in deferred tax receivables.
Current assets climbed to € 531.5 million (previous year: € 424.5 million). This rise resulted largely from cash and cash equivalents increasing to € 330.0 million (previous year: € 235.5 million).
in %
as of 31.12. in € million/in %
Trade receivables also rose to € 151.8 million (previous year: € 126.5 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 € 3.6 million (previous year: € 21.0 million).
On the liabilities side, equity was up € 77.7 million at € 644.7 million (previous year: € 567.0 million) compared with year-end 2010. This was mainly due to consolidated net income of € 118.8 million included in retained earnings. Overall, the equity ratio climbed to 35.6 % as a result (previous year: 33.1 %).
Non-current liabilities increased to € 877.6 million as of the balance sheet date (previous year: € 850.0 million). This rise resulted primarily from the growth in liabilities to related parties caused by the recognition of leasing liabilities in connection with the opening of another mega-ship berth at the CTB. Borrowing had a corresponding effect on non-current fi nancial liabilities. Use of a higher discount factor to calculate the present value of pension obligations (5.0 %; previous year: 4.5 %) counteracted this development. The associated actuarial effects played a major role in the € 17.4 million drop in pension provisions to € 313.7 million (previous year: € 331.1 million).
Current liabilities fell by € 8.9 million to € 289.3 million (previous year: € 298.2 million). This reduction was largely brought about by the decrease in other liabilities to € 25.6 million (previous year: € 34.6 million) and a € 5.0 million fall in trade liabilities to € 72.0 million. Income tax liabilities went down from € 5.6 million in the previous year to € 2.5 million. There was an opposing trend in other current provisions, which increased by € 6.9 million to € 28.8 million, as well as in current liabilities to related parties which rose to € 72.1 million (previous year: € 68.0 million).
The debt coeffi cient as a ratio of net fi nancial liabilities and pension provisions to Group equity (gearing ratio) was 0.9 (previous year: 1.1) as of the balance sheet date of 31 December 2011. The lower fi gure resulted predominantly from an increase in cash and cash equivalents and growth in equity.
The subscribed capital of the company is now € 72,679,826.00. It is divided into 72,679,826 nopar-value shares, including 69,975,326 Class A shares and 2,704,500 Class S shares (classes of shares). The Class S shares constitute only shareholdings in the net profi t/loss and net assets of the S division, and the Class A shares constitute only shareholdings in the net profi t/ loss and net assets of the remainder of the company (A division). That part of the company which deals with the acquisition, holding, selling, letting, management and development of properties not specifi c to port handling (Real Estate subgroup) is known as the S division. All other parts of the company (subgroup Port Logistics) are known as the A division. The dividend entitlement of holders of Class S shares is based on the proportion of the distributable profi t for the year attributable to the S division, and the dividend entitlement of holders of Class A shares is based on the remaining proportion of distributable profi t for the year (articles of association, Section 4 [1]). Each share entitles the holder to one vote at the Annual General Meeting (articles of association, Section 20 [1]) and gives the holder the rights and responsibilities laid down in the German Stock Corporation Act (AktG). If the statutory provisions require a special resolution to be adopted by holders of a given class of shares, only the holders of that class of shares shall be entitled to vote.
To the Executive Board's knowledge there are no restrictions on voting rights or the transfer of shares, including those arising from agreements between shareholders.
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 Gesell schaft 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 authorised 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 steps taken in accordance with the German Reorganisation of Companies Act (UmwG), special resolutions by the Class A and Class S shareholders affected are required as per Section 138 of the German Stock Corporation Act (AktG).
7.1 Subject to the approval of the Supervisory Board, the Executive Board is authorised under 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 (Authorised Capital I). The statutory subscription right of the holders of Class S shares shall be excluded. The Executive Board was further authorised – with the approval of the Supervisory Board – to exclude the statutory subscription rights of holders of Class 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 equalising 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 authorised 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 (Authorised Capital II). The statutory subscription right of the holders of Class A shares shall be excluded. The Executive Board was further authorised, with the approval of the Supervisory Board, to exclude the statutory subscription rights of holders of Class S shares as is necessary to equalise fractional amounts.
7.3 The company's nominal capital is increased contingently as per 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 2011 authorised the company until 15 June 2016 to acquire Class A shares in the company amounting to up to 10 % of the current nominal capital attributable to Class A shares. Together with other Class A shares held by the company or attributable to it under Section 71a et seq. of the German Stock Corporation Act (AktG), the Class A shares acquired may not at any time constitute more than 10 % of the company's nominal capital accounted for by Class A shares. This authorisation may not be used for the purpose of trading in its own shares. The authorisation may be exercised in whole or in part, in one or more stages, for one or more purposes, by the company or its affi liates or for its or their account by third parties. At the discretion of the Executive Board, the purchase can be made via the stock exchange or by means of a public purchase offer made to all Class A shareholders or by means of a public request for a purchase offer.
(1) If the Class A shares are acquired via the stock exchange, the amount paid by the company per Class A share (excluding incidental purchasing costs) may not be more than 5 % above or below the average market price of the company's Class A shares in the Xetra fi nal auction (or a similar successor system) on the Frankfurt Stock Exchange on the last fi ve trading days before purchase.
(2) If the purchase is made by means of a public offer to all Class A shareholders or a public request for a purchase offer, this is permissible if the price or the threshold of the price range offered per Class A share (excluding incidental purchasing costs) is not more than 10 % above or below the average market price for the company's Class A shares in the Xetra fi nal auction (or a similar successor system) on the Frankfurt Stock Exchange on the last fi ve trading days before publication of the decision to make the purchase offer or the public request for a purchase offer. If the defi ning stock price is signifi cantly different after a publication of a purchase offer or a public request for a purchase order, the offer or the request to submit such an offer can be amended. Any amendment made in these cases is made on the basis of the average market price for the company's Class A shares in the Xetra fi nal auction (or a similar successor system) on the last fi ve trading days before publication of any amendment. The volume of the offer may be restricted. If the total acceptance of the offer exceeds this volume, the purchase must be pro rata. Preferential purchases of up to 100 Class A shares in the company per shareholder may be admitted subject to the partial exclusion of any possible rights of other shareholders to offer their Class A shares. The purchase offer or the public request for a purchase offer may contain further conditions.
7.4.2 The Executive Board was also authorised, subject to the approval of the Supervisory Board, to use Class A shares purchased under the authorisation to acquire the company's own Class A shares for any legally permissible purpose, including the following:
(1) The Class A shares can be resold by means other than the stock exchange or an offer to all Class A shareholders, provided these Class A shares are resold at a price which is not signifi cantly lower than the price of shares in the company of the same rights at the time of the sale. The defi ning market price for the purposes of this regulation is the average share price of the company's Class A shares in the Xetra fi nal auction (or a similar successor system) on the Frankfurt Stock Exchange over the last fi ve trading days before the sale of the company's own shares. In these cases the number of shares to be sold, together with the new shares issued under Section 186 (3) sentence 4 of the German Stock Corporation Act (AktG) since this authorisation came into effect, excluding subscription rights, must not exceed 10 % of the company's nominal capital in the form of Class A shares at the time this authorisation comes into effect and is exercised.
(2) The Class A shares can be sold as payment in kind to third parties, particularly in the course of mergers with other companies or in order to acquire companies, equity stakes or parts of companies.
(3) The Class A shares can be used to settle rights or obligations held by bearers or creditors under convertible bonds or bonds with warrants issued by the company or by companies in which the company holds a majority stake.
(4) The Class A shares can be transferred or offered for purchase to employees of the company or affi liated companies.
(5) The Class A shares can be redeemed in full or in part without a further resolution by the Annual General Meeting. They can be redeemed in a simplifi ed process in accordance with Section 237 (3–5) of the German Stock Corporation Act. The authorisation to redeem shares can be made use of multiple times. If the shares are redeemed in a simplifi ed process in accordance with Section 237 (3) (3) of the German Stock Corporation Act, the Executive Board is authorised to adjust the number of no-par-value shares in the articles of association.
7.4.3 The right of shareholders to subscribe for the company's own shares is excluded if these shares are used in accordance with the aforementioned authorisations in 7.4.2 items 1 to 4.
7.4.4 The authorisations in 7.4.2 items 1 to 5 also cover the use of shares in the company acquired on the basis of Section 71 (d) sentence 5 of the German Stock Corporation Act.
7.4.5 The authorisations in 7.4.2 can be exercised on a one-off or repeated basis, in whole or in part, and separately or jointly. The authorisations of 7.4.2 items 1 to 4 can also be exercised by independent companies or companies in which the company holds a majority stake or third parties acting for their own account or for the account of the company.
7.5 The Annual General Meeting on 16 June 2010 authorised the Executive Board, subject to the approval of the Supervisory Board, to issue on one or more occasions up to 15 June 2013 bearer or registered bonds with warrants or convertible bonds (hereinafter known collectively as "debenture bonds") and to grant the bearers or creditors of the debenture bonds warrants or conversion rights for new Class A company shares subject to the detailed terms of the debenture bonds. The total nominal amount of the debenture bonds issued under this authorisation may not exceed € 400,000,000.00. Option and conversion rights may only be issued for Class A company shares accounting for up to € 6,900,000.00 of the company's total nominal capital accounted for by Class A shares. Class S shareholders' subscription rights are excluded. The Executive Board is authorised, subject to the approval of the Supervisory Board, to exclude Class A shareholders' subscription rights to the debenture bonds in full or in part,
I for fractional amounts;
Even if the conversion ratio, exercise price or conversion price are variable, the conversion or exercise price set for one Class A company share (issue price) must be equivalent to either
Group Management Report 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
97
7.6 Under Section 6 of the articles of association and Section 237 (1) of the German Stock Corporation Act (AktG), the company is authorised to mandatorily redeem Class A or S shares against payment of appropriate compensation if the shareholders whose shares are to be redeemed have given their consent.
The company has no signifi cant agreements dependent on a change of control resulting from a takeover bid.
The contracts of employment with the Executive Board members valid during the reporting period contain clauses which provide for a payment to the respective Executive Board members in the event of them losing their Executive Board seats due to a change of control or similar circumstances. The agreed amount to be paid is the remaining remuneration for the residual terms of their respective contracts of employment, payable to each in one lump sum discounted by 2 % p.a. In calculating this severance pay, the future entitlement to payment of a bonus is calculated based on the average annual net profi t for the preceding three full fi nancial years. If an Executive Board member earns additional income in the period up to the original end of his or her contract or employment, this income is in some cases set off against the severance payment up to a certain amount.
The provisions described above correspond to the legal situation and are standard practice at comparable listed companies. Their intention is not to complicate any possible takeovers.
HHLA's risk management system fosters a keen awareness of dealing with corporate risks. It aims to identify risks in good time and take steps to manage or avert them, thereby preventing situations which could jeopardise the continued existence of the HHLA Group. An important element of the system is 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 organisational 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 system covering economic and ecological activities and its business operations. This system is 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 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 categorised by the likelihood of their occurrence and the amount by which such an occurrence would reduce the operating result or cash fl ow before taxes.
When assessing a risk, the level of loss or damage plus the anticipated probability must be stated. A distinction is made here between the gross risk (excluding reduction and management measures) and the net risk (including reduction and management measures). 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 continu-
Review Report
ously 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 system and risk reporting are described in a corporate guideline. The Internal Audit department is responsible for auditing the risk management system. The external auditors also assess the early detection system as part of their audit of the annual fi nancial statements.
HHLA's internal control system is designed to ensure that the (fi nancial) reporting processes used throughout the company are consistent, transparent and reliable. Furthermore, it makes sure they comply with legal standards and the company's own guidelines. It comprises principles, procedures and methods designed to reduce risk and ensure the effectiveness and propriety of HHLA's processes.
The internal control system is regularly monitored and assessed according to documented pro cesses, risks and controls. 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 specifi c accounting risks. There is also a latent risk of error when processing non-routine transactions. Employees are by necessity given a certain amount of leeway when recognising and measuring balance sheet items, which can give rise to further risks.
Internal controls are intended to reduce accounting risks and make sure that transactions are documented, recorded, processed and assessed correctly in the balance sheet, as well as being 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 authorisation functions and giving these responsibilities to different members of staff reduces the risk of fraud. Multi-stage approval and authorisation thresholds for ordering, payment transactions and accounting are employed across the Group. These include using the double-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. Like the accounting manual, they are reviewed regularly and updated if necessary.
Most bookkeeping procedures are recorded using accounting systems developed by SAP. For the purposes of preparing HHLA's Consolidated Financial Statements, subsidiaries add more information to their separate fi nancial statements to form standardised report packages, which are then fed into the SAP EC-CS consolidation module for each individual company.
Measures are in place to protect the IT systems from unauthorised access. Access rights are granted in line with each user's role. Only those departments responsible for mapping transactions are given write access. Departments responsible for processing information use read access. Detailed function-related authorisations are defi ned in a set of SAP authorisation guidelines. IT security guidelines also cover access to IT systems in general.
External service providers are used for pension reports, fi scal issues and for other reports and projects if necessary.
The specifi c formal requirements for the consolidation process pertaining to the Consolidated Financial Statements are clearly defi ned. In addition to a defi nition of the consolidated group, there are also detailed rules requiring affi liates to use a standardised and complete report package. There are also specifi c provisions regarding the recording and handling of Group clearing transactions and subsequent balance reconciliations, or the determination of the fair value of shareholdings. As part of consolidation, the Group accounting team analyses the separate fi nancial statements submitted by affi liates and corrects them if necessary. Incorrect information is identifi ed and corrected as necessary using control mechanisms already present in the SAP EC-CS system or using system-based plausibility checks.
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 draught of 13.50 m throughout, and 14.50 m depending on the tides, is of considerable signifi cance. Negotiations are currently underway as part of the plan approval process to enable planning approval to be granted as soon as possible. Based on the information currently available, this will happen in 2012. Excavation work can commence once the planning approval decision is enforceable. An appeal against planning approval cannot be ruled out, however. Radical improvements for tidal shipping should start to emerge around nine months after construction work has begun.
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 may 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 earnings and fi nancial position.
As well as dredging the shipping channel, the regional road and rail infrastructure must be modernised and expanded if the Port of Hamburg wants to remain competitive and optimise its processes for the inbound and outbound fl ows of goods in its hinterland. Projects of this kind with special signifi cance for business at the port include constructing the transversal port motorway (A252), modernising the locks 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 recently downgraded their forecasts for global economic growth in 2012.
Considerable risks remain due to the volatile macroeconomic environment. One such risk factor is the ongoing sovereign debt crisis in the eurozone, which is jeopardising general economic developments. The question of how budget defi cits can be fi nanced sustainably remains unanswered and is fostering a great deal of uncertainty on the fi nancial markets. The necessary consolidation measures and dwindling investments threaten to impair further economic development.
Government intervention by means of monetary policy or the introduction of trade restrictions – such as compensatory tariffs designed to boost a country's own competitiveness – could prompt a wave of protectionist moves, which would hamper world trade.
Prices for commodities such as oil, copper and rare earths may hinder economic developments. If prices do not fall during a phase of contraction, this could also damage the global economy.
Should container throughput, transport volumes or logistics services fail to develop as expected because economic uncertainty has grown since the previous year, planned volumes may not be achieved. This may lead to an underutilisation of handling capacity and train systems. Underutilisation generally entails the risk that it might not be possible to compensate fully for negative divergences in earnings in the short term due to the high level of fi xed costs.
Terminal operators in the Hamburg-Antwerp range are gradually bringing the expansion of their handling capacities to a close. The supply of container throughput capacity still far outstrips demand. Drewry and the Bremen-based Institute of Shipping Economics and Logistics (ISL) still anticipate an underutilisation of capacities in Northern Europe over the coming years. A surplus of this kind may lead to even greater competition.
HHLA works with almost all the major global shipping companies in container traffi c. The industry is undergoing an intense process of consolidation, which has been exacerbated by overcapacities and the diffi cult earnings situation of shipping companies. Mergers and alliances among shipping companies, as well as between terminal operators and shipping companies, may result in a change in freight fl ows and the pricing structure currently in place between handlers in Northern Europe.
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.
The Intermodal companies are exposed to 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 Central and Eastern Europe, poses the risk that market share will shift to the detriment of rail operators in which HHLA has interests.
In the Logistics segment, there is a risk that it may prove impossible to achieve the planned revenue targets in a diffi cult market environment, especially in the fruit handling and warehousing logistics divisions.
In order to confront these sales risks, HHLA takes specifi c steps to reinforce customer loyalty and develop unique selling points in all of its segments. The Group is also making use of its fl exibility in cost and capacity management. HHLA's strategy is to adapt its investments in expanding the container terminals as fl exibly as possible to foreseeable demand. Throughput and transport volumes in the affected markets are monitored together with the throughput volumes and service structure of each client, so that any negative developments can be recognised at an early stage. HHLA counters market risks 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.
A limited number of companies supply port handling equipment and systems. This could lead to bottlenecks in the procurement of replacement parts and changes to purchasing agreements. In response to this, HHLA constantly looks at alternative procurement strategies and diversifi es its purchasing activities where necessary. HHLA also works closely with strategic suppliers in a spirit of partnership. In coordination with HHLA's departments and affi liates, relevant consolidation processes in the markets for handling equipment are also carefully monitored and taken into account when awarding contracts. HHLA also continually tracks its suppliers' credit ratings by means of a monitoring system.
The HHLA companies operating in the Intermodal segment purchase signifi cant traction, carriage and network services from a small number of high-performance rail companies. This leads to a certain amount of dependence on one, or a small number of, service providers. 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 service providers charging excessive usage fees. In order to minimise this dependence, the Intermodal companies maintain regular contact with the relevant service providers, some of which are HHLA shareholders.
The failure of central technical equipment can restrict the ability of equipment-based com panies 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 centralised responsibility for fi nancing its affi liates. Financing of the direct equity holdings where HHLA exercises operational control is safeguarded, controlled and monitored by HHLA by means of a cash pooling arrangement. Liquidity at the other Group equity holdings is ensured by, for example, including them in the Group's clearing system, arranging for their own credit lines or giving them access to those of HHLA.
As a result of borrowing, certain affi liates have covenants linked to key balance sheet fi gures. Violating these covenants would authorise the lender to demand additional collateral, a change in conditions or the repayment of the loan. In order to prevent such steps, HHLA constantly monitors compliance with the covenants and, where required, implements measures to ensure that all conditions of the loan are met. As of 31 December 2011, the
relevant total borrowings came to € 67.5 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, 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 Note 46 in the Notes to the Consolidated Financial Statements, page 173.
The bulk of HHLA's services are rendered within the eurozone, 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 minimises 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 euro or US dollar accounts. 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.
Predatory competition is currently rife in the global container transport industry, which is manifesting itself in an endless series of new ship orders and persistently low rates. It is therefore impossible to rule out client bankruptcies. 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 minimise default risks. Should the fi nancial position of specifi c debtors change signifi cantly, the insurer may limit the amount of cover it offers for new receivables payable by these debtors and/or no longer be able to provide cover.
Economic developments at certain affi liates remain diffi cult. This could make it necessary to write down the carrying amount of holdings. 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 a result, we may see more EU guidelines and their translation into national law over the next few years.
Starting in 2015, the sulphur limits for the fuel used by ocean-going vessels in the North Sea and the Baltic are set to be reduced from their current maximum of 1 % to 0.1 %. 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 make transportation costlier, there is a risk of traffi c shifting and competition being distorted.
HHLA's ability to operate relies to a large degree on the skills of its staff. For this reason, the HHLA Group is exposed to individual risks resulting from the age distribution of its workforce, their qualifi cations and training, and fl uctuation among key personnel. In order to minimise such risks, staff selection, recruitment and development are carried out centrally by HHLA Holding in coordination with the subsidiaries and associated companies using standardised 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 standardised procedure is used to assess managers and help them to develop. This procedure allows HHLA to recognise 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 as part of its compliance management system. Furthermore, the Group has issued a code of conduct which applies to all HHLA managers and staff. Training sessions are held regularly on the contents of the code of conduct. New employees and apprentices also receive training on the code. Regular induction and training sessions focusing on special issues are also held for
relevant groups of staff. These cover topics such as occupational health and safety, environmental protection, conduct in the competitive environment, preventing corruption and insider trading rules.
As part of the expansion of terminal capacity, major investments were made in hardware and software components. Ever-greater process automation, increasing integration of customers and service providers into organisational processes and the consequent growth of data transfer mean that the availability of IT systems is becoming increasingly important. Redundant copies of key IT components such as computing centres, computer networks and telecommunications systems substantially reduce the probability of downtime.
IT security and SAP authorisation guidelines defi ne the responsible operation of IT systems and serve to prevent IT security violations.
All of the handling sites within the HHLA Group offer ships and port facilities maximum protection against potential terrorist attacks. The requirements of the International Ship and Port Facility Security Code (ISPS Code), which took effect in 2004, are met in full.
Generally speaking, the competent authorities worldwide are looking to tighten the security guidelines in maritime transport even further. These measures would lead to additional costs which it may not be possible to fully recoup, or which cannot be passed on due to the competitive situation. HHLA makes its position clear by means of lobbying and public relations work in the hope of achieving a sensible, economically viable solution.
Increases in rents in the years ahead are expected as a result of contractual step-up clauses in leases for quays and other areas. Planning authorities may require supplementary conditions to be fulfi lled when granting permission for container terminal capacities to be expanded. These conditions can relate in particular to environmental and emission protection measures. There is also a general risk of further legal obligations if the project turns out to have any unforeseen negative consequences.
As a result of the existing structural situation and the fact that HHLA's port facilities and buildings operate close to water, a risk of storm fl ooding must be assumed. Flood protection work undertaken by HHLA and the Free and Hanseatic City of Hamburg in recent years has reduced this risk considerably, however. Should this risk ever become reality, comprehensive emergency programmes have been put in place by public authorities and companies operating in the port to minimise the potential damage. Additionally, anticipated third-party claims for damage to property are insured against.
The HHLA Group companies are active in Central and Eastern Europe via terminals operated there. The general environment in some parts of these countries is different from that in Western Europe, with less political, economic and legal stability. As a result, the HHLA Group is exposed to a number of factors which it cannot infl uence directly and which could have an impact on its commercial activities in these countries. In particular, it cannot be ruled out that for political or legal reasons, HHLA may not receive all or some of the profi ts it generates.
Above and beyond the risks mentioned, no further signifi cant risks have currently been identifi ed, while those that do exist are largely insured against.
Strategic Opportunities
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 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 hand ling. The shift in container traffi c from road to rail could be accelerated by new environmental policies in the future.
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 stabilisa tion of fi nancial markets and the further growth of the global economy.
HHLA has a sound balance sheet structure and a low gearing ratio by industry standards. This means that HHLA has various options for fi nancing investments and shareholdings. In addition to the above, HHLA continually assesses the extent to which strategically advantageous acquisition or investment possibilities are available.
The HHLA Group's overall risk position is determined largely by uncertainties surrounding the future development of the global economy and by strategic and market risks. Overall, there has been a slight increase in residual risks after tak-
I Dependence on the expansion and maintenance of public infrastructure (including nautical accessibility)
I Limited cost fl exibility due to capitalintensive business model
I Considerable investments needed for large equipment and terminal development
I Immobility of handling facilities and inland terminals
ing countermeasures into account. This is due to the uncertain macroeconomic environment.
The risks identifi ed do not threaten the existence of the Group. As far as the future is concerned, there are also no discernible risks at present which could jeopardise the continued existence of the company.
As the macroeconomic prospects are fraught with uncertainty, this description of risks merely serves as a snapshot. The HHLA Group's quarterly reports contain updated information on any changes to the company's risk position.
There were no signifi cant events after the balance sheet date on 31 December 2011.
The economic outlook for 2012 is currently domin ated by an exceptional high level of uncertainty. A viable solution to the sovereign debt crisis in the eurozone and the USA is yet to be found, and the risks of an economic downturn have increased considerably in the light of massive public spending cuts and the persistently unstable state of the fi nancial sector. This leads to a trend enforcing the general reluctance regarding stock ordering, investments and consumer spending. The situation is further exacerbated by the restricted lending ability of many banks. As the global economy is heavily interconnected, the export-oriented emerging and developing countries are also greatly affected by restrained demand from the industrialised nations.
In the light of this adverse economic climate, both the World Bank and the International Monetary Fund (IMF) recently downgraded their economic forecasts for 2012 noticeably. Applying the IMF's base case scenario gives rise to moderate projected global economic growth of around 3 %. Due to the multiplier effects of a globalised div ision of labour, the growth forecast for world trade has been scaled down even more substantially to nearly 4 %.
This scenario is based on key assumptions including a gradual decrease in uncertainty as the year progresses and stronger economic growth in the second half following a muted start to the year. It also assumes that the geopolitical tension between the international community and Iran will not trigger sustained disruption to mineral oil supplies or a further escalation.
Once again, economic growth in those regions of prime importance for the business development of HHLA is likely to differ strongly in 2012. Although Asia's economic expansion is expected to be affected by the debt crisis of the industrialised nations and the resulting fall in exports, the IMF still anticipates comparably strong economic growth of over 7 % in this region. Despite stepping up efforts to prevent overheating, somewhat stronger growth of around 8 % is predicted for China. The People's Republic would therefore remain one of the most important drivers of growth in the global economy.
Due to the infl uence of the euro crisis, ongoing capital outfl ows and dwindling external economic stimuli, the IMF believes that economic growth in Central and Eastern Europe will slow to around 1 %. Meanwhile, Russia's economic output is expected to record further robust growth of some 3 %.
In the wake of its fi scal consolidation efforts, the eurozone is likely to experience recession in 2012 with the member states in Southern Europe being hit hardest. However, it is anticipated that this downturn will be mild overall and relatively short, prompting the eurozone's gross domestic product (GDP) to shrink by less than 1 % over the full year. The economy of the European Union as a whole looks set to more or less stagnate this year. The IMF expects a similar fate for Germany's GDP, although it believes that the country will probably recover faster than the rest of the eurozone. In contrast to previous years, growth is expected to be driven above all by Germany's domestic economy. Following on from the recent upturn in its economic prospects, the IMF estimates that the US economy could grow by almost 2 %, although structural problems and high unemployment will continue to hamper growth.
Based on the developments described above, market research institutes such as Drewry Shipping Consultants and Clarkson anticipate reduced growth of between 5 and 6 % in worldwide container throughput for 2012. While above-average growth rates are predicted again for container traffi c within Asia and transport volumes in Latin America, the forecasts for Northern European ports suggest considerably more restrained growth of 1 to 2 %.
Driven by a rising concentration of rival providers in the growing emerging markets, fi erce competition in handling and transport services looks set to shape HHLA's market environment again in 2012. Container shipping companies are expected to face persistently high fuel costs and ongoing pressure on earnings. The anticipated delivery of over 250 container ships with a combined capacity of some 1.5 million TEU will drive carrying capacity up by more than 8 %, taking it well above the projected development in demand. About half of the additional cap acity will be attributable to over 50 new container megaships, each with space for 10,000 TEU or more, which will primarily be used on the trade route between Asia and Europe. Given the surplus stowage capacity, experts from the shipping industry anticipate far-reaching consolidation moves in the shape of partnerships, alliances and possibly also some market exits.
This development will be fl anked by the creation of additional handling capacity at the ports along the Northern European coast in 2012. Operations are due to commence at JadeWeserPort in Wilhelmshaven, a new terminal site on Germany's North Sea coast, in the second half of the year. As volume trends are expected to prove modest, surplus handling capacity can also be anticipated in Northern Europe for some time to come. This will place corresponding pressure on the earnings potential of terminal operators.
Considering the development at the seaports, the freight volume for continental pre- and onward-carriage systems looks likely to increase at a slower pace than in the previous year, when strong growth was recorded. Transport volumes and fi gures – including transit traffi c – are therefore expected to grow by a low single-digit percentage. Developments on the routes served by the affi liates in the Intermodal segment are likely to vary, depending on the core region they provide links to. However, respondents to a survey by the German Association for Materials Management, Purchasing and Logistics (Bundesverband Materialwirtschaft, Einkauf und Logistik e.V.) expect capacity utilisation in rail and road traffi c to improve as a result of constant or falling stowage capacity, which most believe will prompt transport prices to rise. The proportion of intermodal traffi c using rail transport is also expected to increase further.
Given the uncertain macroeconomic outlook, a slight deterioration of business and orders is also expected for the logistics service sector in 2012. The market environment for the affi liates in the Logistics segment is likely to develop differently for each submarket. Steel production is expected to grow by 3 to 4 % during the forecast period, with an effect on bulk cargo handling of iron ore and coal. Despite tougher competition, the German automotive industry – which purchases vehicle transshipment services – anticipates stable car output on a par with the previous year's record level. While the increasing containerisation of perishable goods and the shift in consignment and storage activities will continue to exert pressure on volume developments in fruit and contract logistics, the number of cruise ships booked to dock at the port leads HHLA to expect another remarkable increase in handling services.
In 2012, HHLA aims to utilise the abovementioned market trends to drive revenue growth in the region of 5 % at Group level. Despite persistent pressure on earnings, the Group aims to make effi ciency gains to the extent of a double-digit millions sum. By compensating for volume and infl ation-related cost increases in this way, the company intends to achieve a proportionate improvement in its operating result (EBIT) and thereby post a stable margin on the level of the previous year.
The development will again depend to a large extent on the listed subgroup Port Logistics.
| Gross domestic product | 2012 |
|---|---|
| Global economy | approx. 3 % |
| Germany | 0 – 1 % |
| Asia | approx. 7 % |
| Central and Eastern Europe | approx. 1 % |
| Global trade | approx. 4 % |
|---|---|
| Container throughput, worldwide | 5 – 6 % |
| Container throughput, Northern Europe | 1 – 2 % |
| Transport volume, Germany | 2 – 3 % |
Source: IMF, Drewry, Clarkson, Federal Offi ce for Freight Transport
I Revenue growth in the region of 5 % (revenue in 2011: € 1,217 million)
Group targets
EBIT margin
Revenue growth
EBIT margin
Real Estate
I In the region of the previous year (2011: 37.6 %)
| Container | Intermodal | Logistics | Real Estate |
|---|---|---|---|
| Container throughput: I Above market growth in the region of 5 % (2011: 7,087 TTEU) |
Container transport: I Above market growth in the region of 5 % (2011: 1,887 TTEU) |
I Heterogeneous develop ments in specialised market segments |
The Real Estate segment is equivalent to the Real Estate subgroup |
| I Slightly below volume growth (2011: € 713 million) |
I Above volume growth (2011: € 358 million) |
I Below the previous year (2011: € 127 million) |
(see section above). |
| I Below the previous year (2011: 27.4 % incl. income from compensation) |
I Improvement on the previ ous year (2011: 6.9 % incl. impairment charge) |
I Improvement on the pre vious year (2011: - 0.8 % incl. impairment charge) |
| Positive case scenario | Negative case scenario | |
|---|---|---|
| Conditions | I Swift and effective solution to the sovereign debt crisis I More stable bank lending situation I Continuous strong economic growth I Considerably improved capacity utilisation I Decreasing price competition I Prompt start to the dredging of the Elbe waterway |
I Sovereign debt crisis escalates I Increasing instability in the fi nancial sector I Recession sets in again I Deterioration in capacity utilisation I Ruinous price competition I Delay in dredging the Elbe waterway |
| Group performance | I Revenue growth of over 5 % I EBIT margin above previous year |
I Revenue comparable to the previous year's or lower in the case of a renewed crisis environment I EBIT margin lower than the previous year's or focus on maintaining double-digit margin if conditions deteriorate markedly |
I Concentration on safeguarding fi nancial stability
In its core line of business, HHLA will continue to focus its efforts on outperforming the market with growth in its handling and transport services in 2012. Besides somewhat stronger growth in HHLA's key originating and destination regions than in the catchment areas served by its major rival ports, particularly additional improvements to its service offering are supposed to contribute to expanding the market position. Consistently fi erce competition and the delay in dredging the Elbe's navigation channel heavily restrict the company's ability to pass on cost increases, therefore, the Group will strive to achieve a largely stable level of earnings quality.
On the cost side, general price increases – especially for energy sources and external services – are expected to drive up expenses, which will also rise in conjunction with higher volumes. As the number of mega-ships docking at the port is about to increase further, the company will have to compensate for the Elbe's tide restrictions by speeding up its handling processes and once again coping with immense peak loads in 2012. HHLA intends to cushion the pressure on margins which this exerts by improving its capaci ty utilisation and gradually enhancing effi ciency with the help of further technological developments and new work structures. These should bear fruit especially in the second half of the year. The effective tax rate for 2012 is expected to be in the region of 30 % again due to the absence of non-recurring tax effects. HHLA does not expect the atypical fall in the share of profi ts paid to minority shareholders in 2011 to occur again. On the contrary, their relative share of profi t after taxes is likely to increase in 2012. With the exception of this return to normal levels, however, a larger share of profi ts can be expected to go to the parent company's shareholders in the medium term due to modernisation and expansion programmes at the facilities owned wholly by HHLA.
In the Container segment of the Port Logistics subgroup, HHLA anticipates growth in the region of 5 % in container throughput with a weaker fi rst half and stronger second half to the year, also due to effects from the comparative basis of the previous year. The adverse environment and high throughput recorded in 2011 will make for noticeably slower year-on-year growth. As the situation
remains challenging for shipping companies and handling capacity is also expected to increase, it is likely to be diffi cult to pass on higher costs. HHLA believes that revenue growth will therefore lag slightly behind the increase in volumes. Rising costs associated with higher volumes and general price increases will place additional pressure on margins. Although enhanced productivity and improved capacity utilisation at the facilities can counteract this, a comparably low level of growth will mean they are unable to compensate fully. Depreciation and amortisation will also increase further due to capital expenditure. Taking into consideration the one-off compensation received in 2011 and the developments described above, the EBIT margin in the Container segment is expected to come in below the previous year's level.
The rise in transport volume in the Intermodal segment is likely to follow the higher volumes in the Container segment in the region of 5 %. Once again, the higher comparative basis will result in slower growth. However, it should prove possible to increase prices on a number of routes thanks to the favourable competitive situation. Revenue is therefore expected to grow faster than volumes in the Intermodal segment. HHLA is continuing to focus on restructuring single rail operators to improve the earnings position of these companies sustainably. In a low-margin environment, this gives rise to risks because of the strong increase in service buying. In addition to this, competition with other modes of transport is intense, especially for Polish traffi c. Capacity utilisation rates for HHLA's own systems will prove highly signifi cant as a consequence. Taking into account the impairment recognised in the year under review, HHLA anticipates an improved EBIT margin in 2012.
In the Logistics segment, the various submarkets are expected to develop differently again. As the intra-Group settlement of a large-scale IT project led to non-recurring income in 2011, the segment's total revenue is unlikely to match the previous year's level. RoRo operations, bulk cargo handling and consultancy should all continue to make a stable contribution to earnings. In the fi eld of fruit logistics, a structural shift is currently taking place. In addition to ongoing cost management, facility optimisation is extremely
import ant. However, the impairment recorded in the reporting year will ease the strain on future earnings developments. In contract logistics, moves to consolidate activities at the Übersee-Zentrum storage and distribution centre will initially impair the company's earnings position. Nevertheless, the Logistics segment is expected to again make a positive earnings contribution in 2012.
Earnings of the Real Estate subgroup are expected to develop stably once again. Both revenue and the EBIT margin should remain nearly on a par with the previous year. Business developments here will continue to focus on valueoriented portfolio development.
As mentioned above, forecasts are highly uncertain at present. Consequently, actual industry and business developments may follow a considerably worse or somewhat better economic trend than that described here. HHLA will therefore continue to add more specifi c details to its outlook above and beyond the statements made in this report as soon as the economic environment allows for a more reliable assessment.
HHLA will continue to make important investments in 2012 to secure its long-term prospects. It will make investments, postponed from last year, of approx. € 70 million in the ongoing modernisation of its container terminals, including a delayed major project to expand handling operations in Odessa on the Black Sea. In addition to this, capital expenditure will focus on the acquisition of additional railcars and the construction of more inland terminals. Overall, the HHLA Group plans combined capital expenditure of between € 250 million and € 280 million.
Continued investments will lead to a further 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 change in equity will mainly be determined by the net profi t for the year, the gradual reduction of an equalisation liability payable to a minority shareholder See also Financial Position, page 88. Financial liabilities for the fi nancing of investment projects are also expected to increase.
Other than this, the main funds earmarked for fi nancing the further development of business are the available liquidity reserves, the positive cash fl ows from ongoing business activities and, to a lesser extent, the raising of loans. Additional fi nancing possibilities arise from HHLA's good credit standing. HHLA is therefore confi dent that suffi cient fi nancial funds will remain available for a value-creating corporate development in the future as well.
At the end of 2011, HHLA decided to launch an additional employee stock purchase plan to honour the commitment of staff and enable them to share in the company's long-term performance. The shares to be issued in the course of the second quarter of 2012 will be created by making partial use of the company's Authorised Capital. Even if the purchase plan proves popular, the increase in listed Class A shares is likely to be considerably less than 1 %.
HHLA's objective remains unchanged: to continue pursuing its yield-oriented dividend distribution policy. As far as fi nancing needs allow and as long as there are no fundamental changes in the situation, the intention is to continue distributing at least 50 % of the net income for the year as dividends.
There are no plans to make any fundamental changes to the Group's strategic alignment and objectives. See also Corporate Strategy, page 63. As regards the primary goods fl ows in international sea freight shipping – and therefore the relevant sales markets for HHLA's range of services – market research institutes such as Drewry do not anticipate any signifi cant shifts. However, new alliances and partnerships in the shipping industry may result in changes to the structure of liner services, which cannot yet be predicted with suffi cient certainty. With its broad customer base and attractive main site, HHLA believes that it is well equipped for any such changes. 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. HHLA will
continue to further develop its existing service portfolio and work intensively on restructuring individual rail operators in the Intermodal segment. This may have a substantial impact on the ownership structure of the subsidiaries affected and the way in which specifi c markets are covered. As the Executive Board member previously responsible for this segment stepped down at the end of 2011, a decision shall be made on succession arrangements respectively the future division of responsibilities at Executive Board level. Pursuant to the Hamburg Senate's resolution and subsequent national legislation, the free zone boundary in the Port of Hamburg will cease to exist as of 1 January 2013. This will eliminate the need for time-consuming checks of empty vehicles and transit traffi c as well as special surveillance procedures in the port area. As customs clearance will then be integrated into the container terminals' processes, HHLA will continue to make preparations and investments in connection with the new customs requirements in 2012.
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 organisation of business are currently planned.
It is of crucial importance for HHLA's prospects in 2013 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 further expand its market position and benefi t disproportionately from increases in European cargo volumes. If a fast, effective solution to the sovereign debt crisis is found and container shipping is placed on a solid fi nancial footing again, it should be possible to generate revenue of well over € 1.3 billion in 2013 based on current reporting standards (IFRS). Although pressure on yields is expected to persist in the foreseeable future, HHLA will strive to generate further earnings improvements even in this environment. As various expansion projects have now been completed, total capital expenditure for operations in 2013 is likely to fall short of the previous year's fi gure.
| 2013 | 2012 | |
|---|---|---|
| Global economy | 4 % | 3 % |
| Germany | 2 % | 0 % |
| Asia | 8 % | 7 % |
| Central and Eastern Europe | 2 % | 1 % |
| World trade | 5 % | 4 % |
Source: IMF (rounded off to full percentage numbers)
Against the backdrop of its broad strategic alignment, 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 stabilise as predicted by the IMF, HHLA will strive to further increase its revenue and earnings in subsequent years. It therefore intends to continue its investment programme in line with the development of demand. In order to maintain stable balance sheet relationships, HHLA intends to maintain its conservative fi nancing policy.
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, 6 March 2012
Hamburger Hafen und Logistik Aktiengesellschaft The Executive Board
Klaus-Dieter Peters Dr. Stefan Behn
Heinz Brandt Dr. Roland Lappin
Some of the disclosures in the Group Management Report – including statements on revenue and earnings developments and on possible changes in the sector or the fi nancial position – contain forwardlooking statements. These statements are based on the current best estimates and assumptions by the company. Depending on whether uncertain events materialise, HHLA's actual results, including its earnings and fi nancial position, may differ materially from those explicitly or implicitly assumed or described in these statements.
| in € thousand | Note | 2011 | 2010 |
|---|---|---|---|
| Revenue1 | 8. | 1,217,272 | 1,067,816 |
| Changes in inventories | 9. | 602 | - 1,149 |
| Own work capitalised | 10. | 7,175 | 7,359 |
| Other operating income1 | 11. | 43,728 | 43,058 |
| Cost of materials | 12. | - 432,934 | - 372,367 |
| Personnel expenses | 13. | - 359,527 | - 316,783 |
| Other operating expenses | 14. | - 142,874 | - 121,046 |
| Earnings before interest, taxes, depreciation and amortisation (EBITDA) | 333,442 | 306,888 | |
| Depreciation and amortisation | 15. | - 126,427 | - 113,980 |
| Earnings before interest and taxes (EBIT) | 207,015 | 192,908 | |
| Earnings from associates accounted for using the equity method | 16. | 335 | 208 |
| Interest income | 16. | 9,598 | 5,015 |
| Interest expenses | 16. | - 42,324 | - 39,949 |
| Other fi nancial result | 16. | 217 | 336 |
| Financial result | 16. | - 32,174 | - 34,390 |
| Earnings before tax (EBT) | 174,841 | 158,518 | |
| Income tax | 18. | - 56,053 | - 44,588 |
| Profi t after tax | 118,788 | 113,930 | |
| of which attributable to non-controlling interests | 19. | 29,506 | 37,703 |
| of which attributable to shareholders of the parent company | 89,282 | 76,227 |
For the purposes of comparison the previous year's fi gures have been restated due to the reclassifi cation of the incidental rental expenses.
| in € thousand | Note | 2011 | 2010 |
|---|---|---|---|
| Profi t after tax | 118,788 | 113,930 | |
| Actuarial gains/losses | 35. | 18,128 | - 6,493 |
| Cash fl ow hedges | 46. | - 418 | - 220 |
| Foreign currency translation differences | 1,435 | 3,838 | |
| Deferred taxes on changes recognised directly in equity | 18. | - 5,745 | 2,140 |
| Other | - 101 | 18 | |
| Income and expense recognised directly in equity | 13,299 | - 717 | |
| Total comprehensive income | 132,087 | 113,213 | |
| of which attributable to non-controlling interests | 29,448 | 37,898 | |
| of which attributable to shareholders of the parent company | 102,639 | 75,315 |
Consolidated Financial Statements Income Statement HHLA Subgroups Statement of Comprehensive Income HHLA Subgroups 116
| in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes |
2011 Group |
2011 Port Logistics |
2011 Real Estate |
2011 Consolidation |
|---|---|---|---|---|
| Revenue | 1,217,272 | 1,190,639 | 31,677 | - 5,044 |
| Changes in inventories | 602 | 600 | 2 | 0 |
| Own work capitalised | 7,175 | 7,097 | 0 | 78 |
| Other operating income | 43,728 | 38,724 | 5,920 | - 916 |
| Cost of materials | - 432,934 | - 426,336 | - 6,704 | 106 |
| Personnel expenses | - 359,527 | - 357,381 | - 2,146 | 0 |
| Other operating expenses | - 142,874 | - 136,085 | - 12,565 | 5,776 |
| Earnings before interest, taxes, depreciation and amortisation (EBITDA) | 333,442 | 317,258 | 16,184 | 0 |
| Depreciation and amortisation | - 126,427 | - 122,472 | - 4,262 | 307 |
| Earnings before interest and taxes (EBIT) | 207,015 | 194,786 | 11,922 | 307 |
| Earnings from associates accounted for using the equity method | 335 | 335 | 0 | 0 |
| Interest income | 9,598 | 9,390 | 331 | - 123 |
| Interest expenses | - 42,324 | - 37,597 | - 4,850 | 123 |
| Other fi nancial result | 217 | 217 | 0 | 0 |
| Financial result | - 32,174 | - 27,655 | - 4,519 | 0 |
| Earnings before tax (EBT) | 174,841 | 167,131 | 7,403 | 307 |
| Income tax | - 56,053 | - 53,608 | - 2,370 | - 75 |
| Profi t after tax | 118,788 | 113,523 | 5,033 | 232 |
| of which attributable to non-controlling interests | 29,506 | 29,506 | 0 | 0 |
| of which attributable to shareholders of the parent company | 89,282 | 84,017 | 5,033 | 232 |
| in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes |
2011 Group |
2011 Port Logistics |
2011 Real Estate |
2011 Consolidation |
|---|---|---|---|---|
| Profi t after tax | 118,788 | 113,523 | 5,033 | 232 |
| Actuarial gains/losses | 18,128 | 17,900 | 228 | |
| Cash fl ow hedges | - 418 | - 418 | 0 | |
| Foreign currency translation differences | 1,435 | 1,435 | 0 | |
| Deferred taxes on changes recognised directly in equity | - 5,745 | - 5,672 | - 73 | |
| Other | - 101 | - 101 | 0 | |
| Income and expense recognised directly in equity | 13,299 | 13,144 | 155 | 0 |
| Total comprehensive income | 132,087 | 126,667 | 5,188 | 232 |
| of which attributable to non-controlling interests | 29,448 | 29,448 | ||
| of which attributable to shareholders of the parent company | 102,639 | 97,219 | 5,420 |
in € thousand; subgroup Port Logistics and subgroup Real Estate;
| in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes |
2010 Group |
2010 Port Logistics |
2010 Real Estate |
2010 Consolidation |
|---|---|---|---|---|
| Revenue1 | 1,067,816 | 1,042,838 | 29,755 | - 4,777 |
| Changes in inventories | - 1,149 | - 1,124 | - 25 | 0 |
| Own work capitalised | 7,359 | 7,350 | 0 | 9 |
| Other operating income1 | 43,058 | 38,913 | 5,089 | - 944 |
| 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 amortisation (EBITDA) | 306,888 | 290,081 | 16,807 | 0 |
| Depreciation and amortisation | - 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 non-controlling interests | 37,703 | 37,703 | 0 | 0 |
| of which attributable to shareholders of the parent company | 76,227 | 69,890 | 4,822 | 1,515 |
For the purposes of comparison the previous year's fi gures have been restated due to the reclassifi cation of the incidental rental expenses.
| 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 | |
| Foreign currency translation differences | 3,838 | 3,838 | 0 | |
| Deferred taxes on changes recognised directly in equity | 2,140 | 2,096 | 44 | |
| Other | 18 | 18 | 0 | |
| Income and expense recognised directly in equity | - 717 | - 626 | - 91 | 0 |
| Total comprehensive income | 113,213 | 106,967 | 4,731 | 1,515 |
| of which attributable to non-controlling interests | 37,898 | 37,898 | 0 | |
| of which attributable to shareholders of the parent company | 75,315 | 69,069 | 6,246 |
| in € thousand | |||
|---|---|---|---|
| Assets | Note | 31.12.2011 | 31.12.2010 |
| Non-current assets | |||
| Intangible assets | 22. | 81,490 | 83,850 |
| Property, plant and equipment | 23. | 985,340 | 978,583 |
| Investment property | 24. | 180,062 | 185,568 |
| Associates accounted for using the equity method | 25. | 1,830 | 1,620 |
| Financial assets | 26. | 9,086 | 8,284 |
| Deferred taxes | 18. | 22,243 | 32,766 |
| 1,280,051 | 1,290,671 | ||
| Current assets | |||
| Inventories | 27. | 23,162 | 20,965 |
| Trade receivables | 28. | 151,771 | 126,516 |
| Receivables from related parties | 29. | 3,756 | 2,704 |
| Other fi nancial receivables | 30. | 2,429 | 2,607 |
| Other assets | 31. | 16,776 | 15,209 |
| Income tax receivables | 32. | 3,591 | 20,972 |
| 33. | 329,996 | 235,493 | |
| Cash, cash equivalents and short-term deposits | |||
| 531,481 | 424,466 | ||
| 1,811,532 | 1,715,137 | ||
| 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 | 385,124 | 337,337 | |
| Subgroup Port Logistics | 367,967 | 322,200 | |
| Subgroup Real Estate | 17,157 | 15,137 | |
| Other comprehensive income | 42,872 | 29,514 | |
| Subgroup Port Logistics | 41,615 | 28,412 | |
| Subgroup Real Estate | 1,257 | 1,102 | |
| Non-controlling interests | 4,258 | - 12,257 | |
| Subgroup Port Logistics | 4,258 | - 12,257 | |
| Subgroup Real Estate | 0 | 0 | |
| 34. | 644,662 | 567,002 | |
| Non-current liabilities | |||
| Pension provisions | 35. | 313,729 | 331,134 |
| Other non-current provisions | 36. | 53,526 | 52,565 |
| Non-current liabilities to related parties | 39. | 93,587 | 65,747 |
| Non-current fi nancial liabilities | 37. | 403,184 | 387,612 |
| Deferred taxes | 18. | 13,557 | 12,897 |
| 877,583 | 849,955 | ||
| Current liabilities | |||
| Other current provisions | 36. | 28,759 | 21,896 |
| Trade liabilities | 38. | 72,003 | 77,026 |
| Current liabilities to related parties | 39. | 72,119 | 67,986 |
| Current fi nancial liabilities | 37. | 88,332 | 91,136 |
| Other liabilities | 40. | 25,563 | 34,577 |
| Income tax liabilities | 41. | 2,511 | 5,559 |
| 289,287 | 298,180 | ||
| 1,811,532 | 1,715,137 | ||
HHLA ANNUAL REPORT 2011
in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes
| Assets | 31.12.2011 Group |
31.12.2011 Port Logistics |
31.12.2011 Real Estate |
31.12.2011 Consolidation |
|---|---|---|---|---|
| Non-current assets | ||||
| Intangible assets | 81,490 | 81,481 | 9 | 0 |
| Property, plant and equipment | 985,340 | 963,148 | 5,285 | 16,907 |
| Investment property | 180,062 | 60,890 | 149,848 | - 30,676 |
| Associates accounted for using the equity method | 1,830 | 1,830 | 0 | 0 |
| Financial assets | 9,086 | 7,517 | 1,569 | 0 |
| Deferred taxes | 22,243 | 30,362 | 0 | - 8,119 |
| 1,280,051 | 1,145,228 | 156,711 | - 21,888 | |
| Current assets | ||||
| Inventories | 23,162 | 23,091 | 71 | 0 |
| Trade receivables | 151,771 | 151,023 | 748 | 0 |
| Receivables from related parties | 3,756 | 16,713 | 1,108 | - 14,065 |
| Other fi nancial receivables | 2,429 | 2,404 | 25 | 0 |
| Other assets | 16,776 | 16,626 | 150 | 0 |
| Income tax receivables | 3,591 | 3,465 | 283 | - 157 |
| Cash, cash equivalents and short-term deposits | 329,996 | 329,868 | 128 | 0 |
| 531,481 | 543,190 | 2,513 | - 14,222 | |
| 1,811,532 | 1,688,418 | 159,224 | - 36,110 | |
| Equity and liabilities | ||||
| Equity | ||||
| Subscribed capital | 72,680 | 69,975 | 2,705 | 0 |
| Capital reserve | 139,728 | 139,222 | 506 | 0 |
| Retained earnings | 385,124 | 367,967 | 27,515 | - 10,358 |
| Other comprehensive income | 42,872 | 41,615 | 1,257 | 0 |
| Non-controlling interests | 4,258 | 4,258 | 0 | 0 |
| 644,662 | 623,037 | 31,983 | - 10,358 |
| Non-current liabilities | ||||
|---|---|---|---|---|
| Pension provisions | 313,729 | 308,243 | 5,486 | 0 |
| Other non-current provisions | 53,526 | 52,108 | 1,418 | 0 |
| Non-current liabilities to related parties | 93,587 | 93,587 | 0 | 0 |
| Non-current fi nancial liabilities | 403,184 | 380,690 | 22,494 | 0 |
| Deferred taxes | 13,557 | 16,814 | 8,273 | - 11,530 |
| 877,583 | 851,442 | 37,671 | - 11,530 | |
| Current liabilities | ||||
| Other current provisions | 28,759 | 25,719 | 3,040 | 0 |
| Trade liabilities | 72,003 | 69,755 | 2,248 | 0 |
| Current liabilities to related parties | 72,119 | 6,714 | 79,470 | - 14,065 |
| Current fi nancial liabilities | 88,332 | 83,828 | 4,504 | 0 |
| Other liabilities | 25,563 | 25,255 | 308 | 0 |
| Income tax liabilities | 2,511 | 2,668 | 0 | - 157 |
| 289,287 | 213,939 | 89,570 | - 14,222 | |
| 1,811,532 | 1,688,418 | 159,224 | - 36,110 |
in € thousand; 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, cash equivalents and short-term deposits | 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 |
| Non-controlling interests | - 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 | Note | 2011 | 2010 |
|---|---|---|---|
| 1. Cash fl ow from operating activities | |||
| Earnings before interest and taxes (EBIT) | 207,015 | 192,908 | |
| Depreciation, amortisation, impairment and reversals on non-fi nancial non-current assets |
15. | 126,427 | 110,961 |
| Decrease in provisions | - 12,368 | - 28,538 | |
| Gains/losses arising from the disposal of non-current assets | - 1,349 | - 82 | |
| Increase in inventories, trade receivables and other assets not attributable to investing or fi nancing activities |
- 31,378 | - 7,572 | |
| Change in trade payables and other liabilities not attributable to investing or fi nancing activities |
25,695 | - 4,718 | |
| Interest received | 8,284 | 5,147 | |
| Interest paid | - 20,637 | - 20,904 | |
| Income tax paid | - 36,378 | - 40,950 | |
| Exchange rate and other effects | 758 | 697 | |
| Cash fl ow from operating activities | 266,069 | 206,949 | |
| 2. Cash fl ow from investing activities | |||
| Proceeds from disposal of intangible assets and property, plant and equipment | 5,188 | 2,855 | |
| Proceeds from disposal of non-current assets held for sale | 0 | 7,200 | |
| Payments for investments in property, plant and equipment | |||
| and investment property | - 124,748 | - 56,823 | |
| Payments for investments in intangible assets | 22. | - 7,403 | - 7,625 |
| Proceeds from disposal of non-current fi nancial assets | 8 | 1,995 | |
| Payments for investments in non-current fi nancial assets | - 1,016 | - 1,890 | |
| Payments for acquiring interests in consolidated companies and other business units |
0 | - 1,973 | |
| Proceeds from and payments for short-term deposits | - 10,000 | 20,000 | |
| Cash fl ow from investing activities | - 137,971 | - 36,261 | |
| 3. Cash fl ow from fi nancing activities | |||
| Dividends paid to shareholders of the parent company | 21. | - 41,732 | - 30,695 |
| Dividends/settlement obligation paid to non-controlling interests | - 36,423 | - 30,569 | |
| Redemption of lease liabilities | 44. | - 6,273 | - 2,590 |
| Proceeds from the issuance of (fi nancial) loans | 65,733 | 0 | |
| Payments for the redemption of (fi nancial) loans | - 27,175 | - 31,314 | |
| Cash fl ow from fi nancing activities | - 45,870 | - 95,168 | |
| 4. Financial funds at the end of the period | |||
| Change in fi nancial funds (subtotals 1.-3.) | 82,228 | 75,520 | |
| Change in fi nancial funds due to exchange rates | - 1,107 | - 994 | |
| Financial funds at the beginning of the period | 213,682 | 139,156 | |
| Financial funds at the end of the period | 42. | 294,803 | 213,682 |
| in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes |
2011 Group |
2011 Port Logistics |
2011 Real Estate |
2011 Consolidation |
|---|---|---|---|---|
| 1. Cash fl ow from operating activities | ||||
| Earnings before interest and taxes (EBIT) | 207,015 | 194,786 | 11,922 | 307 |
| Depreciation, amortisation, impairment and reversals on non-fi nancial non-current assets |
126,427 | 122,472 | 4,262 | - 307 |
| Change in provisions | - 12,368 | - 13,165 | 797 | |
| Gains/losses arising from the disposal of non-current assets | - 1,349 | - 2,139 | 790 | |
| Change in inventories, trade receivables and other assets not attributable to investing or fi nancing activities |
- 31,378 | - 30,266 | - 1,491 | 379 |
| Change in trade payables and other liabilities not attributable to investing or fi nancing activities |
25,695 | 26,845 | - 771 | - 379 |
| Interest received | 8,284 | 8,076 | 331 | - 123 |
| Interest paid | - 20,637 | - 16,177 | - 4,583 | 123 |
| Income tax paid | - 36,378 | - 30,798 | - 5,580 | |
| Exchange rate and other effects | 758 | 758 | 0 | |
| Cash fl ow from operating activities | 266,069 | 260,392 | 5,677 | 0 |
| 2. Cash fl ow from investing activities | ||||
| Proceeds from disposal of intangible assets and property, plant and equipment |
5,188 | 5,181 | 7 | |
| Payments for investments in property, plant and equipment and investment property |
- 124,748 | - 120,307 | - 4,441 | |
| Payments for investments in intangible assets | - 7,403 | - 7,402 | - 1 | |
| Proceeds from disposal of non-current fi nancial assets | 8 | 8 | 0 | |
| Payments for investments in non-current fi nancial assets | - 1,016 | - 1,016 | 0 | |
| Payments for short-term deposits | - 10,000 | -10,000 | 0 | |
| Cash fl ow from investing activities | - 137,971 | - 133,536 | - 4,435 | 0 |
| 3. Cash fl ow from fi nancing activities | ||||
| Dividends paid to shareholders of the parent company | - 41,732 | - 38,487 | - 3,245 | |
| Dividends/settlement obligation paid to non-controlling interests | - 36,423 | - 36,423 | 0 | |
| Redemption of lease liabilities | - 6,273 | - 6,273 | 0 | |
| Proceeds from the issuance of (fi nancial) loans | 65,733 | 65,733 | 0 | |
| Payments for the redemption of (fi nancial) loans | - 27,175 | - 24,733 | - 2,442 | |
| Cash fl ow from fi nancing activities | - 45,870 | - 40,183 | - 5,687 | 0 |
| 4. Financial funds at the end of the period | ||||
| Change in fi nancial funds (subtotals 1.-3.) | 82,228 | 86,673 | - 4,445 | 0 |
| Change in fi nancial funds due to exchange rates | - 1,107 | - 1,107 | 0 | |
| Financial funds at the beginning of the period | 213,682 | 218,009 | - 4,327 | |
| Financial funds at the end of the period | 294,803 | 303,575 | - 8,772 | 0 |
| 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, amortisation, 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 | |
| Proceeds from short-term deposits | 20,000 | 20,000 | 0 | |
| Cash fl ow from investing activities | - 36,261 | - 29,307 | - 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 non-controlling interests | - 30,569 | - 30,569 | 0 | |
| Redemption of lease liabilities | - 2,590 | - 2,590 | 0 | |
| Payments for the redemption of (fi nancial) 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.) | 75,520 | 75,465 | 55 | 0 |
| Change in fi nancial funds due to exchange rates | - 994 | - 994 | 0 | |
| Financial funds at the beginning of the period | 139,156 | 143,538 | - 4,382 | |
| Financial funds at the end of the period | 213,682 | 218,009 | - 4,327 | 0 |
| annex to the notes | Subgroup Port Logistics | ||
|---|---|---|---|
| 2011 | Container | Intermodal | Logistics |
| Segment revenue | |||
| Segment revenue from non-affi liated third parties | 707,643 | 355,827 | 108,541 |
| Inter-segment revenue | 5,234 | 1,799 | 18,119 |
| Total segment revenue | 712,877 | 357,626 | 126,660 |
| Earnings | |||
| EBITDA | 282,713 | 43,109 | 11,989 |
| EBITDA margin | 39.7 % | 12.1 % | 9.5 % |
| EBIT | 195,515 | 24,600 | - 1,026 |
| EBIT margin | 27.4 % | 6.9 % | - 0.8 % |
| Segment assets | 904,297 | 266,621 | 92,290 |
| Other segment information | |||
| Investments | |||
| Property, plant and equipment and investment property |
81,578 | 31,530 | 3,606 |
| Intangible assets | 6,213 | 709 | 250 |
| Depreciation of property, plant and equipment and investment property |
80,586 | 15,276 | 12,784 |
| of which impairment | 5,758 | ||
| Amortisation of intangible assets | 6,612 | 3,233 | 231 |
| of which impairment | 2,870 | 5 | |
| Non-cash items | 14,799 | 1,304 | 2,662 |
| Container throughput in thousand TEU | 7,087 | ||
| Container transport1 in thousand TEU |
1,887 | ||
| 2010 | |||
| Segment revenue2 | |||
| Segment revenue from non-affi liated third parties | 594,266 | 315,561 | 115,280 |
| Inter-segment revenue | 10,262 | 1,690 | 4,928 |
| Total segment revenue | 604,528 | 317,251 | 120,208 |
| Earnings | |||
| EBITDA | 236,272 | 42,478 | 13,199 |
| EBITDA margin | 39.1 % | 13.4 % | 11.0 % |
| EBIT | 155,726 | 24,760 | 6,174 |
| EBIT margin | 25.8 % | 7.8 % | 5.1 % |
| EBIT from continuing activities3 | 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 | ||
| Amortisation of intangible assets | 3,402 | 3,324 | 228 |
| of which impairment | 3,000 | ||
| Non-cash items4 | 8,406 | 1,375 | 2,892 |
| Container throughput in thousand TEU | 5,844 | ||
| Container transport1 in thousand TEU |
1,696 |
The transport volume was fully consolidated. 2 For the purposes of comparison the revenue fi gures have been presented without income
from incidental rental expenses. 3 EBIT from continuing activities does not contain the result from CTL. In the fi gures for the current fi nancial year an individual disclosure was dispensed with for reasons of materiality. 4
| Subgroup Real Estate | Total | Consolidation and reconciliation with Group |
Group | |
|---|---|---|---|---|
| Holding/Other | Real Estate | |||
| 16,110 | 29,151 | 1,217,272 | 0 | 1,217,272 |
| 109,398 | 2,526 | 137,076 | - 137,076 | 0 |
| 125,508 | 31,677 | 1,354,348 | ||
| - 19,089 | 16,184 | 334,906 | - 1,464 | 333,442 |
| - 15.2 % | 51.1 % | |||
| - 26,486 | 11,922 | 204,525 | 2,490 | 207,015 |
| - 21.1 % | 37.6 % | |||
| 239,682 | 158,813 | 1,661,703 | 149,829 | 1,811,532 |
| 1,435 | 4,441 | 122,590 | - 1,244 | 121,346 |
| 859 | 1 | 8,032 | - 629 | 7,403 |
| 6,814 | 4,251 | 119,711 | - 3,070 | 116,641 |
| 5,758 | - 1,980 | 3,778 | ||
| 583 | 11 | 10,670 | - 884 | 9,786 |
| 2,875 | 0 | 2,875 | ||
| 15,763 | 1,907 | 36,435 | 102 | 36,537 |
| 15.410 | 27,299 | 1,067,816 | 0 | 1,067,816 |
| 132,581 | 2,456 | 151,917 | - 151,917 | 0 |
| 147,991 | 29,755 | 1,219,733 | ||
| - 2,346 | 16,807 | 306,410 | 478 | 306,888 |
| - 1.6 % | 56.5 % | |||
| - 9,071 | 12,690 | 190,279 | 2,629 | 192,908 |
| - 6.1 % | 42.6 % | |||
| - 9,071 | 12,690 | 188,104 | 2,588 | 190,692 |
| 220,158 | 157,940 | 1,635,565 | 79,572 | 1,715,137 |
| 3,323 | 6,952 | 165,898 | 0 | 165,898 |
| 891 | 1 | 7,856 | 85 | 7,941 |
| 6,154 | 4,105 | 108,593 | - 1,016 | 107,577 |
| 2,160 | 0 | 2,160 | ||
| 571 | 12 | 7,537 | - 1,133 | 6,404 |
| 3,000 | 0 | 3,000 | ||
| 15,642 | 1,154 | 29,469 | 206 | 29,675 |
in € thousand
| Parent company | |||||||
|---|---|---|---|---|---|---|---|
| Subscribed capital | Capital reserve | Retained consolidated earnings |
Reserve for foreign currency translation |
||||
| A division | S division | A division | S division | ||||
| Balance as of 31.12.2009 | 69,975 | 2,705 | 139,222 | 506 | 291,805 | - 18,624 | |
| Dividends | - 30,695 | ||||||
| Settlement to non-controlling interests1 | |||||||
| Total comprehensive income | 76,227 | 3,578 | |||||
| Acquisition/disposal of non-controlling interests in consolidated entities |
|||||||
| Other changes | |||||||
| Balance as of 31.12.2010 | 69,975 | 2,705 | 139,222 | 506 | 337,337 | - 15,046 | |
| Balance as of 31.12.2010 | 69,975 | 2,705 | 139,222 | 506 | 337,337 | - 15,046 | |
| Dividends | - 41,732 | ||||||
| Total comprehensive income | 89,282 | 1,499 | |||||
| Acquisition/disposal of non-controlling interests in consolidated entities |
|||||||
| Other changes | 237 | ||||||
| Balance as of 31.12.2011 | 69,975 | 2,705 | 139,222 | 506 | 385,124 | - 13,547 |
For details please refer to note 34 of the notes.
| Total consolidated equity |
Non-controlling interests |
Parent com pany interests |
||||
|---|---|---|---|---|---|---|
| Other comprehensive income | ||||||
| Other | Deferred taxes on changes recognised directly in equity |
Actuarial gains/losses |
Cash fl ow hedges |
|||
| 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 |
| 567,002 | - 12,257 | 579,260 | 11,585 | - 15,698 | 49,700 | - 1,026 |
| - 54,186 | - 12,454 | - 41,732 | ||||
| 132,087 | 29,448 | 102,639 | - 88 | - 5,745 | 17,982 | - 292 |
| - 243 | - 243 | 0 | ||||
| 1 | - 236 | 237 | 1 | |||
| 644,662 | 4,258 | 640,404 | 11,498 | - 21,443 | 67,682 | - 1,318 |
in € thousand; annex to the notes
| Parent company | ||||
|---|---|---|---|---|
| Subscribed capital | Capital reserve | Retained consolidated earnings |
Reserve for foreign currency translation |
|
| Balance as of 31.12.2009 | 69,975 | 139,222 | 280,300 | - 18,624 |
| Dividends | - 27,990 | |||
| Settlement to non-controlling interests1 | ||||
| Total comprehensive income subgroup | 69,890 | 3,578 | ||
| Acquisition/disposal of non-controlling interests in consolidated entities |
||||
| Other changes | ||||
| Balance as of 31.12.2010 | 69,975 | 139,222 | 322,200 | - 15,046 |
| Balance as of 31.12.2010 | 69,975 | 139,222 | 322,200 | - 15,046 |
| Dividends | - 38,487 | |||
| Total comprehensive income subgroup | 84,017 | 1,499 | ||
| Acquisition/disposal of non-controlling interests in consolidated entities |
||||
| Other changes | 237 | |||
| Balance as of 31.12.2011 | 69,975 | 139,222 | 367,967 | - 13,547 |
in € thousand; annex to the notes
| 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 | |
| Balance as of 31.12.2010 | |
| Dividends | |
| Total comprehensive income subgroup | |
| Balance as of 31.12.2011 | |
| Plus income statement consolidation effect | |
| Less balance sheet consolidation effect | |
| Total effects of consolidation | |
| Balance as of 31.12.2011 |
| Total subgroup consolidated equity |
Non-controlling interests |
Parent com pany interests |
|||||
|---|---|---|---|---|---|---|---|
| Other comprehensive income | |||||||
| Other | Deferred taxes on changes recognised directly in equity |
Actuarial gains/losses |
Cash fl ow hedges |
||||
| 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 | |
| 547,552 | - 12,257 | 559,810 | 11,585 | - 15,174 | 48,074 | - 1,026 | |
| - 50,941 | - 12,454 | - 38,487 | |||||
| 126,667 | 29,448 | 97,219 | - 88 | - 5,671 | 17,753 | - 292 | |
| - 243 | - 243 | 0 | |||||
| 1 | - 236 | 237 | 1 | ||||
| 623,037 | 4,258 | 618,779 | 11,498 | - 20,845 | 65,827 | - 1,318 |
| Other comprehensive income | Total subgroup consolidated equity |
||||
|---|---|---|---|---|---|
| Subscribed capital |
Capital reserve | Retained consolidated earnings |
Actuarial gains/losses |
Deferred taxes on changes recognised directly in equity |
|
| 2,705 | 506 | 23,610 | 1,761 | - 568 | 28,013 |
| - 2,705 | - 2,705 | ||||
| 4,822 | - 135 | 44 | 4,731 | ||
| 2,705 | 506 | 25,728 | 1,626 | - 524 | 30,041 |
| 1,515 | 1,515 | ||||
| - 12,105 | - 12,105 | ||||
| - 10,591 | - 10,591 | ||||
| 2,705 | 506 | 15,138 | 1,626 | - 524 | 19,450 |
| 2,705 | 506 | 25,728 | 1,626 | - 524 | 30,041 |
| - 3,245 | - 3,245 | ||||
| 5,033 | 228 | - 73 | 5,188 | ||
| 2,705 | 506 | 27,515 | 1,854 | - 597 | 31,983 |
| 232 | 232 | ||||
| - 10,590 | - 10,590 | ||||
| - 10,358 | - 10,358 | ||||
| 2,705 | 506 | 17,157 | 1,854 | - 597 | 21,625 |
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. The part of the Group which deals with the property in Hamburg's Speicherstadt historical ware house district and Fischmarkt Hamburg-Altona GmbH is allocated to the subgroup Real Estate (S division). All other parts of the company are allocated together to the subgroup Port Logistics (A division). Individual fi nancial statements are prepared for each division to determine the shareholders' dividend entitlements; these, in line with the company's articles of association, form part of the Notes to the fi nancial statements of the parent company.
When the shareholders' dividend entitlements are being determined, the expenses and income of HHLA which cannot be attributed directly to one subgroup are divided between the two subgroups according to their shares of revenue. All transfer pricing for services between the two subgroups takes place on an arm's length basis. Interest must be paid at market rates on liquid funds exchanged between the two subgroups. A notional taxable profi t or loss is calculated for each subgroup to allocate the taxes paid. The resulting notional tax payment represents the amount of tax which would have been paid had each of the subgroups been separately liable for tax.
To illustrate the net assets, fi nancial and earnings position of the subgroups, the annex to these Notes contains the balance sheet, income statement, statement of comprehensive income, statement of changes in equity and cash fl ow statement for each subgroup.
HHLA's Consolidated Financial Statements for the 2011 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 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 annual report 2006.
For the most part, the accounting and valuation policies, notes and disclosures about the Consolidated Financial Statements for the 2011 fi nancial year are based on the same accounting and valuation principles used for the 2010 Consolidated Financial Statements. Exceptions are the effects of new IFRS accounting standards stated in Note 5, which became mandatory for the Group on 1 January 2011, and the reclassifi cations listed under Note 6. 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.
These HHLA Consolidated Financial Statements for the fi nancial year ending 31 December 2011 were approved by the Executive Board on 6 March 2012 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 30 March 2012.
HHLA operates in the following four segments:
The Container segment pools the Group's container handling operations. The Group's activities in this segment consist primarily of handling container ships and transferring containers to other carriers (e.g. rail, truck or feeder ship). HHLA operates three container terminals in Hamburg (Altenwerder, Burchardkai and Tollerort). Handling services are also provided at an additional container terminal in Odessa, Ukraine. The portfolio is rounded off by supplementary container services, such as maintenance and repairs provided by its subsidiary HCCR.
As a core element of HHLA's business model, which is vertically integrated along the transportation chain, the Intermodal segment provides a comprehensive seaport–hinterland rail and truck network. The rail companies METRANS, Transfracht and POLZUG complete HHLA's range of services in this fi eld.
The Logistics segment encompasses a wide range of contract and warehousing logistics as well as specialist handling services. Its service portfolio comprises standalone logistics services, entire process chains for the international procurement and distribution of merchandise, and the processing of cruise ships. The segment also provides consulting and management services for clients in the port and transport sectors.
This segment is equivalent to the Real Estate subgroup. Its business activities encompass the development, letting and management of properties in the Port of Hamburg. These include properties in the Speicherstadt historical warehouse district and the fi sh market area on the northern banks of the river Elbe.
The 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, pro rata or using the equity method are recognised in accordance with the uniform accounting principles applied in the HHLA Group.
Capital is consolidated at the time of acquisition by setting off the acquisition costs of the investment against the pro rata fair values of the assets acquired and the liabilities and contingent liabilities assumed. Previously unreported intangible assets which can be included in the accounts under IFRS 3 (revised) in conjunction with IAS 38, and contingent liabilities are recognised at fair value. In the course of subsequent consolidations, the previously unrecognised hidden reserves and losses realised by this procedure are retained at the same carrying amount, amortised or reversed, depending on the treatment of the equivalent assets and liabilities.
Any positive difference arising in the course of this initial consolidation is capitalised as goodwill and subjected to an annual impairment test. Following a critical assessment, any negative difference from setting off the acquisition costs against the pro rata fair value of assets, liabilities and contingent liabilities at the time of acquisition is posted to profi t and loss. For a detailed explanation of the impairment testing procedure used, please refer to Notes 6 and 7.
Equity interests held by third parties outside the Group are shown in the balance sheet under the item non-controlling interests within equity capital.
The acquisition of additional non-controlling interests and/or mino rity interests in consolidated companies is treated as an equity transaction in line with the entity concept and therefore set off directly against equity.
Gains or losses from the disposal of non-controlling interests and/ or minority interests in consolidated companies are likewise recognised directly in equity without effect on profi t and loss insofar as the transaction does not lead to a loss of control. In the case of a loss of control, the remaining interests are measured at fair value.
The effects of intra-Group transactions are eliminated. Receivables and liabilities between consolidated companies are netted out (consolidation of liabilities). The values of goods and services sold within the Group are adjusted for unrealised inter-company profi ts (elimination of inter-company profi ts); these assets are therefore recognised at their historical cost to the Group. Intra-Group income is set off against the equivalent expenses (consolidation of income and expenses). Deferred taxes are recognised on temporary differences from consolidation in line with IAS 12.
All signifi cant companies which HHLA can control directly or indirectly are included in the Consolidated 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 2011 | 32 | 6 | 38 |
| Disposals | 1 | 0 | 1 |
| Mergers | 4 | 0 | 4 |
| 31 December 2011 | 27 | 6 | 33 |
| Companies consolidated pro rata | |||
| 1 January 2011 | 6 | 1 | 7 |
| 31 December 2011 | 6 | 1 | 7 |
| Companies reported using the equity method |
|||
| 1 January 2011 | 1 | 0 | 1 |
| 31 December 2011 | 1 | 0 | 1 |
| Total | 34 | 7 | 41 |
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 47.
The Group has interests in joint ventures in the form of jointly managed companies. A joint venture is defi ned as a contractual agreement between two or more parties to carry on an economic activity which is subject to joint control. The partnership or consortium agreements governing joint ventures contain provisions which ensure joint control.
HHLA recognises its interests in joint ventures using the proportionate consolidation method. The Group combines its share of the joint ventures' assets, liabilities, income and expenses with the equivalent items in its Consolidated 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 recognises its share of the joint venture's profi t on the transaction only when it sells the assets on to an independent third party.
The joint venture is included in the Group's Consolidated Financial Statements using the proportionate consolidation method until such time as joint control of the entity by the Group ends.
The share of assets, liabilities, income and expenses attributable to the Group from joint ventures is as follows:
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Non-current assets | 17,742 | 17,582 |
| Current assets | 25,094 | 19,051 |
| Total assets | 42,836 | 36,633 |
| Non-current liabilities | 10,261 | 4,627 |
| Current liabilities | 31,727 | 23,922 |
| Total liabilities | 41,988 | 28,549 |
| in € thousand | 2011 | 2010 |
|---|---|---|
| Income | 158,182 | 145,381 |
| Expenses | - 157,536 | - 140,895 |
| Total | 646 | 4,486 |
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 amortisation, any goodwill recognised within the carrying amount of the investment when it is reported in the balance sheet for the fi rst time undergoes an impairment test for the entire
carrying amount of the investment if there are any indications of possible impairment.
As from the acquisition date, HHLA's interest in the associated company's results is recorded in the income statement, while its interest in changes in equity is recorded directly in equity. These cumulative changes affect the carrying amount of the interest in the associated company. As soon as HHLA's share in the company's losses exceeds the carrying amount of the investment, however, HHLA records no further shares in the losses unless HHLA has entered into obligations to that effect or has made payments for the associated company.
Signifi cant results from transactions between HHLA and the associated 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 | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Assets | 4,166 | 3,892 |
| Liabilities | 2,448 | 2,384 |
| Income statement information | ||
| in € thousand | 2011 | 2010 |
| Revenue | 4,241 | 4,091 |
| Earnings from associates for using the equity method |
335 | 208 |
In the reporting year, the fi rm GHL Erste Gesellschaft für Hafenund Lagereiimmobilien-Verwaltung mbH, Hamburg, was merged with GHL Zweite Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung mbH, Hamburg.
Furthermore, the company GHL Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung Block T mbH, Hamburg, was merged with GHL Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung Bei St. Annen mbH, Hamburg, in the 2011 fi nancial year.
CTL Container Terminal Lübeck GmbH, Lübeck, was merged with HHLA Intermodal GmbH, Hamburg, in the fi nancial year just ended. All the assets were transferred and the company was dissolved.
In fi scal 2011, the fi rm HHLA Energiehandelsgesellschaft mbH, Hamburg, was also merged with HHLA Container Terminals Gesellschaft mit beschränkter Haftung, Hamburg.
In addition to this, the equity stake held by METRANS a.s., Prague, Czech Republic, in AREHOR s.r.o., Šenov, Czech Republic, was merged with METRANS a.s. As AREHOR is of minor importance for HHLA's Consolidated Financial Statements, this investment was previously included under non-current fi nancial assets. Due to the merger, non-current fi nancial assets fell accordingly as of the balance sheet date.
30 June 2011 marked the end of the lease for port areas between HPA – a related party – and UNIKAI Hafenbetrieb GmbH, Hamburg (UNIKAI). The sublease between UNIKAI and LZU Leercontainer Zentrum Unikai GmbH, Hamburg (LZU), for the relevant port areas ended on the same day. As a result of this, active business operations at LZU were discontinued effective 30 June 2011.
There were no other changes in the group of consolidated companies in the year under review. The above-mentioned changes did not have a material effect on the Group's assets and liabilities.
Monetary assets and liabilities in separate fi nancial statements for the consolidated companies which are prepared in a foreign currency are converted to local currency at the rate applicable on the balance sheet date. The resulting currency differences are recognised in the result for the period. Exceptions are currency differences from loans in foreign currencies used to secure a net investment in a foreign business. These are recognised directly in equity until the net investment is sold and only affect the result for the period on disposal of the net investment.
Non-monetary items held at historical cost in a foreign currency are translated at the applicable rate on the transaction date. Non- monetary items held at historical cost in a foreign currency are translated at the rate applicable on the date fair value was measured.
Exchange rate gains and losses recognised in the income statement on foreign currency items resulted in a loss of € 1,288 thousand in the fi nancial year (previous year: € 897 thousand).
The concept of functional currency according to IAS 21 is applied when translating all annual fi nancial statements of foreign affi liates prepared in a foreign currency. As the subsidiaries in question are generally independent in terms of their fi nancial, economic and organisational activities, the functional currency is the respective national currency. As of the balance sheet date, the assets and liabilities of these subsidiaries are converted to euros at the rate prevailing on the reporting date. Income and expenses are translated at the weighted average rate for the fi nancial year. Equity components are converted at their respective historical rates. Any translation differences are recognised as a separate component of equity without effect on profi t and loss. If Group companies leave the group of consolidated companies, the associated translation difference is reversed through profi t and loss.
HHLA did not apply the regulations of IAS 29 because no transactions were conducted in 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 |
31.12.2011 31.12.2010 | 2011 | 2010 | |
| Czech crown | CZK | 25.787 | 25.061 | 24.637 | 25.342 |
| Polish zloty | PLN | 4.458 | 3.975 | 4.124 | 4.012 |
| Ukrainian hryvnia | UAH | 10.298 | 10.573 | 11.088 | 10.550 |
The following revised and new IASB/IFRIC standards and interpretations were mandatory for the fi rst time in the fi nancial year under review:
| IAS 24 (revised) | Related Party Disclosures |
|---|---|
| Amendments to IAS 32 | Financial Instruments: Presentation |
| Amendments to IFRIC 14 | Prepayments of a Minimum Funding Requirement |
| IFRIC 19 | Extinguishing Financial Liabilities with Equity Instruments |
| Various | Improvements to IFRS (May 2011) |
Application of the following amendments to a standard is voluntary for the fi nancial year:
| Amendments to IFRS 7 | Financial Instruments: Disclosures | |
|---|---|---|
| ---------------------- | ------------------------------------ | -- |
The following IASB standards and interpretations have not yet been adopted by the EU and have not been applied:
| IAS 1 | Presentation of Financial Statements |
|---|---|
| Amendments to IAS 12 | Disclosure of Interests in Other Entities |
| Amendments to IAS 19 | Post-Employment Benefi ts |
| IAS 27 (revised 2011) | Separate Financial Statements |
| IAS 28 (revised 2011) | Investments in Associates and Joint Ventures |
| Amendments to IAS 32 Amendments to IFRS 7 |
Financial Instruments: Presentation Financial Instruments: Disclosures |
| IFRS 9 | Financial Instruments |
| IFRS 10 | Consolidated Financial Statements |
| IFRS 11 | Joint Arrangements |
| IFRS 12 | Disclosure of Interests in Other Entities |
| IFRS 13 | Fair Value Measurement |
The amendments had the following specifi c effects:
The amendments published in November 2009 affect clarifi cations for companies controlled by governments (government-related entities). The previous obligations to make extensive disclosures regarding transactions with companies controlled by the same government or by public authorities have been simplifi ed. Now, only transactions that are signifi cant for the fi nancial recipients must be disclosed. The following details must be published:
The amendment to IAS 24 also clarifi es the defi nition of a related party. This amendment did not lead to any changes in the Notes to the Consolidated Financial Statements of HHLA.
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 had no material consequences for the HHLA Group.
The amendments concern occasions where companies make voluntary prepaid contributions in order to comply with minimum funding requirements. The amendments allow affected companies to recognise the benefi ts resulting from these payments as assets. The amendments to IFRIC 14 had no impact on HHLA's Consolidated Financial Statements.
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.
This combined standard contains amendments and clarifi cations which apply to various existing IFRS. These include in particular IFRS 1 First-time Adoption of IFRS, IFRS 3 Business Combinations, IFRS 7 Financial Instruments: Disclosures, IAS 1 Presentation of Financial Statements, IAS 27 Consolidated and Separate Financial Statements, IAS 34 Interim Financial Reporting and IFRIC 13 Customer Loyalty Programmes. The amendment of various IFRS had no material impact on HHLA's Consolidated Financial Statements.
IFRS 7 Financial Instruments: Disclosures was published in October 2010. It contains amendments to the way in which transfers of fi nancial assets are disclosed. These alterations offer those who read fi nancial reports greater insight into transactions for the purpose of transferring assets (such as securitisation). The 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.
The alterations published in June 2011 propose that the IFRS income statement should formally consist solely of a statement of profi t or loss and other comprehensive income. However, the income statement must be split into two sections: profi t or loss and other comprehensive income (OCI). In addition to this, it will be mandatory to disclose whether the income and expenditure listed under OCI is subsequently reclassifi able to profi t and loss. Companies will still have the option of listing items within OCI before or after tax. If fi gures are shown before tax, a distinction must be made between reclassifi able and non-reclassifi able items. The amendments are mandatory for fi nancial years which begin on or after 1 July 2012. Early adoption is permitted. Applying the amendment will not have a material impact on HHLA's Consolidated Financial Statements in the future.
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.
In June 2011, the IASB published amendments to IAS 19. These require unexpected fl uctuations in pension obligations and any plan assets – known as actuarial gains and losses – to be recorded directly in other comprehensive income (OCI) in the future. The alternative method previously permitted, i.e. deferral using the corridor approach, is to be eliminated. In future, companies will also only be allowed to recognise income resulting from the interest they expect to receive on plan assets up to the discount rate following the changes. Other amendments affect the presentation and allocation of changes in net liabilities/assets arising from defi ned benefi t plans and additional disclosure requirements concerning the characteristics and risks of such defi ned benefi t plans. The new IAS 19 is mandatory for fi nancial years which begin on or after 1 January 2013. Early adoption is permitted. The Notes to HHLA's Consolidated Financial Statements will include additional information as a result of this amendment.
IAS 27 (amended 2011) Separate Financial Statements IAS 27 (amended in 2008) was revised in the course of publishing the IFRS 10, 11 and 12 standards. IFRS 10 replaces the portion of the previous IAS 27 (amended in 2008) which deals with consolidation. IAS 27 (amended in 2011) now deals solely with separate fi nancial statements. The amended standard applies to accounting for investments in subsidiaries, joint ventures or associates in separate fi nancial statements produced voluntarily or required under IFRS. Shares are either valued at acquisition cost or in conjunction with IFRS 9. The amended IAS 27 is mandatory for fi nancial years which begin on or after 1 January 2013. This amendment has no effect on HHLA's Consolidated Financial Statements.
When IFRS 11 Joint Arrangements was altered in May 2011, IAS 28 was amended at the same time. IAS 28 (amended in 2011) explicitly includes joint ventures in its requirement to use the equity method exclusively in the future. The regulations on material infl uence remained unchanged. Now, if an associate becomes a joint venture or vice versa, it is still reported using the equity method and no revaluation is conducted. IAS 28 is mandatory for fi nancial years which begin on or after 1 January 2013. This will have a signifi cant impact on the companies previously included pro rata in the HHLA Consolidated Financial Statements.
The IASB ratifi ed the amendments in December 2011. The IASB clarifi es the offsetting regulations for fi nancial instruments with these changes. Overall, these adjustments are designed to eliminate inconsistencies. In addition, supplementary information is to be provided in the notes about the use of offsetting and existing offsetting rights. The clarifi cations are mandatory for fi nancial years which begin on or after 1 January 2014 with retroactive effect. However, the additional information must be provided retroactively for fi nancial periods as of 1 January 2013. The Notes to HHLA's Consolidated Financial Statements will include additional information as a result of these amendments.
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 classifi cations (those measured at amortised 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 (amortised cost and fair value). In addition to this, the rules from the existing IAS 39 for derecognising fi nancial assets and liabilities were incorporated. The IASB is currently discussing the next phases of the project in depth (phase 2: amortised cost and impairment and phase 3: hedge accounting). The current proposal for phase 2 features a "three bucket" impairment approach, which classifi es loans according to risk of default in line with credit risk management methods. This is designed to provide greater coverage of the anticipated risk of default for high risk credit. Based on progress with phase 3 to date, the way in which hedging relationships are reported on the balance sheet will be geared more strongly towards risk management approaches. At the same time, there are plans to broaden the defi nitions of permissible hedged items and hedges. This standard must be applied for fi nancial years that begin on or after 1 January 2015. IFRS 9 may be adopted early. The amendments to IFRS 9 are not expected to have any material effect on HHLA's future Consolidated Financial Statements.
The IFRS 10 standard Consolidated Financial Statements was published in May 2011. It supersedes the guidelines on control and consolidation in IAS 27 Consolidated and Separate Financial Statements and SIC 12 Consolidation – Special Purpose Entities. Due to the new defi nition of control in IFRS 10, all companies will be subject to the same criteria when identifying control relationships in the future. This new defi nition of control is supported by extensive application guidelines which highlight different ways in which a reporting company (investor) can control another fi rm (shareholdings). The key principle that consolidated fi nancial statements present the parent company and its subsidiaries as a single entity remains unchanged, as do the consolidation procedures. As it stands, IFRS 10 is mandatory for fi nancial years which begin on or after 1 January 2013. This amendment is not expected to have a major impact on HHLA's future Consolidated Financial Statements.
This standard was published by the IASB in May 2011. IFRS 11 replaces the previous regulations on accounting for joint ventures (IAS 31 Interests in Joint Ventures and SIC 13 Jointly Controlled Entities). The new standard provides accounting guidance for companies which exercise joint control over joint ventures or joint operations. The previous option of pro rata consolidation for joint ventures has been eliminated. In the future, partners in a joint venture must use the equity method. As it stands, IFRS 11 is mandatory for fi nancial years which begin on or after 1 January 2013. The changes to the consolidation method will result in signifi cant changes to HHLA's Consolidated Financial Statements.
According to the IFRS 12 standard published in May 2011, companies must disclose details which enable users of fi nancial statements to assess the type of risks and fi nancial consequences entailed in the company's interests in subsidiaries, associates, joint arrangements and non-consolidated structured companies (special-purpose entities). IFRS 12 applies to companies who produce balance sheets as per IFRS 10 and IFRS 11. The standard comprises the disclosure obligations currently contained in IAS 28 Investments in Associates, IAS 27 Consolidated and Separate Financial Statements and IAS 31 Interests in Joint Ventures. As it stands, IFRS 12 is mandatory for fi nancial years which begin on or after 1 January 2013. Applying the standard is expected to lead to more detailed Notes in HHLA's Consolidated Financial Statements.
The IASB published the IFRS 13 standard Fair Value Measurement in May 2011. This standard defi nes a uniform framework for
the measurement of fair value. The new guideline also contains disclosure requirements in connection with measurements at fair value. In the new standard, fair value is defi ned as the exit price and is therefore market based. Values on the market with the greatest market volume or the most market activity for the asset or liability to be measured at the time of valuation must be taken into account. The new standard still allows fair value to be measured using approaches based on the market, cost or present value. These valuation methods require valuation parameters to be considered hierarchically. They rest primarily on quoted prices in active markets (level 1). If no such data exists, they must be calculated based on observable market data (level 2). If this data is also unavailable, the valuation must be made using unobservable data, such as an entity's own details. This data must be adjusted in line with representative market conditions. IFRS 13 is mandatory for fi nancial years which begin on or after 1 January 2013. HHLA does not currently expect IFRS 13 to have a signifi cant impact on its Consolidated Financial Statements. However, more detailed information will probably have to be provided in the Notes as a result of applying these standards.
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 capitalised if the assets are identifi able, a future infl ow of benefi ts can be expected and the acquisition and production costs can be ascertained reliably. Intangible assets acquired in return for payment are recognised at historical cost. Intangible assets with a fi nite useful life are amortised over their useful life on a straight-line basis. The Group examines its intangible assets with a fi nite useful life as of each balance sheet date for signs of impairment.
Intangible assets with an indefi nite useful life are subjected to an impairment test at least once a year, and if necessary, adjusted to future expectations. In the reporting period there were no intangibleassets with an indefi nite useful life apart from derivative goodwill.
Internally generated intangible assets are recognised at the costs incurred in their development phase between the time when technological and economic feasibility is determined and production. Costs include all directly attributable costs incurred during the development phase.
The capitalised amount of development costs is subject to an impairment test at least once per year if the asset is not yet in use or if there is evidence of impairment during the course of the year.
The following useful lives have been assumed for intangible assets:
| 2011 | 2010 | |
|---|---|---|
| Software | 3–7 years | 3–7 years |
Property, plant and equipment is reported at the acquisition or production cost less accumulated depreciation, amortisation and impairment. The costs of ongoing maintenance are recognised immediately in profi t and loss. The production costs include specifi c expenses and appropriate portions of attributable production overheads. Demolition obligations are included in the acquisition or production costs at the present value of the obligation as of the time when it arises and an equivalent provision is recognised at the same time. The HHLA Group does not use the revaluation method of accounting.
Depreciation is carried out on a straight-line basis over an asset's useful life. The following table shows the principal useful lives which are assumed:
| 2011 | 2010 | |
|---|---|---|
| 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 at tri bu ted to the acquisition or production of a qualifying asset are capitalised as a component of the acquisition or production cost of the asset in question. Borrowing costs which cannot be directly attributed to a qualifying asset are recognised as an expense at the time they are incurred.
Investment property consists of buildings held for the purpose of generating rental income or for capital gain, and not for supplying goods or services, for administrative purposes or for sale as part of normal business operations.
IAS 40 stipulates that investment property be held at acquisition or production cost less straight-line depreciation and accumulated impairment losses. Subsequent expenses are capitalised if they result in an increase in investment property's value in use. The useful lives applied are the same as those for property used by the Group.
The fair values of these 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 and value in use of the cash-generating unit or asset is calculated using the discounted cash fl ow method. This involves discounting estimated future cash
fl ows to their present value using a discount rate after tax which refl ects current market expectations of the interest curve and the specifi c risks of the asset. As of the balance sheet date, the interest rate for discounting was between 6.4 and 7.7 % p. a. (previous year: 7.4 to 9.1 % p. a.). The cash fl ow forecasts in the Group's current plans for the next fi ve years were extrapolated to determine future cash fl ows. If new information is available when the fi nancial statements are produced, it is taken into account. Growth factors of 0.0 to 1.0 % 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 recognised in prior periods no longer exists or has decreased. If there are such indications, the recoverable amount is estimated. Previously recognised impairment losses are reversed if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognised. If this is the case, the carrying amount of the asset is raised to its recoverable amount. This higher carrying amount may not exceed the amount which would have been determined, less scheduled depreciation or amortisation, if no impairment losses had been recognised in prior years. Any such reversals must be recognised immediately in profi t and loss for the period. Following a reversal, the amount of depreciation or amortisation must be adjusted in subsequent periods in order to write down the adjusted carrying amount of the asset, less any residual value, systematically over its remaining useful life.
Impairment losses on goodwill are not reversed.
Financial assets as defi ned by IAS 39 are classifi ed as fi nancial assets at fair value through profi t and loss, loans and receivables, investments held to maturity or available-for-sale fi nancial assets.
Financial assets are initially recognised at fair value. In the case of fi nancial investments for which no fair value through profi t and loss is determined, directly attributable transaction costs are also included. The Group defi nes the classifi cation of its fi nancial assets on initial recognition and reviews this classifi cation every year insofar as this is permitted and appropriate.
Financial assets are recognised as of their settlement date, i. e. upon delivery and transfer of risk. The only exception is the recognition of derivatives, which are recognised as of the trading day.
Financial assets at fair value through profi t and loss Derivative fi nancial instruments are classifi ed as held for trading unless they are derivatives designated and effective as hedging instruments. Gains or losses from fi nancial assets held for trading are recognised in profi t and loss.
Loans and receivables are non-derivative fi nancial assets with fi xed or determinable payments which are not quoted in an active market. These assets are carried at amortised cost using the effective interest rate method. Gains and losses are recognised in the result for the period when the loans and receivables are derecognised or impaired and within the scope of repayment.
Trade receivables and other assets are recognised at amortised cost less allowances for doubtful receivables. Write-downs are made if there is substantial objective evidence that the Group will not be able to collect the receivables. Receivables are derecognised as soon as they are deemed to be irrecoverable. Examples of objective evidence are manifest shortages of liquid funds or the institution of insolvency proceedings against a customer. When assessing such situations, HHLA draws on its own data about the specifi c customer, external information and fi gures derived from experience.
Cash used as a pledge or collateral is disclosed separately.
Following their initial recognition, available-for-sale fi nancial assets are measured at fair value on each balance sheet date. The gains or losses arising as a result are taken directly to equity, where they are recorded in a separate reserve. The reserve is reversed through profi t and loss on disposal of the fi nancial asset. If impairment losses are recorded based on objective evidence of impairment as per IAS 39.59 rather than valuation-based considerations alone, the impairment must be recognised in the income statement.
The fair values of fi nancial instruments traded on organised markets are determined by reference to the prices quoted on the stock exchange on the balance sheet date. The fair values of fi nancial instruments for which there is no active market are estimated using valuation methods. If the fair values cannot be determined reliably because they are not traded on an active market, they are valued at cost. This applies in particular to non-consolidated interests in affi liated companies and other equity investments.
On each balance sheet date the Group determines whether a fi nancial asset or a group of fi nancial assets is impaired.
If there is an objective indication of impairment to loans and receivables carried at amortised cost, the loss is calculated as the difference between the carrying amount of the asset and the present value of expected future cash fl ows (excepting future credit defaults), discounted by the original effective interest rate of the fi nancial asset (i.e. the interest rate determined on initial recognition). The amount of the loss must be recognised immediately in profi t and loss. If the amount of the write-down decreases in one of the following reporting periods and this decrease can be ascribed objectively to circumstances occurring after the impairment was recognised, then the earlier impairment is reversed. A subsequent write-up is recognised in profi t and loss if the carrying amount of the asset at the time of the write-up does not exceed the amortised cost.
If there is an objective indication of impairment to a non-listed equity instrument that is not recognised at fair value because its fair value cannot be determined reliably, the amount of the writedown is the difference between the carrying amount of the fi nancial asset and the present value of the estimated future cash fl ows, discounted at the current market rate of return for a comparable fi nancial asset.
If an available-for-sale fi nancial asset is impaired, the difference recognised in equity between the acquisition cost (less any repayments and amortisation) and the current fair value, less any impairment allowances for the fi nancial asset, is recognised in profi t and loss. Write-ups on equity instruments classifi ed as avai l able for sale are recognised directly in equity. Write-ups on debt instruments are recognised in profi t and loss if the increase in the instrument's fair value can objectively be ascribed to an event which occurred after the impairment was recognised through profi t and loss.
Inventories include raw materials, consumables and supplies, work in progress, fi nished products and merchandise. They are initially recognised at acquisition or production cost. Measurement at the balance sheet date is made at the lower of cost and net realisable value. Standard sequence of consumption procedures are not used for valuation. Service work in progress is valued using the percentage of completion method if the result of the service transaction can be estimated reliably. Net realisable value corresponds to the estimated sales proceeds in the course of normal operations, less costs until completion and sale.
At initial recognition, fi nancial liabilities are measured at the fair value of the equivalent goods or services received less transaction costs related to borrowing, including discounts and premiums.
After initial recognition, fi nancial liabilities are measured at amortised cost using the effective interest rate method.
This does not apply to derivatives recorded as liabilities, which are carried at fair value.
A provision is formed if the Group has a present (legal or factual) obligation arising from past events, the settlement of which is likely to result in an outfl ow of resources embodying economic benefi ts, and if the amount required to settle the obligation can be estimated reliably. The provision is formed for the amount expected to be necessary to settle the obligation, including future increases in prices and costs. If the Group anticipates a partial reimbursement of an amount made as a provision (e.g. in the case of insurance), the reimbursement is recognised as a separate asset only if it is virtually certain. The expenses arising from making the provision are disclosed in the income statement after the reimbursement has been deducted. If the interest effect is substantial, non-current provisions are discounted before tax at an interest rate which refl ects the specifi c risks associated with the liability. In the event of discounting, the increase in the amount of the provision over time is recognised under interest expenses.
Pensions and similar obligations include the Group's benefi t obligations under defi ned benefi t obligations. Provisions for pension obligations are calculated in accordance with IAS 19 using the projected unit credit method. Actuarial gains and losses are recognised in equity without effect on profi t and loss, after accounting for deferred taxes. The option of using the corridor method has not been exercised. Service expense affecting net income is recognised in personnel expenses and the interest proportion of the addition to provisions is recognised in the fi nancial result.
Actuarial opinions are commissioned annually to determine pension obligation costs.
The compensation to be paid in the release phase of the so-called block model is recognised as provisions for phased early retirement. It is recognised pro rata over the working period over which the entitlements accrue. The supplementary contributions to be paid over the entire phased early retirement period are recognised as provisions for phased early retirement.
Actuarial opinions are commissioned annually to measure compensation obligations in the release phase of the block model and supplementary amounts.
If payment obligations do not become payable until after twelve months' time because of entitlements in the block model or supplementary amounts, they are recognised at their present value.
The question of whether an agreement is, or contains, a lease depends on the commercial content of the agreement and requires an assessment as to whether fulfi lling the agreement depends on the use of a certain asset or assets and whether the agreement grants a right to use that asset.
Finance leases – in which virtually all of the risks and potential rewards associated with ownership of an asset are transferred to the Group – are capitalised at the start of the lease at the lower of the leased asset's fair value or the present value of the minimum lease payments. A lease liability is recognised for the same amount. Lease payments are divided into fi nancing expenses and repayment of the lease liability, so that interest is paid on the residual carrying amount of the lease liability at a constant rate. Financing expenses are recognised in profi t and loss in the period in which they arise.
If the transfer of title to the Group at the end of the lease term is not suffi ciently certain, capitalised leased assets are fully depreciated over the shorter of the lease term and the asset's useful life. Otherwise, the period of depreciation is the leased asset's useful life.
Lease instalments for operating leases are recognised as expenses in profi t and loss on a straight-line basis over the duration of the lease.
The HHLA Group lets properties in and around the Port of Hamburg as well as offi ce properties, warehouses and other commercial space. The rental contracts are classifi ed as operating leases, as the main risks and potential rewards of the properties remain with the Group. The properties are therefore held as investment properties at amortised cost.
Rental income from investment properties is recognised on a straight-line basis over the term of the leases.
Income is recognised when it is probable that the economic benefi t will fl ow to the Group and the amount of income can be determined reliably. The following criteria must also be met for income to be recognised:
Income is recognised when the principal risks and potential rewards incidental to ownership of the goods and merchandise sold have been transferred to the buyer.
Income from services is recognised in proportion to the progress of the project in question. The extent to which the service has been provided is determined by the number of hours worked as of the balance sheet date as a percentage of the total number of hours estimated for the project. If the result of a service transaction cannot be estimated reliably, income is recognised only to the extent that the expenses incurred are eligible for reimbursement.
Income from incidental rental expenses, which was previously recognised in revenue, has been accounted for differently since the fi rst quarter of 2011. It is now included in other operating income. This income relates primarily to the Real Estate subgroup. The item includes income for operating costs that can be charged to tenants. This income does not constitute revenue due to its transitory nature. The corresponding fi gures in the income statement for last year have been adjusted accordingly.
| in € thousand | Revenue | income | Other operating | |
|---|---|---|---|---|
| 2011 | 2010 | 2011 | 2010 | |
| Before reclassifi cation |
1,222,330 | 1,073,122 | 38,670 | 37,752 |
| Reclassifi cation | - 5,058 | - 5,306 | 5,058 | 5,306 |
| After reclassifi cation | 1,217,272 | 1,067,816 | 43,728 | 43,058 |
Interest income and interest expenses are recognised when they are accrued or incurred.
Income from dividends is recognised in profi t and loss when the Group has a legal right to payment. This does not apply to dividends distributed by companies accounted for using the equity method.
Operating expenses are recognised when the service is rendered or when the expense is incurred. Income and expenses resulting from identical transactions or events are recognised in the same period. Rental expenses are recognised on a straight-line basis over the lease term.
Government grants are recognised when there is reasonable certainty that they will be granted and the company fulfi ls the necessary conditions. Grants paid as reimbursement for expenses are recognised as income over the period necessary to offset them against the expenses for which they are intended to compensate. If grants relate to an asset they are deducted from the asset's cost of purchase and recognised in profi t and loss on a straight-line basis by reducing the depreciation for the asset over its useful life.
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 recognised by using the balance sheet liabilities method on all temporary differences between the carrying amount of an asset or liability in the balance sheet and the amount for tax purposes, as well as on tax loss carry-forwards.
Deferred tax liabilities are recognised for all taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary 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. Unrecognised deferred tax assets are reviewed on each balance sheet date and recognised proportionate to the likelihood that future taxable profi ts will make it possible to use deferred tax assets.
Deferred tax assets and liabilities are measured using the tax rates expected to apply in the period in which the asset is realised or the liability is met. Tax rates (and tax regulations) are applied if they have already been enacted as of the balance sheet date.
Income taxes relating to items recognised directly in equity are recognised in equity, likewise not affecting net income.
Deferred tax assets and liabilities are netted only if the deferred taxes relate to income taxes for the same tax authority and the current taxes may also be set off against one another.
The fair value of fi nancial instruments is determined on the basis of market values or valuation methods. For cash and other current primary fi nancial instruments, fair value is equivalent to the carrying amounts on the respective balance sheet dates.
For non-current receivables and other fi nancial assets, as well as non-current provisions and liabilities, fair value is measured based on expected cash fl ows using reference rates of interest at the balance sheet date. The fair value of derivative fi nancial instruments is determined on the basis of reference interest rates and futures prices at the balance sheet date.
The Group uses derivative fi nancial instruments such as interest rate swaps, interest rate caps and currency futures to hedge against interest and currency risks. These derivative fi nancial instruments are initially recognised at fair value at the time the contracts are concluded and subsequently revalued at fair value.
Gains and losses from changes in the fair value of derivative fi nancial instruments which do not meet the criteria for qualifi cation as hedging transactions are recognised immediately through profi t and loss.
For hedge accounting purposes, hedging instruments are classifi ed as cash fl ow hedges if they serve as a hedge against the risk of fl uctuations in cash fl ows which can be attributed to a recognised asset or liability, or a forecast transaction.
A hedge for the currency risk of a fi xed obligation is treated as a cash fl ow hedge.
At the beginning of a hedging relationship, the Group formally designates the hedging relationship to be recognised as a hedging transaction, as well as the risk management aims and strategies relating to the hedge, and documents them. The documentation includes identifi cation of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and a description of how the company will assess the hedging instrument's effectiveness in offsetting the exposure to changes in the hedged item's fair value or cash fl ows attributable to the hedged risk. These hedging relationships are considered to be highly effective in offsetting changes in fair value or cash fl ows attributable to the hedged risk. The hedges are assessed on an ongoing basis to determine whether they were actually highly effective throughout the fi nancial reporting period for which the hedge was designated.
There were no hedging transactions to hedge fair value or net investments in a foreign operation during the reporting period. Cash fl ow hedges which meet the strict criteria for recognition as hedging relationships are recognised as follows:
The effective portion of gains or losses from changes in the fair value of a hedging instrument is recognised directly in equity, taking account of the deferred taxes, while the ineffective portion is recognised in profi t and loss.
The amounts recognised in equity are recorded in the income statement in the period affected by the hedged transaction, e.g. when the hedged fi nancial income or expense affects profi t and loss or when a forecast sale or purchase occurs. If the hedged transaction is the acquisition cost of a non-fi nancial asset or a non-fi nancial liability, the amounts recognised in equity are added to the originally recognised carrying amount of the non-fi nancial asset or liability.
If the forecast transaction is no longer expected to occur, the amounts previously recognised in equity are recognised in profi t and loss for the period. If the hedging instrument expires, or is sold, terminated or exercised, or rolled over into another hedging instrument, or if the Group withdraws the designation as a hedging instrument, the amounts previously recognised in equity remain separately recognised in equity until the forecast transaction occurs.
Preparing the Consolidated 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 and on a going concern basis.
The amounts which actually arise may differ from those resulting from estimates and assumptions.
The accounting and valuation principles applied are explained in Note 6. Material assumptions and estimates affect the following issues:
The fair value of the assets acquired and liabilities and contingent liabilities assumed as a result of business combinations must be estimated. For this purpose HHLA either makes use of opinions
from independent external experts or calculates the fair value in ternally using suitable calculation models. These are normally based on discounted cash fl ows. Depending on the nature of the assets or the availability of information, market price, capital value and cost-oriented valuation methods are applied.
The Group tests goodwill for impairment at least once a year. This requires an estimate of the fair value less selling costs or the value in use of the cash-generating units to which the goodwill has been allocated. To estimate the fair value or value in use, the Group must forecast the likely future cash fl ows from the cash-generating unit and also choose an appropriate discount rate with which to calculate the present value of these cash fl ows. Unforeseeable changes may mean that the assumptions used during planning are no longer appropriate, making it necessary to adjust plans. An impairment loss may be incurred as a result. As of 31 December 2011, the carrying value of the goodwill reported was € 38,691 thousand (previous year: € 41,561 thousand). For more information, please refer to Note 22.
These activities relate to the development of software within the Group, which are capitalised as soon as the recognition requirements pursuant to IAS 38.57 are fulfi lled. HHLA amortises the software over the expected useful life of three to seven years from the point that the software comes into use. As of 31 December 2011, the carrying amount of intangible assets resulting from internal development activities came to € 25,859 thousand (previous year: € 26,459 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 2011, the carrying amount came to € 180,062 thousand (previous year: € 185,568 thousand). Detailed information is avai lable in Note 24.
Actuarial opinions are commissioned annually to determine pension obligation costs. These calculations include assumptions about demographic changes, salary and pension increases, and interest, infl ation and fl uctuation rates. Because these assumptions are long-term in nature, the observations are assumed to be characterised by material uncertainties. As of 31 December 2011, the present value of the company's pension obligations was € 313,729 thousand (previous year: € 329,221 thousand). More detailed information is available in Note 35.
All employees who have signed, or are expected to sign, an agreement are taken into consideration when recognising and measuring provisions for phased early retirement. The number of employees expected to sign is an estimate. The appraisal reports are also based on actuarial assumptions. As of 31 December 2011, the present value of these obligations was € 9,683 thousand (previous year: € 11,669 thousand). For more information, please refer to Note 36.
Provisions for demolition obligations result from obligations to be met at the end of the lease term under long-term lease agreements with the Free and Hanseatic City of Hamburg. All HHLA Group companies in the Port of Hamburg are obliged to return leased land free of all buildings owned by them at the end of the lease term. The calculations are based on assumptions concerning the amount of demolition work necessary, interest rates and infl ation. As of 31 December 2011, the present value of these obligations was € 40,758 thousand (previous year: € 39,107 thousand). For more information, please refer to Note 36.
This item includes, amongst other things, fi nancial settlement obligations to shareholders with non-controlling interests in consolidated subsidiaries. These liabilities arise in cases where HHLA has concluded a profi t and loss transfer agreement with a subsidiary which entitles shareholders with non-controlling interests to receive fi nancial settlements. Liabilities from fi nancial settlement obligations are entered in the balance sheet at their discounted amount on the reporting date. The parameters used to calculate this amount are subject to signifi cant uncertainties which can cause fi gures to fl uctuate accordingly. As of 31 December 2011, the present value of this obligation was € 96,006 thousand (previous year: € 121,543 thousand). For a more detailed explanation, please refer to Notes 34, 37 and 46.
Assumptions and estimates are also made for value adjustments on doubtful receivables, for determining the duration of amortisation or depreciation for intangible assets and property, plant and equipment, respectively, for determining other provisions and for the application of deferred taxes to tax loss carry-forwards.
The income statement has been prepared using the total expenditure format.
Revenue can be broken down into the following segments:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Container | 707,643 | 594,266 |
| Intermodal | 355,827 | 315,561 |
| Logistics | 108,541 | 115,280 |
| Holding/Other | 16,110 | 15,410 |
| Real Estate | 29,151 | 27,299 |
| 1,217,272 | 1,067,816 |
Revenue was generated by the various regions as follows:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Germany | 969,422 | 841,398 |
| EU | 200,050 | 175,296 |
| Outside EU | 47,800 | 51,122 |
| 1,217,272 | 1,067,816 |
Please refer to Note 43 for further information.
Inventories changed as follows:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Changes in inventories of fi nished and unfi nished products and service work |
||
| in progress | 602 | - 1,149 |
Own work capitalised can be broken down into:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Container | 6,553 | 7,007 |
| Intermodal | 66 | 26 |
| Logistics | 119 | 49 |
| Holding/Other | 437 | 277 |
| 7,175 | 7,359 |
Own work capitalised results mainly from technical work capitalised in the course of construction work and development activities.
Other operating income was made up as shown below:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Compensation | 17,509 | 4,463 |
| Reimbursements | 7,422 | 7,732 |
| Income from other accounting periods | 3,424 | 6,314 |
| Proceeds on disposal of property, plant and equipment |
2,591 | 895 |
| Income from exchange rate differences | 1,760 | 1,844 |
| Income from reversal of provisions | 1,558 | 12,050 |
| Income from reversal of impairment loss | 0 | 3,020 |
| Other operating income | 9,464 | 6,740 |
| 43,728 | 43,058 |
€ 15,000 thousand of the income from compensation was paid to UNIKAI Hafenbetrieb and LZU Leercontainer Zentrum Unikai by HPA for their loss of usage of leased port areas. Reimbursements related primarily to costs which were passed on in connection with leases.
In the year under review, income from other accounting periods did not consist of any signifi cant single items. By contrast, unclaimed reimbursements for customers and uninvoiced construction services totalling € 4,340 thousand were included in the previous year.
In the previous year, income from the reversal of provisions was 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 write-backs in 2010 included write-ups to fair value amounting to € 2,000 thousand on non-current assets held for sale which were sold during that year.
The cost of materials can be broken down as follows:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Raw materials, consumables and supplies |
82,862 | 63,335 |
| External staff | 261 | 193 |
| Purchased services | 349,811 | 308,839 |
| 432,934 | 372,367 |
The expenses for purchased services mainly consist of rail services purchased by the Intermodal segment.
Personnel expenses were as follows:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Wages and salaries | 253,968 | 228,805 |
| Social security contributions and benefi ts | 46,726 | 43,324 |
| Staff deployment | 52,930 | 40,046 |
| Service expense | 5,320 | 3,945 |
| Other retirement benefi t expenses | 583 | 663 |
| 359,527 | 316,783 |
The direct remuneration paid to members of the Executive Board totalled € 4,053 thousand for the fi nancial year 2011 (previous year: € 2,554 thousand). Of this, € 1,765 thousand related to the basic salary (previous year: € 1,450 thousand), € 279 thousand was other benefi ts (previous year: € 53 thousand) and performance-related remuneration made up € 2,009 thousand (previous year: € 1,051 thousand). In addition, € 791 thousand was added to pension commitments (previous year: € 810 thousand). Former members of the Executive Board and their surviving dependants received total payments of € 782 thousand (previous year: € 821 thousand). Total provisions of € 10,340 thousand (previous year: € 11,692 thousand) were formed for pension obligations to former members of the Executive Board and their surviving dependants. For more details on the remuneration paid to the Executive Board and the Supervisory Board, please refer to the Remuneration Report page 47.
Expenses for wages and salaries from the termination of employment totalled € 2,175 thousand in the year under review (previous year: € 108 thousand). These included payments made to former Executive Board members, among other things.
Service expense includes payments from defi ned benefi t pension commitments and similar obligations.
Social security contributions include payments towards the public pension scheme amounting to € 23,018 thousand (previous year: € 19,814 thousand) and payments to the German pension insurance scheme.
The average number of employees changed as follows:
| 2011 | 2010 | |
|---|---|---|
| Fully consolidated companies | ||
| Employees receiving wages | 2,551 | 2,396 |
| Salaried staff | 1,868 | 1,983 |
| Trainees | 114 | 120 |
| 4,533 | 4,499 | |
| Proportionately consolidated companies | ||
| Employees receiving wages | 63 | 55 |
| Salaried staff | 160 | 144 |
| Trainees | 0 | 0 |
| 223 | 199 | |
| 4,756 | 4,698 |
During the year under review, HHLA decided to roll out an em ployee stock purchase plan in 2012. Each eligible member of staff will be given the opportunity to purchase Class A shares worth € 180 to € 910 at a reduced price. Shares will be offered with a total reduction of 50 to 100 % of the stock market price. The plan will be open to all Group employees with a permanent, unterminated contract of employment or training contract on 31 December 2011 and on the day the share price is determined. A fi nal decision has yet to be made on the specifi c regulations which will apply to the employee stock purchase plan. Provisions of € 1,612 thousand were formed for this obligation based on the anticipated uptake in line with the advertised conditions. They were recorded in personnel expenses.
Other operating expenses were made up as shown:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Leasing | 42,554 | 41,342 |
| External maintenance services | 39,767 | 28,405 |
| Consultancy, services, insurance and auditing expenses |
31,389 | 24,783 |
| Expenses from exchange rate differences | 2,949 | 1,956 |
| Travel expenses, advertising and promotional costs |
2,918 | 2,768 |
| Venture expenses | 2,748 | 1,968 |
| External and internal cleaning costs | 2,590 | 2,630 |
| Other personnel expenses | 2,076 | 2,175 |
| Other taxes | 1,950 | 2,099 |
| Postage and telecommunications costs | 1,892 | 1,757 |
| Expenses from other accounting periods | 1,621 | 1,273 |
| Losses on the disposal of property, plant and equipment |
1,242 | 813 |
| Other | 9,178 | 9,077 |
| 142,874 | 121,046 |
See Note 44 for further details of leasing expenses.
Depreciation and amortisation in the fi nancial year was as follows:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Intangible assets | 9,786 | 6,404 |
| Property, plant and equipment | 102,294 | 92,709 |
| Assets classifi ed as fi nance leases | 5,533 | 3,823 |
| Investment property | 8,814 | 11,044 |
| 126,427 | 113,980 |
A classifi cation of the depreciation and amortisation by asset category is shown in the fi xed asset movement schedule. Impairment losses totalling € 6,653 thousand (previous year: € 5,160 thousand) were recognised in the reporting year (see Notes 22 and 23).
The fi nancial result was as follows:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Earnings from associates accounted for using the equity method |
335 | 208 |
| Interest income from bank balances | 2,893 | 1,173 |
| Income from exchange rate effects | 1,938 | 1,396 |
| Interest income from non-affi liated companies |
1,634 | 1,539 |
| Income from the adjustment of settlement obligations to non-controlling interests |
1,568 | 0 |
| Interest income from non-consolidated affi liated companies |
623 | 264 |
| Income from interest rate hedges | 612 | 395 |
| Interest income from plan assets for working lifetime accounts |
328 | 246 |
| Income from lending of fi nancial assets | 2 | 2 |
| Interest income | 9,598 | 5,015 |
| Interest portion of pension provisions | 15,185 | 15,652 |
| Interest expenses on bank borrowing | 10,775 | 11,146 |
| Interest included in lease payments | 4,475 | 1,479 |
| Interest expenses to non-consolidated affi liated companies |
3,034 | 2,983 |
| Interest portion of other provisions | 2,667 | 3,052 |
| Interest expenses to non-affi liated companies |
2,625 | 1,965 |
| Expenses from exchange rate differences | 2,036 | 2,181 |
| Expenses from interest rate hedges | 1,527 | 1,491 |
| Interest and similar expenses | 42,324 | 39,949 |
| Net interest | - 32,726 | - 34,934 |
| Income from other equity investments | 368 | 336 |
| Depreciations of fi nancial assets and non-current fi nancial receivables |
151 | 0 |
| Other fi nancial result | 217 | 336 |
| Financial result | - 32,174 | - 34,390 |
Earnings from associates accounted for using the equity method related to the pro rata annual earnings of CuxPort GmbH, Cuxhaven.
For details of interest income from the adjustment of settlement obligations to shareholders with non-controlling interests, please see Notes 37 and 46.
In the fi nancial year, research costs of € 1,356 thousand (previous year: € 2,532 thousand) were recognised as an expense. These primarily related to research for 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.
Income tax expenses mainly consisted of the following:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Deferred and current income taxes | ||
| Deferred taxes on temporary differences | ||
| Domestic | 3,466 | - 2,285 |
| Foreign | 1,598 | 124 |
| 5,064 | - 2,161 | |
| Deferred taxes on losses carried forward |
||
| Domestic | 306 | 970 |
| Foreign | 0 | 169 |
| 306 | 1,139 | |
| 5,370 | - 1,022 | |
| Current income tax expense | ||
| Domestic | 42,119 | 36,848 |
| Foreign | 8,564 | 8,762 |
| 50,683 | 45,610 | |
| Income tax expense recognised in the income statement |
56,053 | 44,588 |
Current income tax expenses include tax income from other accounting periods amounting to € 1,342 thousand (previous year: € 973 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 | |||
|---|---|---|---|---|
| 31.12.2011 | 31.12.2010 | 31.12.2011 | 31.12.2010 | |
| Intangible assets | 0 | 1,004 | 56 | 1,293 |
| Property, plant and equipment and fi nance leases | 0 | 5,602 | 14,199 | 15,812 |
| Investment property | 0 | 0 | 13,020 | 13,144 |
| Financial assets | 0 | 699 | 101 | 368 |
| Inventories | 23 | 0 | 99 | 82 |
| Receivables and other assets | 2,479 | 763 | 668 | 737 |
| Pension and other provisions | 32,528 | 41,372 | 2,996 | 797 |
| Liabilities | 5,542 | 872 | 2,330 | 99 |
| Tax losses carried forward | 1,582 | 1,889 | 0 | 0 |
| 42,154 | 52,201 | 33,468 | 32,332 | |
| Netted amounts | - 19,911 | - 19,435 | - 19,911 | - 19,435 |
| Balance sheet items | 22,243 | 32,766 | 13,557 | 12,897 |
The offsetting and reconciliation between the income tax expenses and hypothetical tax expenses based on the IFRS result and the Group's applicable tax rate are as follows:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Profi t before tax | 174,841 | 158,518 |
| Income tax expense at hypothetical income tax rate of 32.28 % (previous year: 32.28 %) |
56,439 | 51,170 |
| Adjustment in current income taxes for prior years |
- 1,342 | - 973 |
| Effect of tax rate changes | - 102 | - 1,552 |
| Tax-free income | - 151 | - 78 |
| Non-deductible expenses | 101 | 312 |
| Trade tax additions and reductions | 1,758 | 973 |
| Differences in tax rates | - 4,617 | - 4,737 |
| Impairment losses on deferred tax assets | 2,954 | 0 |
| Other tax effects | 1,014 | - 527 |
| 56,053 | 44,588 |
Deferred taxes are calculated on the basis of the tax rates currently in force in Germany or those expected to apply at the time of realisation. A tax rate of 32.28 % was used for the calculations in both 2010 and 2011. This is made up of corporation tax at 15.0 %, solidarity surcharge of 5.5 % and the trade tax payable in Hamburg of 16.45 %. Limited partnerships are also liable for trade tax. Due to special rules, property management companies generally do not pay trade tax. Trade tax no longer reduces the amount of a company's profi ts on which trade tax is payable; neither does it
lessen the amount on which corporation tax is paid. Due to rules on minimum taxation, tax loss carry-forwards are only partially usable in Germany. Tax losses of up to € 1 million can be set off against taxable profi ts without restriction, and higher tax losses up to a maximum of 60 %.
The effects of tax rates for domestic and foreign taxes that diverge from the Group parent company's tax rate are reported in the offsetting and reconciliation under differences in tax rates.
Deferred tax assets are recognised on tax loss carry-forwards and temporary differences if it is suffi ciently certain that they can be realised in the near future. The Group has corporation tax loss carryforwards of € 6,557 thousand (previous year: € 5,765 thousand) and trade tax loss carry-forwards of € 3,137 thousand (pre vious year: € 5,866 thousand) which it can use without restriction. Corresponding deferred tax assets are carried as a result. No deferred tax assets were recognised for corporation tax loss carryforwards of € 1,610 thousand (previous year: € 647 thousand) and trade tax loss carry-forwards of € 2,851 thousand (pre vious year: € 852 thousand). Under current legislation, the tax losses and interest can be carried forward in Germany without restriction.
Deferred tax assets of € 425 thousand (previous year: € 512 thousand) and deferred tax liabilities of € 21,868 thousand (previous year: € 16,138 thousand) recognised directly in equity without effect on profi t and loss come from actuarial gains and losses on pension provisions, cash fl ow hedges and unrealised gains/losses arising from available-for-sale fi nancial assets.
The income tax recognised in the statement of comprehensive income is made up as follows:
| in € thousand | 2011 | 2010 | ||||
|---|---|---|---|---|---|---|
| Gross | Taxes | Net | Gross | Taxes | Net | |
| Actuarial gains/losses | 18,128 | - 5,892 | 12,236 | - 6,493 | 2,087 | - 4,406 |
| Cash fl ow hedges | - 418 | 114 | - 304 | - 220 | 56 | - 164 |
| Unrealised gains/losses on available-for-sale fi nancial assets |
- 101 | 33 | - 68 | 18 | - 3 | 15 |
| 17,609 | - 5,745 | 11,864 | - 6,695 | 2,140 | - 4,555 |
Profits attributable to other shareholders amounting to € 29,506 thousand (previous year: € 37,703 thousand) mainly relate to shareholders with non-controlling interests in HHLA Container - Terminal Altenwerder GmbH, Hamburg, and METRANS a.s., Prague, Czech Republic.
As one co-shareholder was not entitled to a share in profi ts via the capital share scheme in the year under review, the profi ts attributable to non-controlling interests went down.
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:
| 2011 | 2010 | |
|---|---|---|
| Share of consolidated net profi t attributable to shareholders of the parent company in € thousand |
89,282 | 76,227 |
| Number of common shares in circulation (weighted average) |
72,679,826 | 72,679,826 |
| Basic earnings per share in € | 1.23 | 1.05 |
The basic earnings per share were calculated for the subgroup Port Logistics as follows:
| 2011 | 2010 | |
|---|---|---|
| Share of consolidated net profi t attributable to shareholders of the parent company in € thousand |
84,017 | 69,890 |
| Number of common shares in circulation (weighted average) |
69,975,326 | 69,975,326 |
| Basic earnings per share in € | 1.20 | 1.00 |
The basic earnings per share were calculated for the subgroup Real Estate as follows:
| 2011 | 2010 | |
|---|---|---|
| Share of consolidated net profi t attributable to shareholders of the parent company in € thousand |
5,265 | 6,337 |
| Number of common shares in circulation (weighted average) |
2,704,500 | 2,704,500 |
| Basic earnings per share in € | 1.95 | 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 reporting year. It is intended to issue new shares from the Authorised Capital for the agreed employee stock purchase plan for 2011. Based on the expected participation among employees the number of listed Class A shares outstanding may increase by clearly less than one percent.
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 2011 to distribute a dividend of € 41,732 thousand to holders of common shares in the reporting year for the 2010 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). This resulted in dividends of € 0.55 per Class A share and € 1.20 per Class S share. The remaining undistributed profi t was carried forward to new account.
In 2012, dividends per share of € 0.65 for the subgroup Port Logistics and € 1.00 for the subgroup Real Estate are due to be paid. Based on the number of shares outstanding as at 31 December 2011, this is equivalent to dividends of € 45,484 thousand for the subgroup Port Logistics and of € 2,705 thousand for the subgroup Real Estate. By issuing new shares from the Authorised Capital as intended for the agreed employee stock purchase plan for 2011, the sum for the Port Logistics subgroup may rise marginally by clearly less than one percent until submission to the Annual General Meeting.
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 2010 |
44,245 | 3,923 | 24,023 | 0 | 10,143 | 82,334 |
| Cost | ||||||
| 1 January 2010 | 46,557 | 37,159 | 25,179 | 1,399 | 10,143 | 120,437 |
| 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 | 46,873 | 38,428 | 29,280 | 1,399 | 11,040 | 127,020 |
| Accumulated amortisation and impairment losses |
||||||
| 1 January 2010 | 2,312 | 33,236 | 1,156 | 1,399 | 0 | 38,103 |
| Additions | 3,000 | 1,739 | 1,665 | 6,404 | ||
| Disposals | - 1,409 | - 1,409 | ||||
| Exchange rate effects | 72 | 72 | ||||
| 31 December 2010 | 5,312 | 33,638 | 2,821 | 1,399 | 0 | 43,170 |
| Carrying amount 31 December 2010 |
41,561 | 4,790 | 26,459 | 0 | 11,040 | 83,850 |
| Carrying amount 1 January 2011 |
41,561 | 4,790 | 26,459 | 0 | 11,040 | 83,850 |
| Cost | ||||||
| 1 January 2011 | 46,873 | 38,428 | 29,280 | 1,399 | 11,040 | 127,020 |
| Additions | 3,219 | 3,590 | 595 | 7,404 | ||
| Disposals | - 262 | - 262 | ||||
| Reclassifi cations | 10,285 | - 10,285 | 0 | |||
| Changes in group of consolidated companies |
- 38 | - 38 | ||||
| Exchange rate effects | 49 | 49 | ||||
| 31 December 2011 | 46,873 | 51,681 | 32,870 | 1,399 | 1,350 | 134,173 |
| Accumulated amortisation and impairment losses |
||||||
| 1 January 2011 | 5,312 | 33,638 | 2,821 | 1,399 | 0 | 43,170 |
| Additions | 2,870 | 2,726 | 4,190 | 9,786 | ||
| Disposals | - 258 | - 258 | ||||
| Changes in group of consolidated companies |
- 38 | - 38 | ||||
| Exchange rate effects | 23 | 23 | ||||
| 31 December 2011 | 8,182 | 36,091 | 7,011 | 1,399 | 0 | 52,683 |
| Carrying amount 31 December 2011 |
38,691 | 15,590 | 25,859 | 0 | 1,350 | 81,490 |
The carrying amounts for goodwill relate to the following HHLA segments:
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Container (Rosshafen) | 30,929 | 30,929 |
| Container (HHCT) | 6,493 | 6,493 |
| Intermodal | 1,267 | 4,137 |
| Other | 2 | 2 |
| 38,691 | 41,561 |
The goodwill of € 30,929 thousand disclosed as of the balance sheet date relates to the 100 % stake in HHLA Rosshafen Terminal GmbH, Hamburg, acquired by HHLA in 2006. This goodwill is primarily derived from additional strategic options to expand the Group's handling activities at the sites let by the company.
In the Intermodal segment, the annual impairment test on goodwill for the cash-generating unit consisting of TFG Transfracht Inter-
nationale Gesellschaft für kombinierten Güterverkehr mbH & Co. KG, Frankfurt am Main, led to impairment charges amounting to € 2,870 thousand. The goodwill attributed to this company was written down by this amount and the impairment loss was recognised through profi t and loss. The resulting expense item is shown under depreciation and amortisation. With this impairment the affected goodwill has been fully adjusted.
The impairment was necessary due to a persistent downturn in the fi rm's forecast earnings. The value in use was calculated as the recoverable amount using a discount rate of 6.44 % (previous year: 7.40 %). The earnings forecast used for these calculations is based on the outlook for 2012 to 2016. However, the forecast result was reduced due to the current uncertainties. As of 2016, a continuation value with no growth factor will be used.
Of the internally developed software shown, € 612 thousand was not yet completed as of the balance sheet date (previous year: € 17,763 thousand).
The following tables show the changes in property, plant and equipment:
| in € thousand | Land and buildings |
Technical equipment and machinery |
Other plant, operating and offi ce equipment |
Payments on account and plant under construction |
Total |
|---|---|---|---|---|---|
| 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 amortisation 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 |
| Carrying amount 1 January 2011 | 435,465 | 340,363 | 140,556 | 62,199 | 978,583 |
| Cost | |||||
| 1 January 2011 | 703,513 | 719,018 | 337,374 | 62,199 | 1,822,104 |
| Additions | 42,053 | 15,983 | 44,963 | 14,213 | 117,212 |
| Disposals | - 22,653 | - 16,374 | - 18,050 | - 227 | - 57,304 |
| Reclassifi cations | 6,869 | 27,347 | 6,201 | - 40,417 | 0 |
| Changes in group of consolidated companies |
- 33 | - 33 | |||
| Exchange rate effects | - 52 | 472 | - 18 | 119 | 521 |
| 31 December 2011 | 729,730 | 746,446 | 370,437 | 35,887 | 1,882,500 |
| Accumulated amortisation and impairment losses |
|||||
| 1 January 2011 | 268,048 | 378,655 | 196,818 | 0 | 843,521 |
| Additions | 29,993 | 47,531 | 30,303 | 107,827 | |
| Disposals | - 20,629 | - 16,361 | - 17,305 | - 54,295 | |
| Reclassifi cations | 0 | ||||
| Changes in group of consolidated companies |
- 24 | - 24 | |||
| Exchange rate effects | - 20 | 150 | 1 | 131 | |
| 31 December 2011 | 277,392 | 409,975 | 209,793 | 0 | 897,160 |
| Carrying amount 31 December 2011 | 452,338 | 336,471 | 160,644 | 35,887 | 985,340 |
Within land and buildings, the additions to assets related mainly to a newly completed megaship berth at the Burchardkai container terminal in Hamburg. The investments in technical equipment and machinery concerned the construction and completion of block storage facilities, also at the container terminal in Burchardkai. Additions to other assets, operating and offi ce equipment related primarily to investments in new and replacement straddle carriers and a storage block crane system.
The disposal of assets resulted from the termination of the lease for port areas and the need to clear these sites as a consequence. Some straddle carriers and other ground-handling vehicles were also disposed of.
The plant under construction portfolio recognised in the reporting year primarily relates to terminal expansions in the form of berth and storage area expansions.
In the Logistics segment, there were indications on the balance sheet date that the assets belonging to the cash-generating unit HHLA Frucht- und Kühl-Zentrum GmbH, Hamburg, were impaired. This resulted in impairment losses of € 3,778 thousand. Of this, € 2,655 thousand related mainly to land and buildings, while € 1,005 thousand was attributable to technical equipment and machinery. The impairment volume was allocated using both recoverability criteria and by taking a proportionate approach to the carrying amount of the assets in question. Cash was excluded. The expense item resulting from this impairment is shown under depreciation and amortisation. Impairment became necessary due to a sustained structural shift in fruit logistics. Fruit is increasingly being transported in reefer containers rather than in conventional
reefer ships. It currently looks unlikely that this trend will be reversed in the future. The value in use was calculated as the recoverable amount using a discount rate of 6.44 %. The earnings forecast used for the calculations is based on the outlook for 2012 to 2016.
Buildings, surfacing and movable non-current assets with a carrying amount of € 44,036 thousand (previous year: € 46,841 thousand) were assigned by way of collateral in connection with loans taken up by the Group.
In addition to this, property, plant and equipment was encumbered with land charges totalling € 8,224 thousand in the previous year. Following adjustments to the relevant loan agreements, these land charges were no longer payable as of 31 December 2011.
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 44.
As of the balance sheet date, the Group had obligations of € 81,393 thousand (previous year: € 44,220 thousand) from purchase commitments which were attributable to capitalisation of property, plant and equipment.
In the year under review, HHLA did not receive any public subsidies in connection with the promotion of intermodal transport (previous year: € 951 thousand). As yet unused subsidies from previous years were offset against the ongoing cost of acquiring the relevant assets in the amount of € 8,373 thousand (previous year: € 1,436 thousand) in the reporting year.
Property, plant and equipment includes the following assets which are classifi ed as fi nance leases as per IAS 17:
| in € thousand | Land and buildings |
Technical equipment and machinery |
Other plant, operating and offi ce equipment |
Total |
|---|---|---|---|---|
| Carrying amount 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 amortisation 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 |
| Carrying amount 1 January 2011 | 65,659 | 2,486 | 17,956 | 86,101 |
| Cost | ||||
| 1 January 2011 | 66,307 | 6,604 | 27,051 | 99,962 |
| Additions | 28,051 | 368 | 4,414 | 32,833 |
| Disposals | - 245 | - 26 | - 1,483 | - 1,754 |
| Reclassifi cations | - 4,613 | - 4,613 | ||
| Changes in group of consolidated companies | 0 | |||
| Exchange rate effects | - 241 | - 38 | - 279 | |
| 31 December 2011 | 94,113 | 2,092 | 29,944 | 126,149 |
| Accumulated amortisation and impairment losses | ||||
| 1 January 2011 | 648 | 4,118 | 9,095 | 13,861 |
| Additions | 1,772 | 505 | 3,255 | 5,532 |
| Disposals | - 245 | - 10 | - 1,275 | - 1,530 |
| Reclassifi cations | - 3,085 | - 3,085 | ||
| Changes in group of consolidated companies | 0 | |||
| Exchange rate effects | - 157 | - 10 | - 167 | |
| 31 December 2011 | 2,175 | 1,371 | 11,065 | 14,611 |
| Carrying amount 31 December 2011 | 91,938 | 721 | 18,879 | 111,538 |
The additions to land and buildings in the reporting year relate entirely to a newly completed mega-ship berth at the Burchardkai container terminal in Hamburg, which HHLA has leased from a related party, Hamburg Port Authority AöR, Hamburg (HPA). For details, see Note 44.
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 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 amortisation 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 |
| Carrying amount 1 January 2011 | 178,557 | 7,011 | 185,568 |
| Cost | |||
| 1 January 2011 | 267,477 | 7,011 | 274,488 |
| Additions | 1,636 | 2,497 | 4,133 |
| Disposals | - 1,210 | - 1,210 | |
| Reclassifi cations | 6,739 | - 6,739 | 0 |
| 31 December 2011 | 274,642 | 2,769 | 277,411 |
| Accumulated amortisation and impairment losses | |||
| 1 January 2011 | 88,920 | 0 | 88,920 |
| Additions | 8,814 | 8,814 | |
| Disposals | - 385 | - 385 | |
| Reversal of impairment loss | 0 | ||
| Reclassifi cations | 0 | ||
| 31 December 2011 | 97,349 | 0 | 97,349 |
| Carrying amount 31 December 2011 | 177,293 | 2,769 | 180,062 |
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 property at the end of the fi nancial year was € 44,189 thousand (previous year: € 46,459 thousand). The direct operating expenses for investment property amounted to € 22,268 thousand (previous year: € 21,868 thousand) in the reporting year.
The fair value of the investment property totalled € 444,775 thousand (previous year: € 429,995 thousand). The fair values were deter mined by HHLA's Real Estate segment.
Fair values are measured by applying the discounted cash fl ow method (DCF method) to the forecast net cash fl ows from manag ingthe properties. The DCF calculation includes detailed forecasts of ten years or up to the end of the useful lives of properties with a remaining useful life of less than ten years.
During the detailed forecast period, the contractually agreed rental income from each property and other specifi c valuation parameters are used to derive the future operating costs, management expenses and maintenance costs. The parameters used are deriv ed from the leases and/or company forecasts.
The cash fl ows are discounted consistently using standard market interest rates of 5.53 to 8.61 % 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 build ings 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 44.
Investment properties with a residual carrying amount of € 95,995 thousand (previous year: € 94,454 thousand) relate to buildings in the Speicherstadt historical warehouse district. Payments made on account and plant under construction account for € 2,744 thousand of this (previous year: € 7,011 thousand). As these buildings are designated as historical landmarks, extensive refurbishment work must comply with the relevant statutory restrictions.
CuxPort GmbH, Cuxhaven, is recognised under shares in associated companies.
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Shares in associated companies | 1,830 | 1,620 |
The following table shows the changes in fi nancial assets:
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Securities | 3,323 | 2,707 |
| Shares in affi liated companies | 1,519 | 2,264 |
| Other equity investments | 399 | 341 |
| Other fi nancial assets | 3,845 | 2,972 |
| 9,086 | 8,284 |
In the reporting year – as in 2010 – the securities relating to insolvency insurance for phased early retirement entitlements were netted out against the corresponding phased early retirement obligations because they fulfi l the conditions for plan assets as per IAS 19. The securities portfolio recognised as plan assets in the fi nancial year amounted to € 5,639 thousand (previous year: € 3,983 thousand), see Note 36. Before balancing, this results in a securities portfolio of € 8,962 thousand (previous year: € 6,690 thousand).
The shares in affi liated companies include shares in Group companies which are of minor importance for giving a true and fair view of the Group's net assets, fi nancial and earnings position and are therefore not consolidated.
Shares in affi liated companies and other equity investments are carried at amortised cost.
Other fi nancial assets essentially comprise receivables from a graduated rent amounting to € 1,375 thousand (previous year: € 734 thousand), receivables from HPA amounting to € 405 thousand (previous year: € 414 thousand) and receivablesfrom METRANS (Danubia) Kft., Győr, Hungary, worth € 500 thousand (previous year: € 300 thousand).
Inventories are made up as follows:
Impairment losses on inventories recognised as an expense amount to € 668 thousand (previous year: € 837 thousand). This expense is recorded under the cost of materials. See Note 12.
Trade receivables came to:
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Trade receivables | 151,771 | 126,516 |
The trade receivables are owed by third parties, do not bear interest and all have a remaining term of less than one year. No receivables were assigned as collateral for fi nancial liabilities, either in 2010 or in the year under review. Collateral for trade receivables is only held to a minor extent (e. g. rental guarantees).
Details of impairment allowances for trade receivables can be found in Note 46.
Receivables from related parties are made up as follows:
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Receivables from the Free and Hanseatic City of Hamburg (FHH) |
684 | 128 |
| Other receivables from related parties and joint ventures |
3,072 | 2,576 |
| 3,756 | 2,704 |
Other fi nancial receivables consist of the following:
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Current receivables from employees | 1,387 | 281 |
| Current reimbursement claims against insurers |
426 | 98 |
| Positive fair values of interest rate caps | 1 | 12 |
| Other current fi nancial receivables | 615 | 2,216 |
| 2,429 | 2,607 |
In the reporting year, current receivables from employees consisted mainly of prepayments for company pensions.
Other assets can be broken down as shown below:
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Current tax credits | 8,188 | 8,976 |
| Payments on account | 1,295 | 579 |
| Other | 7,293 | 5,654 |
| 16,776 | 15,209 |
In addition to income tax receivables, current tax credits include transaction tax claims amounting to € 7,085 thousand (previous year: 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.
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Income tax receivables | 3,591 | 20,972 |
Income tax receivables result from offsettable taxes paid on investment income and advance tax payments.
Cash, cash equivalents and short-term deposits consist of the following:
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Cash and cash equivalents with a maturity of up to 3 months |
221,044 | 79,114 |
| Short-term deposits with a maturity of 4 – 6 months |
30,000 | 20,000 |
| Bank balances and cash in hand | 78,952 | 136,379 |
| 329,996 | 235,493 |
Cash, cash equivalents and short-term deposits are made up of cash in hand and various bank balances in different currencies.
Cash of € 30,258 thousand (previous year: € 21,537 thousand) is subject to foreign exchange outfl ow restrictions.
Bank balances bear interest at variable rates applicable to demand accounts. Short-term deposits are made for varying periods of time ranging from one day to 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 2.1 % (previous year: 0.0 and 1.6 %). The fair value of cash and cash equivalents is largely equivalent to their carrying value.
As of the balance sheet date, the Group had unused lines of credit amounting to € 26,989 thousand (previous year: € 26,718 thousand) and had met all the conditions for their use.
Changes in the individual components of equity for the 2011 and 2010 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 no-par-value share represents € 1.00 of nominal capital on paper.
The nominal capital has been fully paid in.
In the course of the stock fl otation on 2 November 2007, 22,000,000 Class A shares were sold on the market. This corresponds to a free fl oat of approx. 30 % of HHLA's nominal capital.
As of the balance sheet date, the Free and Hanseatic City of Hamburg, through the company HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH, Hamburg, holds 69.65 % 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 authorised, subject to the approval of the Supervisory Board, to increase the company's nominal capital by 1 September 2012 by issuing new Class A shares for subscription in cash and/or in kind in one or more steps by up to € 33,797,750 (authorised capital I). The holders of Class A shares are to be given subscription rights; the subscription rights of holders of Class S shares are excluded. The remaining authorised capital I was reduced to € 33,742,924 as a result of the employee stock purchase plan implemented in 2008.
The Executive Board is authorised, with the approval of the Supervisory Board, to exclude the statutory subscription rights of holders of Class A shares,
(a) in the case of a capital increase for cash in which the amount of capital consisting of Class A shares does not exceed 10 % of the nominal capital (either at the point in time when this authorisation comes into effect or is exercised) and the issue price of the new shares is not substantially lower than the stock exchange price of those shares of the same class and rights which are already listed at the time of the fi nal determination of the issue price by the Executive Board; when calculating the 10 % limit, the proportionate amount of nominal capital allotted to new or 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 authorised capital I came into effect, applying Section 186 (3) sentence 4 of the AktG accordingly;
(b) if it increases the nominal capital by subscription in kind for the purpose of acquiring companies, equity stakes in companies, parts of companies, intellectual property rights such as patents, trademarks or licences to use the above, or other product rights;
(c) if it is necessary to do so in order to offset fractional amounts; or
(d) in order to offer the new shares for sale to employees of the company and its subsidiaries (employee participation).
The Executive Board shall be authorised, with the consent of the Supervisory Board, to specify the further details of the implementation of the capital increases out of authorised capital I, in particular the additional rights embodied in share certifi cates and the other conditions of the share issue. After each share increase from authorised capital the Supervisory Board is authorised to adjust the articles of association accordingly, in particular with regard to the amount of nominal capital and the number of 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 association, the Executive Board is also authorised, 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 (authorised capital II). The holders of Class S shares are to be given subscription rights; the subscription rights of holders of Class A shares are excluded.
The Executive Board shall be authorised, with the consent of the Supervisory Board, to specify the further details of the implementation of the capital increases out of authorised capital II, in particular the additional rights embodied in a share certifi cate and the other conditions of the share issue. Subject to the approval of the Supervisory Board the Executive Board is also authorised to exclude fractional amounts of shares from the Class S shareholders' subscription rights. After each share increase from authorised capital the Supervisory Board is authorised to adjust the articles of association accordingly, in particular with regard to the amount of nominal capital and the number of no-par-value S shares in existence.
The Annual General Meeting of HHLA held on 16 June 2010 resolved to authorise 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. Contingent capital in the same amount was created for this purpose.
The Annual General Meeting of HHLA held on 16 June 2011 additionally authorised the company's Executive Board to purchase Class A treasury shares up to a maximum of 10 % of the portion of the company's nominal capital accounted for by Class A shares at that time. In addition to being sold on the stock exchange or offered with subscription rights to all shareholders, the shares acquired under this authorisation may – subject to the approval of the Supervisory Board – be used in the cases stipulated by the resolution excluding other shareholders' subscription rights or be cancelled either in whole or in part without the need for an add i tional resolution by the Annual General Meeting. This authorisation expires on 15 December 2016.
HHLA does not currently hold any treasury shares. There are no plans to buy back shares.
The Group's capital reserve includes premiums from share issues and the associated costs of issue, which are deducted from the capital reserve. It also comprises premiums from capital increases at subsidiaries with minorities and a reserve increase from an employee stock purchase plan. A capital increase conducted in prior years reduced the capital reserve.
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 companies 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 the currently applicable version of IAS 19, which offers a choice of how to treat actuarial gains and losses from defi ned benefi t pension obligations, the HHLA Group equity also includes all actuarial gains and losses from defi ned benefi t pension obligations. This item additionally comprises changes in the fair value of hedging instruments (cash fl ow hedges), changes in the fair value of working lifetime accounts and the corresponding tax effects.
The reserve for translation differences enables the recognition of differences arising on the translation of fi nancial statements for foreign subsidiaries.
Non-controlling interests comprise outside interests in the Group companies' consolidated equity and totalled € 4,258 thousand as of the end of fi nancial year (previous year: € -12,257 thousand).
In 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 Gesellschaft mit beschränkter Haftung, 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.
In accordance with IAS 32, the minority shareholder's future estimated entitlements to fi nancial settlements are recognised as other fi nancial liabilities for the remaining term of the profi t and loss transfer agreement, although the agreement states that the variable entitlement to a settlement only arises once the annual fi nancial statements are approved. This will contribute € 96,006 thousand towards other fi nancial liabilities for the fi nancial years 2011 to 2014. For more details, please refer to Note 46.
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 %.
| Equity ratio | 36 % | 33 % |
|---|---|---|
| Total assets | 1,811,532 | 1,715,137 |
| Equity | 644,662 | 567,002 |
| in € thousand | 31.12.2011 | 31.12.2010 |
The year-on-year increase in the equity ratio was mainly due to consolidated net income of € 118.8 million included in retained earnings. A profi t and loss transfer agreement signed in September 2010 has caused the equity ratio to fall sharply since the fi nancial year 2010. For further details, please refer to the section on Noncontrolling interests.
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 € 740,668 thousand and an equity ratio of 41 % 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 39 for more information.
Provisions for pensions and similar obligations are formed for commitments arising from both vested rights to future pension payments and current payments to active and former members of HHLA Group companies in Germany and any surviving dependants who are entitled to receive such benefi ts. A distinction is made between defi ned benefi t and defi ned contribution company pension plans.
In the case of defi ned benefi t plans, the Group is obliged to make the agreed payments to active and former employees. HHLA's pension scheme is fi nanced by both provisions and funds.
Company retirement benefi ts are paid on the basis of various entitlements. As well as individual agreements these are primarily the collective company pension agreement (BRTV) and the so-called 'port pension', which is governed by a collective labour agreement for port workers in German seaports.
The BRTV is a total benefi t plan. HHLA guarantees the participating employees a certain amount of benefi ts, which are made up of the statutory pension and the company pension. The amount of total benefi ts is determined by a variable percentage (according to years of service) of a fi ctitious net payment in the fi nal wage or salary band based on social security data for the year 1999.
The amount of the port pension depends on the years in service and is determined by the collective labour agreement for German seaports.
Based on these pension plans, the Group forms provisions for pensions and similar obligations for the amount of expected future retirement and surviving dependants' pensions. External actuaries calculate the amount of the obligation using the projected unit credit method.
Shown below are the amounts recognised for benefi t commitments in the reporting year and the previous four years:
| in € thousand | 31.12.2011 | 31.12.2010 | 31.12.2009 | 31.12.2008 | 31.12.2007 |
|---|---|---|---|---|---|
| Present value of pension commitments | 312,119 | 329,221 | 323,824 | 299,862 | 311,873 |
| Obligations from working lifetime accounts | 1,610 | 1,913 | 1,317 | 802 | 482 |
| 313,729 | 331,134 | 325,141 | 300,664 | 312,355 |
The following table reconciles the present value of the obligation arising from pension commitments at the beginning and end of the year:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Present value of pension obligations as of 01.01. |
329,221 | 323,824 |
| Current service expense | 3,587 | 3,449 |
| Past service expense | 1,131 | 0 |
| Interest expenses | 14,813 | 15,383 |
| Pension payments | - 19,452 | - 19,850 |
| Actuarial gains (-) and losses (+) | - 17,181 | 6,415 |
| Present value of pension obligations as of 31.12. |
312,119 | 329,221 |
The balance sheet shows the full present value of pension obligations including actuarial gains and losses. The reported pension obligation relates to an unfi nanced plan.
The following fi gures were recognised in the income statement:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Current service expense | 3,587 | 3,449 |
| Past service expense | 1,131 | 0 |
| Interest expenses | 14,813 | 15,383 |
| 19,531 | 18,832 |
The gains and losses reported under other comprehensive income developed as follows:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Actuarial gains as of 01.01. | 49,838 | 56,253 |
| Changes in fi nancial year | 17,181 | - 6,415 |
| Actuarial gains as of 31.12. | 67,019 | 49,838 |
The following actuarial assumptions are used to determine pension provisions:
| in % | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Discount rate | 5.00 | 4.50 |
| Projected salary increase | 3.00 | 3.00 |
| Projected increase in pensions (without BRTV) |
2.00 | 2.00 |
| Projected increase in pensions (monthly pensions under BRTV) |
1.00 | 1.00 |
| Fluctuation rate | 2.10 | 2.10 |
| Rate of infl ation | 2.00 | 2.00 |
The biometric data is drawn from the 2005 G actuarial tables by Prof. Dr. Klaus Heubeck.
HHLA derives the interest rates used for discounting from corporate loans with a very good credit rating whose terms and payouts match HHLA's pension plans.
In the 2011 fi nancial year, HHLA made pension payments for plans totalling € 19,452 thousand. HHLA anticipates the following payments for pension plans over the next fi ve years:
| Years | in € thousand |
|---|---|
| 2012 | 20,150 |
| 2013 | 20,140 |
| 2014 | 20,217 |
| 2015 | 20,336 |
| 2016 | 20,423 |
| 101,266 |
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 benefi t commitments changed as follows during the reporting year and the previous four years:
| in € thousand | 31.12.2011 | 31.12.2010 | 31.12.2009 | 31.12.2008 | 31.12.2007 |
|---|---|---|---|---|---|
| Present value of obligations | 9,780 | 8,325 | 5,029 | 2,635 | 1,894 |
| Present value of plan assets (fund shares) | - 8,170 | - 6,412 | - 3,712 | - 1,833 | - 1,412 |
| Uncovered allocations | 1,610 | 1,913 | 1,317 | 802 | 482 |
The present value of the obligations developed as follows:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Present value of the obligations as of 01.01. |
8,325 | 5,029 |
| Current service expense | 2,495 | 2,135 |
| Service expense for prior years | 0 | 672 |
| Interest expenses (recognised in income statement) |
372 | 269 |
| Actuarial gains (-) and losses (+) | - 1,391 | 233 |
| Capital payments | - 53 | - 52 |
| Other | 32 | 39 |
| Present value of the obligations as of 31.12. |
9,780 | 8,325 |
With the exception of the covered part of the service expenses for plan assets, the following amounts were recognised in the income statement:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Current service expense including salary conversion |
2,495 | 2,135 |
| thereof gathered at costs as uncovered part |
602 | 496 |
| thereof gathered at plan assets as covered part |
1,893 | 1,639 |
| Interest expenses | 372 | 269 |
| Expected income from the plan assets | - 328 | - 246 |
| Benefi ts paid | 1 | 1 |
| 2,540 | 2,159 |
The present value of the plan assets developed as follows:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Present value of the plan assets as of 01.01. |
6,412 | 3,712 |
| Expected income from the plan assets | 328 | 246 |
| Inpayment | 1,893 | 1,639 |
| Actuarial gains (-) and losses (+) | - 443 | 155 |
| Capital payments | - 52 | - 51 |
| Retroactive allocations | 0 | 672 |
| Other | 32 | 39 |
| Present value of the plan assets as of 31.12. |
8,170 | 6,412 |
The plan assets consist solely of shares in money market and investment funds. The expected return on the plan assets is 5.00 % (previous year: 4.50 %). Losses of € 429 thousand were recorded on the plan assets in the fi nancial year (previous year: € 5 thousand).
The following actuarial assumptions are used to determine provisions for working lifetime accounts:
| in % | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Discount rate | 5.00 | 4.50 |
| Forecast increase in pay | 3.00 | 3.00 |
| Fluctuation rate | 0.00 | 0.00 |
The gains and losses offset in equity developed as follows:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Actuarial losses (-) as of 01.01. | - 116 | - 38 |
| Changes in the fi nancial year | 948 | - 78 |
| Actuarial gains (+) and losses (-) as of 31.12. |
832 | - 116 |
Shown below is the structure of the plan asset portfolio for obligations from working lifetime accounts:
| 2011 | 2010 | |
|---|---|---|
| Money market funds | 51 % | 49 % |
| Mixed funds | 31 % | 31 % |
| Fund of funds | 16 % | 17 % |
| Annuity funds | 2 % | 3 % |
| 100 % | 100 % |
In the fi nancial year under review, HHLA made payments for plans totalling € 53 thousand. In return, the company acquired corresponding securities holdings worth € 52 thousand. The outfl ow of funds therefore amounted to € 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 |
|---|---|
| 2012 | 19 |
| 2013 | 39 |
| 2014 | 41 |
| 2015 | 37 |
| 2016 | 69 |
| 205 |
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 € 300 thousand in the reporting year (previous year: € 238 thousand).
HHLA paid € 23,018 thousand (previous year: € 19,814 thousand) into the state pension system as its employer's contribution.
The following table shows signifi cant other non-current and current provisions:
Provisions for demolition obligations result from obligations to be met at the end of the lease term under long-term lease agreements with the Free and Hanseatic City of Hamburg. All HHLA Group companies in the Port of Hamburg are obliged to return leased land free of all buildings owned by them at the end of the respective lease term. To calculate the amount of the provision it was assumed that the obligation would be carried out in full for all leased property, with the exception of buildings designated as historical landmarks. The demolition obligations relate to HHLA's Container, Real Estate and Logistics segments and are discounted at a rate of 4.5 % p. a. as in the previous year. In the reporting year, an anticipated price increase of 2.0 % was used to calculate the provisions shown. This rate is derived from the German construction cost index.
The cash outfl ow of these provisions is expected in the period 2025 – 2037.
Provisions for expected increases in rents relate to anticipated but as yet uninvoiced increases in rents for leased port areas, properties in the Speicherstadt historical warehouse district and quay walls, primarily in Hamburg. The provisions are formed based on the corresponding lease agreements.
In the 2011 fi nancial year, the lease of a newly completed quay wall at the Container Terminal Burchardkai prompted an appropriation of € 909 thousand.
The total amount transferred also includes € 3,012 thousand for anticipated increases in rents for quay walls which are already leased. Provisions were upped by € 1,121 thousand to compensate for expected increases in the rents charged for areas leased in the Speicherstadt historical warehouse district.
| in € thousand | 31.12.2011 31.12.2010 |
|||||
|---|---|---|---|---|---|---|
| Total | Thereof current |
Thereof non-current |
Total | Thereof current |
Thereof non-current |
|
| Demolition obligations | 40,758 | 0 | 40,758 | 39,107 | 0 | 39,107 |
| Expected increases in rents | 13,253 | 13,253 | 0 | 6,634 | 6,634 | 0 |
| Phased early retirement | 9,683 | 2,733 | 6,950 | 11,669 | 3,950 | 7,719 |
| Bonuses and single payments | 8,136 | 8,136 | 0 | 6,709 | 6,709 | 0 |
| Insurance excesses | 3,978 | 3,978 | 0 | 2,594 | 2,594 | 0 |
| Anniversaries | 2,284 | 0 | 2,284 | 2,247 | 0 | 2,247 |
| Legal fees and litigation expenses | 952 | 0 | 952 | 1,070 | 0 | 1,070 |
| Other | 3,240 | 658 | 2,582 | 4,431 | 2,009 | 2,422 |
| 82,285 | 28,759 | 53,526 | 74,461 | 21,896 | 52,565 |
Provisions for phased early retirement obligations consist of HHLA's obligations from the entitlements accrued during the benefi ciaries' working period, plus the supplementary amounts.
The securities holdings acquired in connection with phased early retirement contracts are classifi ed as plan assets under IAS 19. They were therefore offset against the phased early retirement obligations included in the provisions. As a result, the corresponding fi gure of € 5,639 thousand reduces the provisions reported.
The amount of the provision was determined using an interest rate of 3.0 % p. a. (previous year: 4.5 % p. a.).
During 2011, HHLA decided to roll out an employee stock purchase plan in 2012. € 1,612 thousand was added to the provision for bonuses and one-off payments in connection with this. For further information, please refer to Note 13. Aside from this, the fi gure largely consists of provisions for Executive Board members and other senior staff.
This takes into account risks from potential cases of damage or loss which go beyond the existing insurance cover. As of 31 December 2011, the risks thus recognised amounted to € 3,978 thousand.
The provisions for anniversaries relate to Group employees' contractual entitlement to anniversary gratuities. The amount recognised is determined by an actuarial opinion. A discount rate of 5.0 % p. a. (previous year: 4.5 % p. a.) was used for the calculation.
The following provisions schedule shows changes in other noncurrent and current provisions:
| in € thousand | 01.01.2011 | Additions | Accrued interest |
Used | Reversed | 31.12.2011 |
|---|---|---|---|---|---|---|
| Demolition obligations | 39,107 | 909 | 1,875 | 1,074 | 59 | 40,758 |
| Expected increases in rents | 6,634 | 6,981 | 0 | 362 | 0 | 13,253 |
| Phased early retirement | 11,669 | 5,965 | 695 | 8,002 | 644 | 9,683 |
| Bonuses and single payments | 6,709 | 7,937 | 0 | 6,141 | 369 | 8,136 |
| Insurance excesses | 2,594 | 3,042 | 0 | 1,490 | 168 | 3,978 |
| Anniversaries | 2,247 | 25 | 97 | 84 | 1 | 2,284 |
| Legal fees and litigation expenses | 1,070 | 52 | 0 | 170 | 0 | 952 |
| Other | 4,431 | 1,233 | 0 | 2,107 | 317 | 3,240 |
| 74,461 | 26,144 | 2,667 | 19,430 | 1,558 | 82,285 |
| in € thousand | 31.12.2011 | |||
|---|---|---|---|---|
| Total | Up to 1 year | 1 to 5 years | Over 5 years | |
| Liabilities from bank loans | 331,564 | 29,471 | 175,541 | 126,552 |
| Finance lease liabilities | 13,698 | 4,318 | 9,126 | 254 |
| Liabilities towards employees | 14,984 | 14,984 | 0 | 0 |
| Negative fair values of exchange and interest rate hedges | 2,926 | 1,958 | 968 | 0 |
| Other loans | 10,549 | 4,695 | 4,216 | 1,638 |
| Other fi nancial liabilities | 117,795 | 32,906 | 84,209 | 680 |
| 491,516 | 88,332 | 274,060 | 129,124 |
| in € thousand | 31.12.2010 | |||
|---|---|---|---|---|
| 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 |
| 478,748 | 91,136 | 290,913 | 96,699 |
Liabilities from bank loans include interest of € 3,391 thousand accrued up to the balance sheet date (previous year: € 3,343 thousand). In 2010, this fi gure also included bank overdraft facilities amounting to € 401 thousand and other fees of € 10 thousand.
Buildings, surfacing and movable non-current assets carried at € 44,036 thousand (previous year: € 46,841 thousand) have been pledged as collateral for interest-bearing loans. The collateral agree ments 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 and impairment losses.
The liabilities from fi nance leases amounting to € 13,698 thousand (previous year: € 15,280 thousand) represent the discounted value of future payments for movable non-current assets.
The liabilities towards employees consist primarily of wages, salaries and holiday entitlement.
Other fi nancial liabilities mainly comprise liabilities to shareholders outside the Group and reimbursements for customers. In the 2010 fi nancial year, profi t and loss transfer agreements were signed between the subsidiaries CTA and CTA Besitz on the one hand and HHCT on the other. In the profi t and loss transfer agreements, HHCT pledges to pay a fi nancial settlement to the abovementionedcompanies' minority shareholder for the duration of the agreement. Amounting to € 96,006 thousand, this settlement for minority shareholders is reported under other fi nancial liabilities. Please also refer to the section on Non-controlling Interests in Note 34.
The following table shows the terms of the liabilities from bank loans:
| Interest condition | Interest rate | Remaining fi xed interest period |
Currency | Nominal value | Carrying amount as of 31.12.2011 in € thousand |
|---|---|---|---|---|---|
| fi xed | 2.83 % | 2021 | € | 34,257 | 26,035 |
| fi xed | 2.76 –2.88 % | 2020 | € | 24,542 | 18,191 |
| fi xed | 3.66 % | 2019 | € | 20,000 | 20,000 |
| fi xed | 3.79 – 3.84 % | 2018 | € | 7,811 | 2,987 |
| fi xed | 5.67 % | 2017 | € | 3,579 | 1,074 |
| fi xed | 2.37– 5.61 % | 2016 | € | 90,000 | 75,000 |
| fi xed | 4.23 % | 2015 | € | 25,000 | 25,000 |
| fi xed | 5.15 – 5.47 % | 2012 | € | 78,000 | 42,013 |
| fl oating | fl oating + margin | 2012 | € | 139,644 | 114,844 |
| fl oating | fl oating + margin | 2012 | CZK | 113,900 | 3,029 |
| 328,173 |
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 | 31.12.2011 | 31.12.2010 | ||
|---|---|---|---|---|
| Carrying amount |
Fair value | Carrying amount |
Fair value | |
| Fixed interest bearing loans |
210,300 | 206,244 | 162,619 | 163,738 |
Interest rates of 2.6 to 3.9 % p. a. (previous year: 2.4 to 4.0 % 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 3.0 % 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 authorise the lender to demand additional collateral, a change to the conditions or the repayment of the loan. In order to prevent such steps, HHLA constantly monitors compliance with the covenants and, where required, implements measures to ensure that all conditions of the loan are met. As of the balance sheet date, the cor-
responding borrowings totalled € 67,496 thousand (previous year: € 81,076 thousand). The covenants were met at all agreed audit points throughout the reporting year.
The bank loans become due throughout the next 5 years and beyond as follows:
| Maturity | in € thousand |
|---|---|
| Up to 1 year | 26,080 |
| 1 year to 2 years | 71,971 |
| 2 years to 3 years | 27,971 |
| 3 years to 4 years | 53,068 |
| 4 years to 5 years | 22,531 |
| Over 5 years | 126,552 |
| 328,173 |
Trade liabilities amount to:
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Trade liabilities | 72,003 | 77,026 |
Trade liabilities from the fi nancial year are only owed to third parties. As in the previous year the total amount is due within one year.
Liabilities to related parties are made up as follows:
| in € thousand | 31.12.2011 | |||
|---|---|---|---|---|
| Total | Up to 1 year | 1 to 5 years | Over 5 years | |
| Liabilities to HGV | 65,759 | 65,759 | 0 | 0 |
| Liabilities to HPA (fi nance leases) | 93,675 | 88 | 722 | 92,865 |
| Other liabilities to related parties | 6,272 | 6,272 | 0 | 0 |
| 165,706 | 72,119 | 722 | 92,865 |
| 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 |
Liabilities to HGV of € 65,759 thousand (previous year: € 65,855 thousand) relate to a loan pertaining to the Real Estate subgroup which attracts standard market interest along with the corresponding interest portion.
The liabilities to HPA involve leased mega-ship berths at both Container Terminal Burchardkai and Container Terminal Tollerort in Hamburg. The amount recognised in the balance sheet is equivalent to the present value of the liabilities and is based on a lease term up to and including 2059 and 2061. See Note 44.
Other liabilities are made up as follows:
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Tax liabilities | 8,454 | 8,209 |
| Employer's accident liability insurance | 4,748 | 3,689 |
| Custom duties | 3,680 | 3,553 |
| Government grants | 2,079 | 10,588 |
| Port funds | 1,354 | 1,857 |
| Payments received on account | 1,282 | 1,321 |
| Social security liabilities | 425 | 1,458 |
| Other debts | 3,541 | 3,902 |
| 25,563 | 34,577 |
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 capitalised for the subsidised 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 € 35,691 thousand which were paid to HHLA in the period between 2001 and 2011. These subsidies have therefore already been deducted from the cost of purchasing the subsidised investments. The conditions for the subsidies include obligations to operate the subsidised equipment for a retention period of 5 to 20 years, observe certain operating criteria and provide the subsidising body with evidence for the use of the funds.
The HHLA Group did not receive any funds from public subsidies in the year under review. Funding of € 1,051 thousand was received in the previous 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 | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Income tax liabilities | 2,511 | 5,559 |
The cash fl ow statement is produced in line with IAS 7 Statement of Cash Flows. It shows changes in cash resources at the HHLA Group during the fi nancial year. The statement distinguishes between cash fl ows from operating, investing and fi nancing activities. Financial funds include cash in hand, cheques and bank balances with a remaining term of up to three months, receivables and/or liabilities relating to HGV and receivables and/or liabilities from cash pooling. They are recognised at nominal value. Currency 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 changes in non-cash items. Cash items such as interest and income taxes are also taken into account. At € 266,069 thousand, the cash infl ow from operating activities was higher than the previous year's € 206,949 thousand. This was mainly due to an increase in EBIT to € 207,015 thousand (previous year: € 192,908 thousand). Changes in equity and liability items not attributable to investing and fi nancing activities also played a role. Here, cash fl ow increased from € -4,718 thousand in 2010 to € 25,695 in 2011. This change resulted from the time-related adjustment of the recognition of payments for investments and for settlement obligations to shareholders with non-controlling interests.
The cash outfl ow from investing activities is calculated on a cash basis and/or using the direct method. It largely consists of the cash outfl ow from investments in non-current assets and short-term deposits. Cash infl ows from the disposal of non-current assets are also taken into account. In the reporting year, the cash outfl ow from investing activities amounted to € 137,971 thousand (previous year: € 36,261 thousand). The year-on-year increase in the cash outfl ow was largely ascribable to a payment for additions to assets which were not invoiced in the previous year and/or not recognised as a cash expense.
The balance of the cash infl ow from operating activities and the cash outfl ow from investing activities makes up the free cash fl ow. This indicates what cash resources are available for dividend payments or the redemption of existing loans. Free cash fl ow was down on the previous year because investment expenses were higher than the change in cash fl ow from operating activities. It dropped from € 170,688 thousand to € 128,098 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 € 78,155 thousand were used for dividend payments to shareholders and minority shareholders. This was € 16,891 thousand more than in the previous year. Funds were also used to repay (lease) liabilities. Unlike in the previous year, there was a cash infl ow of € 65,733 thousand from the uptake of bank loans in the year under review. This resulted in a cash outfl ow from fi nancing activities of € 45,870 thousand in the reporting year, while the cash outfl ow totalled € 95,168 thousand in the previous year.
In addition to the cash and cash equivalents entered in the balance sheet, fi nancial funds are made up as shown below as of the balance sheet date for the purposes of the cash fl ow statement:
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Cash and cash equivalents | 221,044 | 79,114 |
| Short-term deposits with a maturity of 4 – 6 months |
30,000 | 20,000 |
| Cash in hand and bank balances | 78,952 | 136,379 |
| Cash, cash equivalents and short-term deposits |
329,996 | 235,493 |
| Liabilities HGV | - 500 | - 600 |
| Receivables cash pool | 2 | 1 |
| Liabilities cash pool | - 4,695 | - 811 |
| Bank overdraft facilities | 0 | - 401 |
| Short-term deposits with a maturity of 4 – 6 months |
- 30,000 | - 20,000 |
| Financial funds at the end of the period | 294,803 | 213,682 |
Unlike in the previous year, short-term deposits with a maturity between four and six months are not recognised in fi nancial funds. The fi gures for the previous year have been restated accordingly.
Liabilities to HGV are overnight deposits available on demand. Funds were extended by a co-shareholder to one of the HHLA Group's joint ventures in Germany, which drove liabilities from cash pooling up to € 4,695 thousand.
HHLA Group's segment report is prepared in accordance with the provisions of IFRS 8 Operating Segments and requires reporting on the basis of the internal reports to the Executive Board for the purpose of controlling the commercial activities. The segment performance indicator used is the internationally customary key fi gure EBIT (earnings before interest and taxes), which serves to measure the success in each segment and therefore aids the internal control function. In the 2010 fi nancial year, internal reporting was extended to include EBIT from continuing activities. This excludes the result of non-current assets held for sale. For 2010, this was the result posted by CTL Container Terminal Lübeck GmbH, Lübeck (CTL). For reasons of immateriality, it was not listed separately for the 2011 fi nancial year.
The accounting and valuation principles applied for internal reporting comply with the principles applied by the HHLA Group described in Note 6 "Accounting and Valuation Principles" in this annual report.
The segment information is reported on the basis of the internal control function, which is consistent with external reporting and continues to be classifi ed in accordance with the distinct activities of the HHLA Group's business segments. These are organised and managed autonomously in accordance with the type of services being offered.
The HHLA Group operates in the following four segments:
This segment pools the Group's container handling operations.
The Intermodal segment provides a comprehensive seaporthinterland rail and truck network.
The Logistics segment encompasses a wide range of contract and warehousing logistics, consulting and specialist handling services.
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 historical Speicherstadt warehouse district and the fi sh market area on the northern banks of the river Elbe.
The Holding/Other division used for segment reporting does not represent an independent business segment as defi ned by the IFRS standards. However, it has been allocated to the segments within the subgroup Port Logistics in order to provide a complete and clear picture.
Due to the structure of the HHLA Group, it is necessary to issue a large number of invoices for inter-segmental services. These predominantly relate to the use of real estate, IT services, administrative services and staff provided by the holding company. Wherever possible, these services are valued at market prices. If it is impossible to make a direct comparison with market prices, benchmarks are used to ensure market conformity. The charges for staff provided by the holding company are usually based on the actual cost.
The following table gives the details of the reconciliation of the segment variables with the corresponding Group variables:
The reconciliation of the segment variable EBIT with consolidated earnings before taxes (EBT) incorporates transactions between the segments and the subgroups for which consolidation is mandatory, along with the proportion of companies accounted for using the equity method, net interest income and the other fi nancial result.
| in € thousand | 2011 | 2010 |
|---|---|---|
| Total segment earnings (EBIT) | 204,525 | 190,279 |
| Elimination of business relations between segments and subgroups |
2,490 | 2,629 |
| Group earnings (EBIT) | 207,015 | 192,908 |
| Earnings from associates accounted for using the equity method |
335 | 208 |
| Net interest | - 32,726 | - 34,934 |
| Other fi nancial result | 217 | 336 |
| Earnings before tax (EBT) | 174,841 | 158,518 |
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 | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Segment assets | 1,661,703 | 1,635,565 |
| Elimination of business relations between segments and subgroups |
- 639,714 | - 631,782 |
| Current assets before consolidation | 429,514 | 417,481 |
| Financial assets | 4,199 | 4,642 |
| Deferred tax | 22,243 | 32,766 |
| Income tax receivables | 3,591 | 20,972 |
| Cash, cash equivalents and short-term deposits |
329,996 | 235,493 |
| Group assets | 1,811,532 | 1,715,137 |
The reconciliation with Group investments totalling € -1,873 thousand (previous year: € 85 thousand) contains the elimination of internal invoices for services to generate intangible assets and the inter-segmental sale of property, plant and equipment.
In relation to the reconciliation of amortisation and depreciation amounting to € -3,954 thousand (previous year: € -2,149 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 € 102 thousand (previous year: € 206 thousand) contains items for which consolidation is mandatory between the segments and the subgroups.
| Germany | EU | Outside EU | Total | Consolidation | Group | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| in € thousand | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 |
| Segment revenues | 969,422 | 841,398 200,050 175,296 | 47,800 | 51,122 1,217,272 1,067,816 | 0 | 0 1,217,272 1,067,816 | ||||||
| Non-current segment assets |
1,026,770 1,039,859 | 196,897 182,615 | 30,742 | 31,089 1,254,409 1,253,563 557,123 461,574 1,811,532 1,715,137 | ||||||||
| Investment in non-current |
||||||||||||
| segment assets | 95,150 | 152,017 | 31,315 | 20,116 | 2,285 | 1,706 | 128,750 | 173,839 | 0 | 0 | 128,750 | 173,839 |
For the information by region, the segment revenue and disclosures on non-current segment assets are detailed in accordance with the affi liates' respective locations insofar as they are not attributable to operations. 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 the fi nancial years 2010 and 2011, HHLA signed leases for a total of three newly completed quay walls with a related party, HPA. Based on the current negotiations, HHLA assumes that these assets can be leased up until 2061. The negotiations have not yet been completed. Following completion of a present value test, the leases are classifi ed as fi nance lease obligations according to IAS 17. As a result, minimum lease payments – including anticipated increases in rent payment rates – totalling € 233,709 thousand must be taken into account.
The following table shows the reconciliation between future minimum lease payments from fi nance leases and hire-purchase agree ments and their present value:
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Within one year | 8,801 | 7,523 |
| Between one and fi ve years | 26,975 | 22,061 |
| Over fi ve years | 212,441 | 155,600 |
| Total minimum lease payments | 248,217 | 185,184 |
| Within one year | 4,406 | 3,911 |
| Between one and fi ve years | 9,848 | 11,334 |
| Over fi ve years | 93,119 | 65,834 |
| Present value of minimum lease payments |
107,373 | 81,079 |
| Interest expenses from discounting | 140,844 | 104,105 |
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 expire between 2025 and 2037. Under the terms of the contracts the lease payments are generally reviewed every fi ve years on the basis of price developments in relevant competing ports or based on appropriate rental indices. Provisions are made for the anticipated increases in lease payments. Leasing expenses for the space in the Speicherstadt historical warehouse district are partly linked to the development of Group income from subletting these buildings.
Without the prior approval of the lessor, the leased areas and the buildings on them belonging to HHLA may not be sold or let. Major changes to the terms of subletting agreements also require the approval of the lessor.
There are also leases relating to real estate and movable property at the container terminal in Odessa, Ukraine. On the whole, the rents payable for this are fi xed and will only change during the course of the agreement as a result of future infl ation. The company will not have purchase options at the end of the lease agreements. The respective lease agreements have terms of between 5 and 34 years.
The Group also has leasing agreements for various motor vehicles and items of technical equipment. These leases have an average duration of one to seven years and generally do not include renewal options. The lessee takes on no obligations when signing these leases.
At the balance sheet date the following minimum lease payment obligations exist under uncancellable operating leases:
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Within one year | 37,265 | 37,373 |
| Between one and fi ve years | 138,161 | 127,883 |
| Over fi ve years | 923,131 | 901,010 |
| 1,098,558 | 1,066,266 |
In the fi nancial year, expenses of € 42,554 thousand (previous year: € 41,342 thousand) were incurred for leases, of which € 1,621 thousand (previous year: € 1,622 thousand) relates to conditional rental payments.
The Group has signed leasing agreements for letting its investment properties on a commercial basis. The investment properties consist of offi ce space and facilities not used by the Group. These leases have remaining uncancellable lease terms of between one and 16 years. After the end of the uncancellable lease period some contracts give tenants the option of extending the lease for a period of between two and up to a maximum of three times fi ve years. Some leases contain a clause under which the rent can be increased in line with market conditions.
The following table shows the minimum lease payments anticipated for the years ahead on the basis of uncancellable operating leases for investment property at the balance sheet date:
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Within one year | 31,028 | 25,398 |
| Between one and fi ve years | 71,603 | 67,045 |
| Over fi ve years | 47,097 | 44,591 |
| 149,728 | 137,034 |
In the fi nancial year income of € 47,942 thousand (previous year: € 49,842 thousand) was earned from letting property, plant and equipment and investment property.
No provisions were formed for the following contingent liabilities because it was deemed highly unlikely that they would be utilised.
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Guarantees | 4,038 | 3,599 |
| Comfort letters | 1,850 | 1,850 |
| 5,888 | 5,449 |
Of these guarantees, proportionately consolidated joint ventures account for € 553 thousand (previous year: € 365 thousand).
The nominal values of other fi nancial obligations are made up as follows on the balance sheet date:
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Outstanding purchase commitments | 92,977 | 51,112 |
| Obligations arising from bills of exchange | 0 | 6,968 |
| Miscellaneous other obligations | 1,160,933 | 1,087,004 |
| 1,253,910 | 1,145,084 |
Of the obligations from outstanding purchase commitments, € 81,393 thousand (previous year: € 44,220 thousand) is attributable to capitalisation of property, plant and equipment.
Miscellaneous other obligations contain commitments from operating leases amounting to € 1,098,558 thousand (previous year: € 1,066,266 thousand), see also Note 44. Of the total reported for miscellaneous other obligations, proportionately consoli dated joint ventures account for € 64,063 thousand (previous year: € 65,854 thousand).
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 very good credit ratings. HHLA also makes use of external ratings to assess its counterparties' creditworthiness. The Group does not hold derivative fi nancial instruments for speculative purposes.
As a result of its borrowing the Group is exposed to an interest rate risk, which principally stems from medium to long-term borrowing at fl oating rates of interest.
Managing the Group's interest expenses involves a combination of fi xed and fl oating-rate debt, depending on the market. It is Group policy to arrange the majority of interest-bearing debt at fi xed rates of interest, either by agreeing fi xed rates with the lenders or by taking out interest rate swaps. The Group also partly limits its interest rate risk for the residual fl oating-rate debt by the use of interest rate caps.
At the balance sheet date, 75.0 % (previous year: 75.2 %) of the Group's borrowing was at fi xed interest rates, including an amount of € 35,947 thousand (previous year: € 59,192 thousand) covered by interest rate swaps. Interest rate caps were also in place for a further € 3,824 thousand (previous year: € 8,236 thousand).
HHLA's interest-bearing receivables and liabilities are mainly at fi xed interest rates. These fi nancial instruments are not held at fair value and are therefore not subject to market price risks on the balance sheet.
Market price risks can, however, affect securities and equity investments in particular. Due to the minor scope of these instruments, the risk is deemed insignifi cant.
A change in the variable interest rate affects the interest expenses arising from fl oating-rate loans, the interest income from overnight deposits and time deposit investments, and the income from interest rate hedges and their fair value.
If the variable interest rate had been 0.5 percentage points higher as of the balance sheet date, interest expenses arising from fl oating-rate loans would have been € 589 thousand p. a. higher, interest income from overnight deposits and time deposit investments would have been € 1,647 thousand p. a. higher, and income from interest rate hedges would have been € 180 thousand p. a. higher. The fair value of the interest rate hedges would have risen by € 586 thousand. Of this, € 417 thousand would be recorded directly in equity and € 169 thousand would be recognised in the income statement, whose result would increase by a total of € 1,407 thousand before tax.
Due to its investments in countries outside the eurozone, changes in exchange rates can affect the balance sheet.
Foreign currency risks on individual transactions, such as the sale of a shareholding for example, are hedged by currency futures or currency options if a market analysis requires it. The hedging transactions are in the same currency as the hedged item. The Group only concludes currency futures contracts when specifi c claims or obligations exist.
On the balance sheet date, the Group held currency hedging instruments with a nominal volume of € 67 thousand and a market value of € -5 thousand.
Revenue in the HHLA Group is predominantly invoiced in euros or in the national currencies of the European Group companies. Investments in these countries are largely transacted in euros. There is currently no signifi cant foreign currency risk from the functional currency.
SC 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 or on 31 December 2010.
In addition to the market risks mentioned, there are also fi nancial risks in the form of credit and liquidity risks.
The Group only maintains customer relationships on a credit basis with recognised, creditworthy third parties. Clients who wish to complete transactions with the Group on a credit basis are subject to a credit scoring procedure. Receivables are also monitored on an ongoing basis and impairment allowances are made if risks are identifi ed, such that the Group is not exposed to any additional signifi cant default risks on receivables. The maximum default risk for the trade receivables and other fi nancial receivables is the oretically the carrying amount for the individual receivable. HHLA has also had loan loss insurance since 2011 to minimise default risks. This covers key outstanding receivables as of the balance sheet date.
The term structure of trade receivables is as follows:
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Receivables not due for payment and not written down |
114,959 | 90,617 |
| Overdue receivables not written down | 36,812 | 35,899 |
| thereof up to 30 days | 28,994 | 29,932 |
| thereof 31 to 90 days | 6,067 | 5,285 |
| thereof 91 days to 1 year | 1,406 | 566 |
| thereof over 1 year | 345 | 116 |
| 151,771 | 126,516 |
Value adjustments on trade receivables developed as follows:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Impairment as of 01.01. | 2,732 | 1,755 |
| Additions (impairment expenses) | 2,360 | 2,202 |
| Used | - 2,166 | - 984 |
| Reversals | - 422 | - 241 |
| Impairment as of 31.12. | 2,504 | 2,732 |
The default risk in the case of derivative fi nancial instruments and cash, cash equivalents and short-term deposits is, in theory, that of counterparty default and is therefore equivalent to the carrying amounts of the individual fi nancial instruments.
The risk of default can be considered to be very low, since the Group as a rule only conducts derivative fi nancial transactions and liquid investments with counterparties with very good credit ratings.
In addition, credit risks may arise from an availment from the contingencies listed in Note 45.
The Group guarantees suffi cient liquidity at all times with the help of medium-term liquidity planning, by diversifying the maturities of loans and fi nance leases, and by means of existing lines of credit and funding commitments. If covenants have been agreed for individual loans, they are monitored on an ongoing basis to make sure they are being complied with. HHLA will introduce measures it deems necessary to ensure that the covenants are met.
For details on the repayment of the HHLA Group's loans, the liabilities towards employees, the fi nance lease liabilities and other fi nancial liabilities, please refer to the table of residual maturities for fi nancial liabilities in Note 37.
The following outfl ows of liquidity are expected for future interest payments:
| 31.12.2011 | |||||
|---|---|---|---|---|---|
| in € thousand | Total | Up to 1 year |
1 to 5 years |
Over 5 years |
|
| Outfl ow of liquidity for future interest payments on fi xed-interest loans |
45,520 | 6,598 | 19,161 | 19,761 | |
| Outfl ow of liquidity for future interest payments on fl oating-rate loans |
7,506 | 2,892 | 4,135 | 479 | |
| 53,026 | 9,490 | 23,296 | 20,240 |
| 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 | 2,519 | 5,136 | 641 | |
| 55,273 | 9,659 | 27,079 | 18,535 |
It is anticipated that the interest rate swaps in place on the balance sheet date will result in the following interest outfl ows in the future. In this context, an interest outfl ow is considered to be the difference between the amount to be paid and the amount to be received. The interest rate caps do not result in interest outfl ows.
| in € thousand | 31.12.2011 | 31.12.2010 |
|---|---|---|
| Within one year | 781 | 1,149 |
| Between one and fi ve years | 1,902 | 2,841 |
| Over fi ve years | 123 | 450 |
| 2,806 | 4,440 |
Fair Value
With the exception of the non-current fi nancial liabilities described in Note 37, 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:
| in € thousand | Valuation using IAS 39 | |||||
|---|---|---|---|---|---|---|
| Loans and receivables |
Held for trading |
Available-for-sale fi nancial assets |
||||
| Amortised cost | Fair value | Amortised cost | ||||
| Financial assets | 3,845 | 3,323 | 1,918 | 9,086 | ||
| Trade receivables | 151,771 | 151,771 | ||||
| Receivables from related parties | 3,756 | 3,756 | ||||
| Other fi nancial receivables | 2,428 | 1 | 2,429 | |||
| Cash, cash equivalents and short-term deposits | 329,996 | 329,996 | ||||
| 491,796 | 1 | 3,323 | 1,918 |
| in € thousand | Valuation using IAS 39 | Valuation using other IAS |
Valuation using IAS 32 |
Balance sheet |
||
|---|---|---|---|---|---|---|
| Held for trading |
Held as effective hedging instruments |
Other fi nancial liabilities |
||||
| Fair value | Fair value | Amortised cost | Amortised cost | Present value | ||
| Non-current and current fi nancial liabilities |
1,002 | 1,924 | 378,886 | 13,698 | 96,006 | 491,516 |
| Accounts payable | 72,003 | 72,003 | ||||
| Liabilities towards related parties |
165,706 | 165,706 | ||||
| 1,002 | 1,924 | 450,889 | 179,404 | 96,006 |
| in € thousand | Balance Valuation using IAS 39 |
|||||
|---|---|---|---|---|---|---|
| Loans and receivables |
Held for trading |
Available-for-sale fi nancial assets |
||||
| Amortised cost | Fair value | Amortised cost | ||||
| Financial assets | 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, cash equivalents and short-term deposits | 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 | Amortised cost | Amortised cost | |||
| 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 |
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-ups of € 9 thousand (previous year: write-downs of € 1 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 instrumentspecifi c market parameters. They are therefore assigned to level 2 in accordance with IFRS 7.27(a). The market values are calculated with present value and option pricing models to determine the fair value. Whenever possible, these models use the relevant market prices and interest rates observed at the balance sheet date, obtained from recognised sources, as input parameters. These models use the relevant market prices and interest rates observed at the balance sheet date, obtained from recognised sources, as input parameters.
In the reporting year, gains of € 228 thousand (previous year: € 511 thousand) were recognised in the income statement on fi nancial assets and/or liabilities held at fair value through profi t and loss. These primarily relate to interest rate hedges with no effective hedging relationship as per IAS 39.
In the reporting year, changes of € -418 thousand (previous year: € -220 thousand) in the fair value of fi nancial instruments designated as hedging instruments (interest rate swaps) were recognised 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 Note 34. 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 2011 to 2014. This is calculated based on the assumptions used for the Group's plans; estimates are adjusted annually. As a result of the adjustments, earnings rose by € 1,568 thousand. This is included in fi nancial income, see Note 16.
Derivative fi nancial instruments are used in the HHLA Group to reduce interest rate risks and, to a minor extent, to reduce currency and commodity price risks. The fi nancial derivatives held in the Consolidated Financial Statements are carried at fair value. Resulting gains and losses are recognised through profi t and loss in the fi nancial result unless the derivative fi nancial instrument is part of a designated cash fl ow hedging relationship. The effective portion of unrealised gains and losses on cash fl ow hedges is recognised in equity without effect on profi t and loss.
The following table shows the terms and maturities of the interest rate derivatives held on the balance sheet date:
The remaining maturity of the interest rate derivatives is between twelve months and seven years.
The fair values of derivatives are determined by reference to the market prices posted by counterparties.
The expenses and income from the hedged items included in the fi nancial result and the underlying derivatives are shown separately. Expenses and income are not set off against one another.
Of the interest rate swaps disclosed, as of the balance sheet date fi nancial instruments covering an amount of € 22,036 thousand (previous year: € 24,940 thousand) with a market value of € -1,924 thousand (previous year: € -1,506 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 seven years.
| in € thousand | Fixed interest rate | Floating rate | Amount covered Market values 31.12.2011 Market values 31.12.2010 |
||||
|---|---|---|---|---|---|---|---|
| 31.12.2011 | positive | negative | positive | negative | |||
| Interest rate swaps | 2.44 % to 4.33 % | 1m to 6m EURIBOR | 35,947 | 0 | - 2,921 | 0 | - 2,743 |
| Interest rate caps | 3.50 % | 6m EURIBOR | 3,824 | 1 | 0 | 12 | 0 |
| 39,771 | 1 | - 2,921 | 12 | - 2,743 |
The amount covered by interest rate swaps is adjusted in line with the antici pated repayment of the loan over the term of the derivative.
In the fi nancial year under review, losses of € 418 thousand (previous year: € 220 thousand) on fi nancial instruments used to hedge cash fl ows were recognised directly in equity.
IAS 24 defi nes related parties as companies and individuals which directly or indirectly control or exert signifi cant infl uence over the HHLA Group or over which the HHLA Group has control, joint control or signifi cant infl uence.
The shareholders HGV Hamburger Gesellschaft für Vermögensund Beteiligungsmanagement mbH, Hamburg (HGV), and HHLA Beteiligungsgesellschaft mbH, Hamburg, as well as their shareholder, the Free and Hanseatic City of Hamburg (FHH), companies over which the Free and Hanseatic City of Hamburg has control or signifi cant infl uence, the members of HHLA's Executive and Supervisory Boards, and the subsidiaries, associates and joint ventures in the HHLA Group are therefore defi ned as related parties. HGV is the fi nal parent company of HHLA which publishes Consolidated Financial Statements. HHLA is the parent company of the HHLA Group.
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 | 2011 | 2010 | 2011 | 2010 | 31.12.2011 | 31.12.2010 | 31.12.2011 | 31.12.2010 |
| Companies with control over the Group |
909 | 7,645 | 4,519 | 4,413 | 0 | 0 | 65,759 | 65,855 |
| Non-consolidated subsidiaries | 341 | 19 | 2,760 | 0 | 903 | 259 | 4,085 | 660 |
| Joint ventures | 9,852 | 7,763 | 5,423 | 4,088 | 1,388 | 363 | 654 | 96 |
| Associated companies | 197 | 284 | 3 | 0 | 91 | 401 | 0 | 479 |
| Other transactions with related parties |
19,602 | 1,337 | 28,521 | 27,298 | 1,374 | 1,681 | 95,208 | 66,643 |
| 30,901 | 17,048 | 41,226 | 35,799 | 3,756 | 2,704 | 165,706 | 133,733 |
Liabilities towards related parties with control over the Group include a loan of € 65,000 thousand (previous year: € 65,000 thousand) to the Real Estate subgroup, which is granted by HGV for an indefi nite period and attracts interest at a rate of 4.50 % p. a. (previous year: 4.50 % 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 € 500 thousand (previous year: € 600 thousand). HHLA's receivables accrued interest at a rate of between 0.40 and 2.08 % p. a. (previous year: between 0.38 and 0.93 % p. a.) in the reporting year. The interest rates for HHLA's liabilities were between 0.50 and 2.18 % p. a. (previous year: between 0.48 and 1.03 % p. a.).
Obligations from fi nance leases amounting to € 93,676 thousand (previous year: € 65,799 thousand) for the lease of three mega-ship berths from HPA are included in other transactions with related parties.
Income from other transactions mainly include a compensa tion payment from HPA of € 15,000 thousand for the loss of leased areas in the Port of Hamburg. More details can be found in Note 3, "Company Acquisitions, Disposal and Other Changes to the Group of Consolidated Companies".
Expenses with related parties mostly include rent for land and quay walls in the port and the Speicherstadt historical warehouse district.
Furthermore, HGV and the Free and Hanseatic City of Hamburg as parties related to HHLA have provided comfort letters and guarantees for loans granted to companies in the HHLA Group to Kreditanstalt für Wiederaufbau, Frankfurt am Main, and the European Investment Bank, Luxembourg. The nominal amount of the bank loan is € 248,000 thousand (previous year: € 188,000 thousand), of which around € 201,763 thousand plus interest was still outstanding on the balance sheet date (previous year: € 150,026 thousand).
With effect from 18 October 2007, a partial loss compensation agreement was concluded between HHLA and HGV. HGV hereby undertakes to assume each annual defi cit posted by the HHLA subgroup Real Estate as per commercial law during the term of the agreement. This applies insofar as the defi cit is not compensated for by transferring amounts from retained earnings, other revenue reserves or the capital reserve which were carried forward as profi t or transferred to these reserves during the term of the contract in accordance with Section 272 (2) (4) of the German Commercial Code (HGB).
Expenses and income from related parties are on standard market terms. The amounts outstanding at year-end are not secured and – with the exception of overnight funds in clearing and the loan liability to HGV – do not attract interest.
No loans or comparable benefi ts were granted to the members of the Executive and Supervisory Boards in the reporting year or in the previous year.
The following table lists subsidiaries, associated companies and joint ventures, plus HHLA's other participating interests:
| Company name and headquarters | Share of capital | Equity | Annual profi t | ||
|---|---|---|---|---|---|
| direct | indirect | ||||
| % | % | € thousand | year | € thousand | |
| Port Logistics | |||||
| Segment Container | |||||
| HHLA Container Terminals Gesellschaft mit beschränkter Haftung, Hamburg 1, 2, 3 | 100.0 | 111,449 | 2011 | 0 | |
| HCCR Hamburger Container- und Chassis-Reparatur-Gesellschaft mbH, Hamburg 1, 2, 3 | 100.0 | 1,942 | 2011 | 0 | |
| LZU Leercontainer Zentrum Unikai GmbH, Hamburg 1, 7 | 65.0 | 695 | 2011 | 7,167 | |
| HHLA Container Terminal Tollerort GmbH, Hamburg 1, 2, 3 | 100.0 | 34,741 | 2011 | 0 | |
| HHLA Rosshafen Terminal GmbH, Hamburg 1 | 100.0 | 19,024 | 2011 | 1,596 | |
| UNIKAI Hafenbetrieb GmbH, Hamburg 1, 2, 3 | 100.0 | 3,640 | 2011 | 0 | |
| HHLA Container-Terminal Altenwerder GmbH, Hamburg 1, 2, 3 | 74.9 | 74,072 | 2011 | 0 | |
| SCA Service Center Altenwerder GmbH, Hamburg 1, 2, 3 | 74.9 | 601 | 2011 | 0 | |
| Kombi-Transeuropa Terminal Hamburg GmbH, Hamburg 4 | 37.5 | 180 | 2011 | 69 | |
| HHLA CTA Besitzgesellschaft mbH, Hamburg 1, 2, 3 | 74.9 | 6,360 | 2011 | 0 | |
| CuxPort GmbH, Cuxhaven 6 | 25.1 | 6,842 | 2011 | 1,335 | |
| FLZ Hamburger Feeder Logistik Zentrale GmbH, Hamburg 4 | 66.0 | 25 | 2011 | 0 | |
| HHLA Container Terminal Burchardkai GmbH, Hamburg 1, 2, 3 | 100.0 | 76,961 | 2011 | 0 | |
| Service Center Burchardkai GmbH, Hamburg 1, 2, 3 | 100.0 | 26 | 2011 | 0 | |
| Cuxcargo Hafenbetrieb GmbH & Co. KG, Cuxhaven 5 | 50.0 | - 2 | 2011 | 7 | |
| Cuxcargo Hafenbetrieb Verwaltungs-GmbH, Cuxhaven 5 | 50.0 | 16 | 2011 | - 1 | |
| DHU Gesellschaft Datenverarbeitung Hamburger Umschlagsbetriebe mbH, Hamburg 5 | 23.0 | 17.4 | 1,579 | 2011 | 812 |
| SC HPC Ukraina, Odessa/Ukraine 1 | 100.0 | 60,773 | 2011 | 9,840 | |
| Segment Intermodal | |||||
| HHLA Intermodal GmbH, Hamburg 1, 2, 3 | 100.0 | 29,043 | 2011 | 0 | |
| CTD Container-Transport-Dienst GmbH, Hamburg 1, 2, 3 | 100.0 | 1,256 | 2011 | 0 | |
| CIT Container Inland Trucking GmbH, Hamburg 5 | 50.0 | 23 | 2010 | - 2 | |
| HHLA Intermodal Polska Sp. z o.o., Warsaw/Poland 1 | 100.0 | 5,876 | 2011 | - 858 | |
| HHLA Intermodal Polska Terminals Sp. z o.o., Warsaw/Poland 1, 5 | 100.0 | 6 | 2011 | - 5 | |
| METRANS a.s., Prague/Czech Republic 1 | 51.5 | 118,054 | 2011 | 21,297 | |
| METRANS (Deutschland) GmbH, Hamburg 1, 5 | 51.5 | 147 | 2011 | 1 | |
| METRANS (Danubia) a.s., Dunajská Streda/Slovakia 1 | 51.5 | 19,189 | 2011 | 3,238 | |
| METRANS (Danubia) Kft., Győr/Hungary 1, 5 | 51.5 | - 234 | 2011 | - 243 | |
| METRANS Adria D.O.O., Koper/Slovenia 1, 5 | 51.5 | 407 | 2011 | 16 | |
| METRANS D.O.O., Rijeka/Kroatia 1, 5 | 51.5 | - 8 | 2011 | - 4 | |
| METRANS DYKO Rail Repair Shop s.r.o., Prague/Czech Republic | |||||
| (formerly: DYKO, spol. s r.o., Kolin/Czech Republic) 1 | 51.5 | 3,008 | 2011 | 333 | |
| METRANS Rail s.r.o., Prague/Czech Republic (formerly: RAILTRANSPORT s.r.o., Prague/Czech Republic) 1 |
41.2 | 674 | 2011 | 320 | |
| METRANS Rail (Deutschland) GmbH, Kirnitzschtal (formerly: Transport-Schienen-Dienst GmbH, Kirnitzschtal) 1, 5 |
41.2 | 109 | 2011 | 78 |
| Company name and headquarters | Share of capital | Equity | Annual profi t | ||
|---|---|---|---|---|---|
| direct | indirect | ||||
| % | % | € thousand | year | € thousand | |
| IBZ Pankrác a.s., Nýřany/Czech Republic 1, 5 | 48.1 | 209 | 2011 | 7 | |
| TFG Verwaltungs GmbH, Frankfurt am Main 5 | 50.0 | 127 | 2011 | 0 | |
| TFG Transfracht Internationale Gesellschaft für kombinierten Güterverkehr mbH & Co. KG, Frankfurt am Main 4 |
50.0 | - 9,365 | 2011 | - 8,623 | |
| POLZUG Intermodal GmbH, Hamburg 4 | 33.3 | 5,137 | 2011 | - 1,591 | |
| POLZUG Intermodal Polska sp. z o.o., Warsaw/Poland 4 | 33.3 | 2,845 | 2011 | -1,390 | |
| POLZUG INTERMODAL LLC, Poti/Georgia 5 | 24.9 | 367 | 2010 | 253 | |
| IPN Inland Port Network Verwaltungsgesellschaft mbH, Hamburg 5 | 50.0 | 27 | 2011 | 4 | |
| IPN Inland Port Network GmbH & Co. KG, Hamburg 5 | 50.0 | 40 | 2011 | -196 | |
| Segment Logistics | |||||
| HPC Hamburg Port Consulting GmbH, Hamburg 1, 2, 3 | 100.0 | 1,367 | 2011 | 0 | |
| HPTI Hamburg Port Training Institute GmbH, Hamburg 1, 2, 3 | 100.0 | 102 | 2011 | 0 | |
| Uniconsult Universal Transport Consulting Gesellschaft mit beschränkter Haftung, Hamburg 1, 2, 3 | 100.0 | 100 | 2011 | 0 | |
| UNIKAI Lagerei- und Speditionsgesellschaft mbH, Hamburg 1 | 51.0 | 3,893 | 2011 | 575 | |
| ARS-UNIKAI GmbH, Hamburg 4 | 25.5 | 341 | 2011 | 35 | |
| HHLA Frucht- und Kühl-Zentrum GmbH, Hamburg 1 | 51.0 | 10,295 | 2011 | -3,188 | |
| Ulrich Stein Gesellschaft mit beschränkter Haftung, Hamburg 1 | 51.0 | 532 | 2011 | 368 | |
| HHLA Logistics GmbH, Hamburg 1, 2, 3 | 100.0 | - 1,237 | 2011 | 0 | |
| HHLA Logistics Altenwerder GmbH & Co. KG, Hamburg 1 | 100.0 | 578 | 2011 | - 649 | |
| HHLA Logistics Altenwerder Verwaltungsgesellschaft mbH, Hamburg 1, 5 | 100.0 | 47 | 2011 | 0 | |
| Hansaport Hafenbetriebsgesellschaft mit beschränkter Haftung, Hamburg 3, 4 | 49.0 | n.a. | 2011 | n.a. | |
| HCC Hanseatic Cruise Centers GmbH, Hamburg 1 | 51.0 | 1,004 | 2011 | 333 | |
| Holding/Other | |||||
| GHL Zweite Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung mbH, Hamburg 1, 2, 3 | 100.0 | 3,609 | 2011 | 0 | |
| HHLA-Personal-Service-Gesellschaft mit beschränkter Haftung, Hamburg 1, 2, 3 | 100.0 | 45 | 2011 | 0 | |
| HCCR Erste Beteiligungsgesellschaft mbH, Hamburg 1, 5 | 100.0 | 33 | 2011 | 0 | |
| Real Estate | |||||
| Segment Real Estate | |||||
| Fischmarkt Hamburg-Altona Gesellschaft mit beschränkter Haftung, Hamburg 1, 2, 3 | 100.0 | 4,518 | 2011 | 0 | |
| GHL Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung Block D mbH, Hamburg 1, 2, 3 | 100.0 | 8,184 | 2011 | 0 | |
| GHL Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung Bei St. Annen mbH, Hamburg 1 |
100.0 | 11,196 | 2011 | 734 |
Controlled companies.
2 Profi t and loss transfer agreements were held with these companies in 2011.
The disclosure simplifi cation provided for in Section 264 (3) of the German Commercial Code was used for these companies.
4 Proportionately consolidated companies.
5 Due to the minor importance of these companies, they were not recognised using the equity method in the consolidated fi nancial statements
or as associated companies, but rather as equity investments.
6 Companies recognised using the equity method.
Reclassifi ed from group of consolidated companies in 2011 to non-current fi nancial assets.
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. Apart from the details provided below on the Executive Board and Supervisory Board, there were no notifi able transactions with related parties or their close relatives in the 2011 fi nancial year.
On 8 December 2011, the Supervisory Board of HHLA and Dr. SebastianJürgens agreed to terminate their working relationship by mutual consent effective 31 December 2011. This decision was taken following a difference of opinion concerning the Group's strategic orientation, especially in the Intermodal segment. Mr. Klaus-Dieter Peters, Chairman of the Executive Board, will assume Dr. Jürgens' duties for the time being.
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 PersonnelCommittee considers HHLA's size and area of opera tions, its commercial and fi nancial position and the amount and structure of Executive Board remuneration in comparable com panies. The responsibilities and services provided by each Exe cutive Board member are also taken into account. Following the intro duction of the German Act on the Appropriateness of Manage ment Board Remuneration (VorstAG), the Supervisory Board approved a new remuneration system at its meeting in December 2010. This system has been in use since 1 January 2011.
The remuneration of Executive Board members is made up of a non-performance-related basic annual salary, a performancerelated bonus and other benefi ts. The performance-related bonus is usually set using a three-year assessment period as a basis. For the 2011 fi nancial year – the fi rst year using the new remuneration system – the previous two fi nancial years will be used instead. The calculation is based on the average earnings before interest and taxes (EBIT) for the last three years (before additions to pension provisions and less any extraordinary income from the disposal of real estate and companies), the average return on capital employed (ROCE) and the achievement of targets relating to environmental issues (reduction of the carbon footprint of each container handled and transported) and social issues (broken down into training and continuing professional development, health and employment) over the same period. Target ranges were set for each of the components used in the calculation for the period from 2011 to 2013. Achieving these targets triggers the payment of the relevant bonus. When making these calculations, roughly equal weight is given to EBIT on the one hand and the above-mentioned sustainability components on the other. The variable remuneration is capped at 150 % of the basic salary. It is paid out once the annual fi nancial statements have been approved.
In addition to this, there is a pension commitment for each ExecutiveBoard member. Pensions are paid to former Executive Board members either after fi ve or eight years' service on the Executive Board, if they leave the Board for reasons unrelated to the Board member, or as a result of incapacity or due to reaching 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 55 to 60 % of the pension entitlement and children receive an orphan's allowance of 12 to 20 % of the pension.
Should the pension entitlement be suspended or no longer exist upon leaving the Executive Board, transitional pay will apply for a limited period based on the annual basic salary. This clause is not included in all Executive Board members' service contracts.
The service contracts valid during the year under review include a change of control clause. This stipulates that Executive Board members will receive their fi nancial entitlement for the remaining duration of their contract, discounted by 2 % p. a. and discharged in a one-off payment. This does not affect their pension entitlements.
Please see the remuneration report for details of the remuneration paid to individual Board members.
The following remuneration was paid to the members of the Executive Board:
| in € thousand | 2011 | 2010 |
|---|---|---|
| Non-performance-related remuneration | ||
| Basic salary | 1,765 | 1,450 |
| Other benefi ts | 279 | 53 |
| Performance-related remuneration | 2,009 | 1,051 |
| 4,053 | 2,554 |
Benefi ts comprise non-monetary compensation – primarily the use of company cars – as well as pension contributions paid out to former Executive Board members in the reporting year.
After leaving the Executive Board on 31 December 2011, Dr. Jürgens will receive his contractually agreed basic salary until 31 December 2013 at the latest. The sum of € 325,000 has been stipulated as the basis for calculating his performance-related pay. If the employment relationship ends before 31 December 2013, Dr. Jürgens will receive compensation equivalent to 42 % of the remaining remuneration payable until 31 December 2013. Only half of this amount will be payable if Dr. Jürgens starts working for a direct competitor in Hamburg before 30 June 2012.
Benefi ts totalling € 782 thousand (previous year: € 821 thousand) were paid to former members of the Executive Board and their surviving dependants. Provisions of € 4,278 thousand (previous year: € 4,435 thousand) have been made for pension commitments to active Executive Board members and provisions of € 10,340 thousand (previous year: € 11,692 thousand) have been made for pension commitments to former Executive Board members and their surviving dependants.
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 and the company's fi nancial position and its performance. This remuneration was revised with effect as of 2 November 2007.
The members of the Supervisory Board receive fi xed remuneration of € 10,000 per fi nancial year. The Chairman receives three times this amount and the Vice Chairman is paid one and a half times the basic fi gure. This remuneration increases by 35 % if dividends are paid out to the holders of Class A shares for the fi nancial year in question. Supervisory Board members who belong to a committee receive an additional € 2,500 per committee per fi nancial year, while the Chairman of the respective committee receives € 5,000, but altogether no more than € 10,000. Furthermore, Supervisory Board members receive a meeting attendance fee of € 250 for each meeting of the Supervisory Board or one of its committees. Supervisory Board members who have belonged to the Supervisory Board or a committee for less than a whole fi nancial year receive a corresponding pro rata payment.
The remuneration paid to the Supervisory Board in the fi nancial year under review totalled € 291 thousand (previous year: € 291 thousand).
The members of the company boards and their mandates are listed on page 50 et seq.
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 47 of this report. The Executive Board and Supervisory Board discussed matters of corporate governance in 2011
and on 8 December 2011 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 recognised as expenses for services provided by the auditors of the Consolidated Financial Statements, Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft (previous year: KPMG AG Wirtschaftsprüfungsgesellschaft):
| in € thousand | 2011 | 2010 |
|---|---|---|
| Audit of fi nancial statements | 491 | 781 |
| Other certifi cation services | 69 | 268 |
| Tax advisory services | 27 | 48 |
| Other services | 26 | 10 |
| 613 | 1,107 |
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 the year under review and the previous year, fees for other certifi cation services related predominantly to the qualifi ed review of interim fi nancial statements.
There were no transactions of special signifi cance after the balance sheet date of 31 December 2011.
Hamburg, 6 March 2012
HAMBURGER HAFEN UND LOGISTIK AKTIENGESELLSCHAFT
Klaus-Dieter Peters Dr. Stefan Behn
Heinz Brandt Dr. Roland Lappin
for the period 1 January to 31 December 2011
| in € | 2011 | 2011 | 2010 | 2010 | |
|---|---|---|---|---|---|
| 1. | Revenue | 140,264,949.38 | 138,025,310.71 | ||
| 2. | Decrease in work in progress | - 2,258,772.74 | - 748,536.02 | ||
| 3. | Own work capitalised | 358,912.12 | 266,579.78 | ||
| 4. | Other operating income of which income from translation differences 3,450.67 € (previous year: 2,918.63 €) |
3,675,844.89 | 7,167,690.75 | ||
| 5. | Cost of materials and services | ||||
| a) Expenses for raw materials, consumables, supplies and purchased merchandise |
5,335,036.01 | 4,013,009.52 | |||
| b) Expenses for purchased services | 1,432,764.69 | 6,767,800.70 | 1,523,871.38 | 5,536,880.90 | |
| 6. | Personnel expenses | ||||
| a) Wages and salaries | 93,906,495.23 | 87,935,436.36 | |||
| b) Social security contributions and expenses for pension and similar benefi ts of which for pensions 4,533,008.15 € (previous year: 1,273,075.64 €) |
20,118,406.21 | 114,024,901.44 | 17,618,134.94 | 105,553,571.30 | |
| 7. | Depreciation and amortisation on intangible fi xed assets and property, plant and equipment |
5,917,944.91 | 5,902,441.99 | ||
| 8. | Other operating expenses of which expenses from translation differences 4,496.06 € (previous year: 4,116.86 €) |
35,954,613.31 | 28,799,507.73 | ||
| 9. | Income from profi t transfer agreements | 162,048,470.46 | 138,841,496.57 | ||
| 10. Income from equity participations of which from affi liated companies 862,637.44 € (previous year: 1,012,602.10 €) |
4,164,070.44 | 4,673,925.10 | |||
| 11. Other interest and similar income of which from affi liated companies 5,616,776.87 € (previous year: 4,941,272.54 €) of which income from discounting 19,815.00 € (previous year: 0.00 €) |
9,017,625.74 | 6,729,175.32 | |||
| 12. Amortisation and impairment losses in fi nancial assets | 0.00 | 1,100,000.00 | |||
| 13. Expenses from assumed losses | 1,251,156.37 | 7,159,203.03 | |||
| 14. Interest and similar expenses of which to affi liated companies 4,593,036.70 € (previous year: 3,770,617.38 €) of which from accrued interest 16,206,571.62 € (previous year: 19,097,398.80 €) |
21,011,799.69 | 23,275,607.77 | |||
| 15. Result from ordinary income | 132,342,883.87 | 117,628,429.49 | |||
| 16. Extraordinary income | 0.00 | 110,327.37 | |||
| 17. Extraordinary expenses | 0.00 | 155,338.00 | |||
| 18. Net extraordinary loss | 0.00 | - 45,010.63 | |||
| 19. Taxes on income of which deferred 5,261,530.26 € (previous year: 1,542,944.00 €) |
39,741,579.86 | 30,597,410.94 | |||
| 20. Other taxes | 462,403.32 | 487,746.90 | |||
| 21. Net profi t for the year | 92,138,900.69 | 86,498,261.02 | |||
| 22. Profi t carried forward from the previous year | 165,703,545.72 | 109,899,915.10 | |||
| 23. Dividend distributed | 41,731,829.30 | 30,694,630.40 | |||
| 24. Unappropriated profi t | 216,110,617.11 | 165,703,545.72 |
The annual fi nancial statement and report of Hamburger Hafen und Logistik Aktiengesellschaft, Hamburg, for the 2011 fi nancial year have been prepared according to the provisions of German commercial law and have been endorsed with an unrestricted auditor's certifi cate by the auditors of Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft.The statement of income for the period 1 January to 31 December 2011, and the balance sheet as of 31 December 2011, are presented on this and the following pages.
as of 31 December 2011 in € 31.12.2011 31.12.2011 31.12.2010 31.12.2010 Assets A. Non-current assets I. Intangible assets 1. Software 1,589,944.00 1,262,295.53 2. Payments made on account 0.00 1,589,944.00 53,069.00 1,315,364.53 II. Property, plant and equipment 1. Land, equivalent land rights and buildings, including buildings on leased land 75,135,654.95 70,925,412.79 2. Technical equipment and machinery 2,531,836.05 2,694,887.52 3. Other plant, operating and offi ce equipment 2,904,498.46 3,547,102.56 4. Payments made on account and plant under construction 2,781,710.21 83,353,699.67 7,470,892.17 84,638,295.04 III. Financial assets 1. Interests in affi liated companies 226,037,545.57 225,037,545.57 2. Equity investments 2,618,861.54 2,618,861.54 3. Non-current securities 706,402.85 229,362,809.96 564,561.61 228,220,968.72 314,306,453.63 314,174,628.29 B. Current assets I. Inventories 1. Raw materials, consumables and supplies 181,769.66 203,796.04 2. Work in progress 1,755,449.55 1,937,219.21 4,014,222.29 4,218,018.33 II. Receivables and other assets 1. Trade receivables 885,637.50 815,277.87 2. Receivables from the Free and Hanseatic City of Hamburg of which with a residual term of more than one year 404,883.82 € (previous year: 414,346.11 €) 1,043,219.43 423,711.83 3. Receivables from affi liated companies 427,695,614.83 412,623,758.30 4. Receivables from investee companies 10,063.97 11,809.91 5. Other assets of which with a residual term of more than one year 1,224,327.41 € (previous year: 1,303,477.82 €) 8,883,631.47 438,518,167.20 25,122,028.93 438,996,586.84 III. Cash and cash equivalents 283,236,759.66 198,016,356.63 723,692,146.07 641,230,961.80 C. Accruals and deferrals 323,482.37 389,403.94 D. Deferred tax assets 25,568,251.54 31,363,786.00 1,063,890,333.61 987,158,780.03
| as of 31 December 2011 | ||
|---|---|---|
| -- | ------------------------ | -- |
| Passiva 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 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 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 2. Other earnings reserves a) Port Logistics 56,105,325.36 56,105,325.36 b) Real Estate 1,322,353.86 57,427,679.22 1,322,353.86 62,757,679.22 IV. Unappropriated profi t 1. Port Logistics 202,971,678.40 153,462,247.74 2. Real Estate 13,138,938.71 216,110,617.11 12,241,297.98 486,969,722.22 B. Provisions 1. Provisions for pensions and similar obligations 289,079,536.47 2. Tax provisions 956,209.32 3. Other provisions 32,337,595.42 322,373,341.21 C. Liabilities 1. Payments on account 1,974,495.89 2. Accounts payable 1,746,064.73 3. Liabilities towards the Free and Hanseatic City of Hamburg 10,743.00 4. Liabilities towards HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH 65,758,851.79 65,855,243.21 5. Liabilities towards affi liated companies 173,301,646.69 140,169,179.47 6. Liabilities towards investee companies 1,147,273.96 938,624.98 7. Other liabilities of which from taxes 2,777,702.19 € (previous year: 2,715,835.83 €) of which for social security 1,867,289.53 € (previous year: 3,113,242.55 €) 9,012,410.63 10,227,672.98 252,951,486.69 D. Accruals and deferrals 526,581.69 E. Deferred tax liabilities 1,069,201.80 1,603,206.00 |
in € | 31.12.2011 | 31.12.2011 | 31.12.2010 | 31.12.2010 |
|---|---|---|---|---|---|
| 72,679,826.00 | |||||
| 135,421,599.89 | |||||
| 5,330,000.00 | |||||
| 57,427,679.22 | |||||
| 62,757,679.22 | |||||
| 165,703,545.72 | |||||
| 436,562,650.83 | |||||
| 288,744,562.97 | |||||
| 3,545,891.66 | |||||
| 32,729,640.67 | |||||
| 325,020,095.30 | |||||
| 4,183,081.69 | |||||
| 1,799,849.61 | |||||
| 5,221.97 | |||||
| 223,178,873.91 | |||||
| 793,953.99 | |||||
| 1,063,890,333.61 | 987,158,780.03 |
"We have audited the consolidated fi nancial statements prepared by the Hamburger Hafen und Logistik Aktiengesellschaft, Hamburg, comprising the statement of fi nancial position, the income statement, the statement of comprehensive income, the statement of changes in equity, the statement of cash fl ows and the notes to the consolidated fi nancial statements, together with the group management report for the fi scal year from 1 January 2011 to 31 December 2011. The preparation of the consolidated fi nancial statements and the group management report in accordance with IFRSs as adopted by the EU, and the additional requirements of German commercial law pursuant to Sec. 315a (1) HGB ["Handelsgesetzbuch": "German Commercial Code"] and articles of incorporation and bylaws are the responsibility of the parent company's management. Our responsibility is to express an opinion on the consolidated fi nancial statements and on the group management report based on our audit.
We conducted our audit of the consolidated fi nancial statements in accordance with Sec. 317 HGB and German generally accepted standards for the audit of fi nancial statements promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, fi nancial position and results of operations in the consolidated fi nancial statements in accordance with the applicable fi nancial reporting framework and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated fi nancial statements and the group management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual fi nancial statements of those entities included in consolidation, the determination of entities to be included in consolidation, the accounting and consolidation principles used and signifi cant estimates made by management, as well as evaluating the overall presentation of the consolidated fi nancial statements and the group management report. We believe that our audit provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the fi ndings of our audit, the consolidated fi nancial statements comply with IFRSs as adopted by the EU, the additional requirements of German commercial law pursuant to Sec. 315a (1) HGB and articles of incorporation and bylaws and give a true and fair view of the net assets, fi nancial position and results of operations of the Group in accordance with these requirements. The group management report is consistent with the consolidated fi nancial statements and as a whole provides a suitable view of the Group's position and suitably presents the opportunities and risks of future development."
Hamburg, 6 March 2012
Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft
Grummer Röseler Wirtschaftsprüfer Wirtschaftsprüfer
[German Public Auditor] [German Public Auditor]
We hereby give our assurance that – to the best of our knowledge – the consolidated fi nancial statements convey a true and fair view of the assets, fi nancial position and profi t situation of the Group in accordance with the applicable accounting principles. Furthermore, we hereby certify that the Group Management Report conveys a true and fair view of the course of business, including the business earnings and the Group's situation, and that the principal opportunities and risks entailed in the Group's probable development in the coming fi nancial year are described.
Hamburg, 6 March 2012
Hamburger Hafen und Logistik Aktiengesellschaft
The Executive Board
Klaus-Dieter Peters Dr. Stefan Behn
Heinz Brandt Dr. Roland Lappin
Fully automatic, driverless transport vehicle which carries containers back and forth between the container gantry cranes on the quayside and the block storage yard. HHLA uses AGVs at the Container Terminal Altenwerder.
Automated block storage facilities are used at the HHLA Container Terminal Altenwerder and Burchardkai as a compact means of stacking containers. Rail-Mounted Gantry Cranes are used to transport and stow the boxes.
A crane system used to load and discharge containerships. Container gantry cranes are classed as panamax, post-panamax or super post-panamax depending on the size of vessel they can handle.
Vessels which carry smaller numbers of containers to ports that are not served directly by container mega-ships. Feeders are used to transport boxes from Hamburg to the Baltic region, for instance.
Describes a port's catchment area.
A Terminal which serves as a handling hub. Container trains loaded with mixed cargo arrive at the hub terminal from various points of departure. At the hub, the freight is pooled and transhipped onto connecting trains to a target region or forwarded to the recipient by truck. HHLA's rail subsidiaries currently operate such hub terminals in Prague and Poznán. A third hub will be built in Česká Třebová in 2012.
Transportation via several modes of transport (rail, water, road) combining the specifi c advantages of the respective carriers.
North European international ports. In the broadest sense, the term refers to all large continental ports in Northern Europe from Le Havre to Hamburg and Gothenburg. The Hamburg-Antwerp Range is often used to denote a more specifi c geographic area consisting of Hamburg, the Bremen ports, Rotterdam and Antwerp.
See RMG
Crane units spanning their working area like a gantry, often operating on rails, hence the abbreviation RMG. If used in Block Storage, they are also called storage cranes, and in rail cargo handling they are called rail gantry cranes.
Short for "roll on, roll off", RoRo is a means of loading wheeled cargo, such as cars, which can simply be rolled or driven onto a ship.
A train which travels back and forth on one route with the same arrangement of wagons, eliminating the need for time-consuming shunting. HHLA's rail subsidiaries operate shuttle trains between the sea ports and the Hub Terminals (Hinterland).
See TEU
See RMG
A long-legged vehicle used to transport containers at the terminals. The driver manoeuvres his straddle carrier into position above a container and lifts it up. The vehicles can stack containers up to four layers.
A highly effi cient container gantry crane capable of moving two 40-foot containers or four 20-foot containers in a single movement. Also known as a Twin-Forty container crane.
In maritime logistics, a terminal is a facility where freight transported by various modes of transport is handled, such as a container terminal. Cargo can also be temporarily stored at a terminal prior to the next stage of its journey.
A TEU is a 20-foot standard container, used as a unit for measuring container volumes. A 20-foot standard container is 6.06 metres long, 2.44 metres wide and 2.59 metres high.
Added value is calculated on the basis of the value of production less input (costs of materials, depreciation, other costs). Added value is distributed to different interest groups in HHLA , such as employees, shareholders, partners or the state.
Average net non-current assets (intangible assets, property, plant and equipment, investment properties, associates accounted for using the equity method and fi nancial assets) + average net current assets (inventories + trade receivables less accounts payable) Assets held for sale are not part of the average operating assets.
Expenses that must be incurred to utilise fi nancial resources as equity or borrowed capital.
Performance-oriented pension obligations arising from the accrued and estimated pension rights of active and former members of staff as at settlement day, allowing for probable future changes in pensions and emoluments.
Financial instruments that are traditionally used to protect existing investments or obligations.
Earnings before interest and taxes.
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 Amortisation.
Earnings before tax.
Law of economics according to which increases in production are accompanied by reductions in unit costs.
Equity / total assets
Interest income – interest expenses +/– result from participations – write-downs and losses on the disposal of fi nancial investments and of current securities – expense from loss adoption
Commercial debts / equity
International Accounting Standards
International Financial Reporting Standards
Impairment test as defi ned under IFRS
Payments for investments in tangible assets and investment property and for investments in intangible assets.
EBIT – taxes + amortisation and depreciation – writebacks +/– change of non-current provisions (excl. interest portion) +/– gains / losses on the disposal of property, plant and equipment + change of working capital
EBIT / average operating assets
Sales derived from selling, letting or leasing and from services provided by the Group, less sales deductions and turnover tax.
30 March 2012 Annual Report
15 May 2012 Interim Report January – March 2012
14 June 2012 Annual General Meeting
14 August 2012 Interim Report January – June 2012
13 November 2012 Interim Report January – September 2012
Hamburger Hafen und Logistik AG Bei St. Annen 1 20457 Hamburg Germany Phone: +49-40-3088-0 Fax: +49-40-3088-3355 [email protected] www.hhla.de
Investor Relations Phone: +49-40-3088-3100 Fax: +49-40-3088-55-3100 [email protected]
Corporate Communications Phone: +49-40-3088-3520 Fax: +49-40-3088-3355 [email protected]
Concept and Design Kirchhoff Consult AG
Printed by Druckerei F. Kriechbaumer
The report was printed on Recystar polar. The paper fulfi lls the requirement of "Blauer Engel" in accordance to RAL-UZ 14.
The Hamburger Hafen und Logistik Aktiengesellschaft Annual Report 2011 is a translation of the original German Hamburger Hafen und Logistik Aktiengesellschaft Geschäftsbericht 2011. Please note that only the German version is legally binding.
| in € million | 2007 | 2008 | 2009 | 2010 | 2011 |
|---|---|---|---|---|---|
| Revenue | |||||
| Port Logistics subgroup | 1,152.4 | 1,299.2 | 962.9 | 1,042.8 | 1,190.6 |
| Real Estate subgroup | 30.8 | 32.6 | 32.7 | 29.8 | 31.7 |
| Consolidation | - 3.2 | - 5.0 | - 4.9 | - 4.8 | - 5.0 |
| HHLA Group | 1,180.0 | 1,326.8 | 990.7 | 1.067.81 | 1,217.3 |
| EBITDA | |||||
| Port Logistics subgroup | 364.6 | 439.4 | 261.1 | 290.1 | 317.3 |
| Real Estate subgroup | 14.1 | 17.6 | 16.4 | 16.8 | 16.2 |
| Consolidation | 0 | - 0.2 | 0 | 0 | 0 |
| HHLA Group | 378.7 | 456.8 | 277.5 | 306.9 | 333.4 |
| EBITDA margin in % | 32.1 | 34.4 | 28.0 | 28.7 | 27.4 |
| EBIT | |||||
| Port Logistics subgroup | 277.0 | 341.3 | 147.7 | 179.9 | 194.8 |
| Real Estate subgroup | 10.3 | 13.7 | 12.3 | 12.7 | 11.9 |
| Consolidation | 0.3 | 0.1 | 0.2 | 0.3 | 0.3 |
| HHLA Group | 287.6 | 355.12 | 160.22 | 192.92 | 207.0 |
| EBIT margin in % | 24.4 | 26.8 | 16.2 | 18.1 | 17.0 |
| Profit after tax | 152.0 | 217.5 | 89.1 | 113.9 | 118.8 |
| Profit after tax and minority interests | 111.3 | 160.4 | 53.0 | 76.2 | 89.3 |
| Cash Flow/Investments/Depreciation and Amortisation | |||||
| Cash flow from operating activities | 246.7 | 341.9 | 193.2 | 206.9 | 266.1 |
| Cash flow from investing activities | - 174.7 | - 265.6 | - 157.3 | - 36.3 | - 138.0 |
| Cash flow from financing activities | 131.9 | - 88.5 | - 88.6 | - 95.2 | - 45.9 |
| Investments | 194.8 | 259.4 | 159.7 | 173.8 | 128.7 |
| Depreciation and amortisation | 91.0 | 101.8 | 117.3 | 114.0 | 126.4 |
| Assets and Liabilities | |||||
| Non-current assets | 1,042.9 | 1,174.2 | 1,224.9 | 1,290.6 | 1,280.1 |
| Current assets | 440.9 | 438.3 | 365.6 | 424.5 | 531.5 |
| Equity | 569.5 | 682.6 | 637.0 | 567.0 | 644.7 |
| Equity ratio3 in % |
38.4 | 42.3 | 40.0 | 33.1 | 35.6 |
| Pension provisions | 312.4 | 300.7 | 325.1 | 331.1 | 313.7 |
| Other non-current assets | 342.4 | 350.3 | 385.5 | 518.8 | 563.9 |
| Current liabilities | 259.5 | 278.9 | 242.9 | 298.2 | 289.3 |
| Gearing ratio | 0.8 | 0.6 | 0.8 | 1.1 | 0.9 |
| Total assets | 1,483.8 | 1,612.5 | 1,590.5 | 1,715.1 | 1,811.5 |
| Employees | |||||
| Employees as of 31.12. | 4,565 | 5,001 | 4,760 | 4,679 | 4,797 |
| Performance Data | |||||
| Container throughput in million TEU | 7.2 | 7.3 | 4.9 | 5.8 | 7.1 |
| Container transport 4 in million TEU |
1.7 | 1.8 | 1.5 | 1.7 | 1.9 |
For the purposes of comparison, revenue has been restated due to the reclassification of incidental rental expenses.
EBIT from continuing activities €190.7 million in 2010, €177.7 million in 2009 and €357.8 million in 2008
Equity ratio in 2010 after a reclassification from minority interests to financial liabilities
Transport volume was fully consolidated
Hamburger Hafen und Logistik Aktiengesellschaft Bei St. Annen 1, 20457 Hamburg, Germany, Phone: +49-40-3088-0, Fax: +49-40-3088-3355, www.hhla.de, [email protected]
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.