3. Make-up of the Group

Consolidated companies

The group of consolidated companies at HHLA comprises a total of 33 domestic and 18 foreign companies. For a complete list of equity investments in accordance with Section 313 (2) HGB, see also Note 48. The information provided here about the equity and annual net profit recorded by the various companies is taken from the respective annual financial statements, which were prepared in line with national accounting regulations. Information required under IFRS 12.10 and IFRS 12.21 is also included in the details of shareholdings.

Subsidiaries

The Consolidated Financial Statements comprise the financial statements for Hamburger Hafen und Logistik Aktiengesellschaft (HHLA) and its significant subsidiaries. Subsidiaries are companies controlled by the Group. The Group is deemed to control a company if it has a risk exposure or right to fluctuating returns resulting from its involvement in the investee and if it can also use its power over the investee to affect these returns. In particular, HHLA controls an investee if – and only if – all of the characteristics listed in IFRS 10.7 apply. Subsidiaries’ financial statements are included in the Consolidated Financial Statements from the time control begins until the time control ends.

Non-controlling interests are valued at the time of acquisition using the relevant share of the acquired company’s identifiable net assets. Changes in the Group’s shareholding in a subsidiary which do not lead to a loss of control are recorded in the balance sheet as equity transactions.

Interests in joint ventures

The Group holds interests in joint ventures. As per IFRS 11, a joint venture is subject to a joint contractual agreement between two or more parties to carry out an economic activity which is subject to joint control. Joint control is the contractually agreed division of managerial responsibilities for this arrangement. It only exists if the decisions associated with this business activity require the unanimous consent of the parties involved in joint management.

The HHLA Group holds more than half of the voting rights in the companies HHLA Frucht- und Kühl-Zentrum GmbH, Ulrich Stein Gesellschaft mit beschränkter Haftung and HVCC Hamburg Vessel Coordination Center GmbH yet has no controlling influence as the companies are effectively jointly managed. This is due primarily to the equal representation of the essential corporate bodies (management and/or Supervisory Board).

No unrecorded losses relating to joint ventures were incurred either in the reporting year or on a cumulative basis.

Interests in associated companies

Companies designated as associated companies are those over which the shareholder has a material influence. At the same time, it is neither a subsidiary nor an interest in a joint venture. A material influence is assumed when it is possible to be involved in the associated company’s financial and commercial decisions without exercising a controlling influence. This is generally the case when 20 to 50 % of the voting rights are held, either directly or indirectly.

HHLA does not provide information on associated companies as per IFRS 12 because the relevant companies are of minor importance overall for the Group. HHLA does not believe that this has a negative impact on the statement concerning the nature of interests in other companies and the associated risks. The effects of these interests on the results of operations, net assets and financial position of the HHLA Group are insignificant.

Accounting for interests in joint ventures and associates

Interests in joint ventures and associates are accounted for using the equity method. With the equity method, the share in each joint venture and/or associated company is first stated at acquisition cost. Instead of being amortised, any goodwill recognised within the carrying amount of the investment when it is reported in the balance sheet for the first time is subject to 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 results of the joint venture or associated company is recorded in the consolidated 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 joint venture or 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 joint venture or associated company.

Significant results from transactions between HHLA and the joint venture or associated company are eliminated in proportion to the interest in the company.

Acquisitions, disposals and other changes to the consolidated group

With the partnership agreement of 16 January 2020, HHLA International GmbH, Hamburg, with 25.0 % of the share capital, and SC Container Terminal Odessa, Odessa, Ukraine, with 75.0 % of the share capital, founded the Limited Liability Company “HHLA Intermodal Ukraine”, Odessa, Ukraine. The object of the company includes rail freight traffic, freight traffic services for vehicle, maritime and river transport services, warehousing services and auxiliary services for overland transport. Its inclusion in the HHLA group of consolidated companies took place on 30 September 2020 as a fully consolidated subsidiary.

With the partnership agreement of 22 January 2020, the limited liability company “HHLA Intermodal Ukraine”, Odessa, Ukraine, with 100 % of the share capital, founded the Limited Liability Company “Ukrainian Intermodal Company”, Odessa, Ukraine. The object of the company includes rail freight traffic, freight traffic services for vehicle, maritime and river transport services, warehousing services and auxiliary services for overland transport. Its inclusion in the HHLA group of consolidated companies took place on 30 September 2020 as a fully consolidated subsidiary.

With the partnership agreement of 1 July 2020, Hamburger Hafen und Logistik Aktiengesellschaft (HHLA) founded the company modility GmbH, Hamburg, and acquired all shares in this company. The object of the company is the development and provision of IT-based services in the fields of transport and logistics, specifically the development and operation of an online portal for providing information and making arrangements and bookings in the area of intermodal transport chains and combined transport. Its inclusion in the HHLA group of consolidated companies took place on 31 December 2020 as a fully consolidated subsidiary.

With the partnership agreement of 24 September 2020, METRANS a.s., Prague, Czech Republic, founded the company METRANS Umschlagsgesellschaft mbH, Hamburg. The object of the company is the installation and operation of intermodal container terminals, as well as all related auxiliary transactions and ancillary business. Its inclusion in the HHLA group of consolidated companies took place on 31 December 2020 as a fully consolidated subsidiary.

With the share purchase and transfer agreement dated 17 December 2020, HHLA Sky GmbH, Hamburg, acquired 29.7 % of the shares in Third Element Aviation GmbH, Bielefeld. The object of the company is the development, manufacture and distribution of unmanned flight systems and similar systems, as well as related components and accessories, for commercial, non-military applications, as well as the trading of related components and the provision of related services. Its inclusion in the HHLA group of consolidated companies took place on 31 December 2020 as a joint venture consolidated using the equity method, and it is assigned to the Logistics segment.

On 28 September 2020, HHLA International GmbH, Hamburg, signed a shareholding and partnership agreement for the acquisition of 50.01 % of shares in Piattaforma Logistica Trieste S.r.l., Trieste, Italy (PLT). The object of the company is the planning, construction, maintenance and management of the logistics platform between Scalo Legnami and the former Italsider steelworks in the port centre of Trieste. Among other things, this includes conducting operations as a port company, storing materials and goods on behalf of third parties and the promotion, organisation, management and marketing of all services in connection with the exchange of goods, particularly intermodal exchange by ship, train and overland transport and the use of terminals that are equipped for goods transport and logistics of all kinds. The closing of the transaction (corresponding to the acquisition date) is tied to various closing conditions and took place on 7 January 2021. On the same date, the company was renamed HHLA PLT Italy S.r.l. The first-time consolidation of the company took place on the acquisition date. The purchase price (transferred consideration) was paid in euros.

In connection with the acquisition of the shares, a capital increase of € 12,008 thousand was carried out. The contracts also provide for various options on both the buyer and seller sides, some of which are mutually dependent. In the medium term, HHLA PLT Italy has various options for expanding the existing infrastructure and, as a result, HHLA has the option of successively increasing its stake by taking over shares from the existing shareholders in conjunction with further capital increases. If these options for expansion are not exercised, the existing shareholders have the option of selling their remaining shares to HHLA for € 21,000 thousand or maintaining the status quo. The exercise of the options for expansion and thus their entry into force are subject to the approval of HHLA's Supervisory Board. An overall valuation of the transaction has not yet been carried out.

The following tables depicts the consideration transferred for the acquisition of the company and the values of the assets identified, and liabilities acquired, on the basis of the acquisition of 50.01 % of the shares on the date of acquisition:

The fair values of the acquired assets and assumed liabilities have only been determined on a provisional and possibly incomplete basis, as, for example, the measurement of the underlying figures is taken from the non-audited Consolidated Financial Statements. The final measurement has yet to be completed, meaning that changes to the fair values may still occur. This would result in a change in preliminary goodwill.

The preliminary derived goodwill of € 8,446 thousand based on the acquisition of 50.01% of the shares reflects the future development of the newly built terminal, as well as the existing general cargo activities and the associated establishment and expansion of customer relations. Besides participating in the growth of activities, HHLA has the prospect of further expanding its rail operations in the Intermodal segment in the Mediterranean and offering customers holistic transport solutions. The goodwill has been allocated to the Container segment. It is not anticipated that a portion of the recorded goodwill will be tax deductible.

The acquired customer relations in the amount of € 937 thousand relate to general cargo.

The fair value of trade receivables amounts to € 1,688 thousand and is collectable in full.

The proportionate net assets of the non-controlling interests recognised in the course of the business combination amount to € 3,055 thousand based on the acquisition of 50.01% of the shares. This valuation is based on the same criteria that were used to value the acquired assets and liabilities.

With the shareholding and partnership agreement of 16 December 2020, Hamburger Hafen und Logistik Aktiengesellschaft (HHLA) acquired 80.0 % of shares in iSAM AG, Mühlheim an der Ruhr. The object of the company is the development and distribution of IT software and the distribution of IT hardware; consultancy on the development of internal IT concepts, the design and implementation of system solutions, as well as consultancy, development and production with regard to automation concepts in manufacturing, trading and service companies. The closing of the transaction (corresponding to the acquisition date) is tied to various closing conditions and took place on 19 January 2021. The first-time consolidation of the company took place on the acquisition date.

In the event that existing shareholders wish to sell shares in the company, HHLA has a pre-emptive and co-sale right.

The following table depicts the values of the assets identified, and liabilities acquired, on the date of acquisition:

The fair values of the acquired assets and assumed liabilities have only been determined on a provisional and possibly incomplete basis, as, for example, the measurement of the underlying figures is taken from the non-audited Consolidated Financial Statements. The final measurement has yet to be completed, meaning that changes to the fair values may still occur. This would result in a change in preliminary goodwill.

The preliminary derived goodwill in the amount of € 7,514 thousand reflects the opportunity to participate in the future development of the Group and the leveraging of synergies for HHLA’s own operations (process optimisations in the area of container handling, strengthening customer loyalty, cross-selling potential). The goodwill has been allocated to the Logistics segment. It is not anticipated that a portion of the recorded goodwill will be tax deductible.

The acquired technologies in the amount of € 1,581 thousand reflect the software solutions developed and marketed by the company to automate process chains in a variety of industries (steel, transport and logistics, and aviation).

Customer relations exist with big-name companies in the logistics, commodities, mining and aviation industries. Thanks to the company’s long history stretching back to 1983, the software solutions sold under the iSAM brand since 2002 together with the corresponding hardware solutions for the automation of process chains are well known in the relevant industries.

Subject to a preliminary assessment pursuant to Section 8c (1) sentence 7 of the German Corporation Tax Act (KStG), it is possible to recognise loss carryforwards that can be used for tax purposes.

The fair value of trade receivables amounts to € 744 thousand and is collectable in full.

The fair value of non-controlling interests recorded during the company acquisition stands at € 1,722 thousand. This valuation is based on the same criteria that were used to value the acquired assets and liabilities.

There were no other acquisitions, disposals of shares in subsidiaries or changes to the group of consolidated companies.