Financial position

Compared to the previous year, the HHLA Group’s balance sheet total decreased by a total of € 18.9 million to € 2,591.1 million.

On the assets side of the balance sheet, non-current assets rose by € 26.5 million. Investment property rose by € 12.0 million to € 197.1 million due to capital expenditure (previous year: € 185.1 million). Deferred taxes rose year-on-year by € 17.3 million to € 141.4 million (previous year: € 124.1 million).

Current assets decreased by € 45.4 million to € 440.2 million (previous year: € 485.7 million). The decline resulted mainly from a reduction in cash and cash equivalents and short-term deposits of € 31.2 million to € 126.9 million (previous year: € 158.0 million) and a decrease in receivables from related parties of € 13.5 million to € 85.3 million (previous year: € 98.8 million).

Equity

in € million

On the liabilities side, equity declined by € 11.9 million compared to year-end 2019 to € 567.0 million (previous year: € 578.9 million). The decline is primarily attributable to the dividend payout of € 55.7 million, the reclassification of a future financial settlement totalling € 23.3 million as a non-current financial liability, the interest-related change of € 15.2 million in actuarial losses including tax effects outside profit or loss and the change of € 16.2 million in the reserve for translation differences. This was offset by the capital increase of € 24.7 million arising from the scrip dividend distribution, as well as the profit for the reporting period of € 74.1 million. The equity ratio decreased to 21.9 % (previous year: 22.2 %).

Non-current liabilities fell by € 25.1 million to € 1,724.7 million (previous year: € 1,749.8 million). This decline mainly resulted from reductions in non-current financial liabilities and non-current liabilities to related parties totalling € 95.9 million. The increase in pension provisions and other non-current provisions totalling € 69.5 million had an opposing effect.

Current liabilities grew by € 18.1 million to € 299.4 million (previous year: € 281.3 million), mainly due to the increase in trade payables and income tax liabilities. The decline in current financial liabilities had an opposing effect.

Investment analysis

Investments, depreciation and amortisation

in € million

Capital expenditure in the 2020 financial year totalled € 196.3 million (previous year: € 224.9 million). This figure includes additions of € 7.7 million from rights of use (rent and leases) not recognised as a direct cash expense (previous year: € 55.3 million). Capital expenditure focused on extending the Hamburg container terminals and expanding intermodal transport capacities. Investment projects were funded by the operating cash flow generated in the financial year.

Property, plant and equipment accounted for € 167.6 million (previous year: € 207.0 million) of capital expenditure, while intangible assets accounted for € 7.9 million (previous year: € 10.0 million) and investment property for € 20.8 million (previous year: € 8.0 million).

Capital expenditure by segment

Capital expenditure 2020: € 196 million

Investments amounting to € 85.9 million were made in the Container segment (previous year: € 72.8 million). Capital expenditure was dominated by the procurement of handling equipment and storage capacities at the Hamburg container terminals. The Intermodal segment invested € 82.7 million (previous year: € 130.9 million). The METRANS Group accounted for most of this investment volume, mainly for wagons and locomotives. Capital expenditure in the Logistics segment amounted to € 7.0 million (previous year: € 4.3 million). The pro forma Holding/Other segment invested a total of € 5.2 million (previous year: € 7.5 million). Capital expenditure in the Real Estate segment of € 17.7 million (previous year: € 10.0 million), was mainly for the development of the Speicherstadt historical warehouse district.

Investments in the Container segment focus on enhancing the productivity of existing terminal areas by using state-of-the-art handling technology and developing berth places for the trend in ship sizes. Meanwhile, in the Intermodal segment, investments primarily aim to further improve the performance and range of its hinterland connections.

As of year-end, there were other financial liabilities for outstanding purchase commitments totalling € 125.0 million (previous year: € 119.2 million). This figure includes € 85.0 million (previous year: € 87.5 million) for the capitalisation of property, plant and equipment.

Liquidity analysis

Cash flow from operating activities fell year-on-year from € 322.7 million to € 291.2 million. This decrease of € 31.5 million is mainly attributable to a year-on-year decline in EBIT of € 97.7 million. There was an opposing effect from the year-on-year change in provisions of € 46.9 million and the year-on-year reduction of € 22.2 million in income tax payments.

Cash flow from investing activities (outflow) of € 177.3 million, down on the prior-year figure of € 193.8 million. This € 16.5 million decline in cash outflows was mainly the result of payments received for short-term deposits (previous year: payments made). The decrease in payments received for the disposal of intangible assets, property, plant and equipment and investment property had an opposing effect.

Free cash flow – the total cash flow from operating and investing activities – decreased to € 113.9 million (previous year: € 128.9 million).

Cash flow from financing activities (outflow) amounted to € 150.9 million in the reporting period (previous year: € 176.9 million) and was therefore € 26.0 million below the prior-year figure, primarily due to lower cash dividend payments than in the previous year. Higher payments of profit shares to non-controlling shareholders had an opposing effect.

The HHLA Group had sufficient liquidity as of year-end 2020. There were no liquidity bottlenecks in the course of the financial year. Financial funds totalled € 168.8 million as of 31 December 2020 (31 December 2019: € 208.0 million). Including all short-term deposits, the Group’s available liquidity as of year-end 2020 came to a total of € 208.8 million (previous year: € 253.0 million).

Financing analysis

Financial management at the HHLA Group is handled centrally and serves the overriding objective of ensuring the Group’s long-term financial stability and flexibility. Group clearing pools the Group’s financial resources, optimises net interest income and substantially reduces dependency on external sources of funding. Derivative financial instruments can be used to reduce the risk of changes in interest rates and, to a minor extent, to reduce currency and commodity price risks.

HHLA’s business model 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 leases to achieve funding with matching maturities. Pension provisions are also available for long-term internal financing.

At € 295.1 million as of the balance sheet date, liabilities to banks were below the prior-year figure of € 331.8 million. As in the prevoius year, the Group did not draw on any additional financing in the 2020 financial year. During the reporting year, payments for the redemption of loans amounted to € 37.2 million (previous year: € 39.7 million). Due to the maturities agreed and its stable liquidity position, the company had no significant refinancing requirements.

Maturities of bank loans

by year and in € million

As of the balance sheet date, liabilities from bank loans were denominated exclusively in euros. In terms of conditions, approximately 82 % have fixed interest rates and some 18 % have floating interest rates. As a result of borrowing, certain affiliated companies had covenants linked to key balance sheet figures, which mostly require a minimum equity ratio to be met. Covenants are currently in place for approximately 16 % of bank loans. These covenants were met at all agreed audit points throughout the reporting year.

As of the balance sheet date, HHLA disclosed non-current liabilities to related parties totalling € 457.1 million (previous year: € 485.4 million), resulting mainly from the recognition of the leasing liability to the Hamburg Port Authority (HPA).

The leases relate primarily to long-term agreements between the HHLA Group and either the Free and Hanseatic City of Hamburg or HPA for leasing land and quay walls in the Port of Hamburg and the Speicherstadt historical warehouse district.

Cash, cash equivalents and short-term deposits, the bulk of which is held centrally by the holding company, totalled € 126.9 million as of the balance sheet date (previous year: € 158.0 million). These funds are mainly invested at German financial institutions with verified high credit ratings as demand deposits, call money and short-term deposits. As a precautionary measure, credit facilities were increased in the reporting year. As of the balance sheet date, the Group had unused credit facilities amounting to € 54.3 million (previous year: € 3.1 million). A credit facility of € 50.0 million concluded in the reporting year secures favourable market conditions for the Group and represents a secure medium-term liquidity reserve. Since the Group has sufficient liquidity at its disposal, this credit facility was not used in the reporting year. The utilisation rate of a further credit line of € 11.8 millionampunts to 63.5 % (previous year: 69.4 %). Of the total cash and cash equivalents as of the reporting date, € 3.7 million (previous year: € 9.1 million) was subject to restrictions in Ukraine relating to the transfer of currency abroad.

As HHLA has a large number 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. Furthermore, Deutsche Bundesbank once again confirmed the Group’s eligibility for central bank finance.

Public subsidies awarded for individual development projects that are subject to specific conditions are of minor importance in terms of their volume at Group level.

Acquisitions, disposals and other changes to the consolidated group

In the 2020 financial year, HHLA set up two companies for the purpose of expanding its intermodal operations in Ukraine. Among other things, these operations include rail freight, freight transport services and storage services. HHLA also 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 field of transport and logistics. Its main focus is the development and operation of a digital portal for information, planning and booking in the field of intermodal transport chains. Furthermore, METRANS set up a special-purpose entity in Hamburg, the object of which is to construct and operate intermodal container terminals. HHLA Sky GmbH acquired shares in the firm Third Element Aviation for the development, production and sales of unmanned flight systems and related components. The company is consolidated within the Logistics segment using the equity method. Notes to the consolidated financial statements, no. 3 Composition of the Group

There were no other acquisitions, changes in shareholdings in subsidiaries or changes to the consolidated group in the 2020 financial year. For details of company acquisitions after the balance sheet date, please refer to Events after the balance sheet date.