35. Equity

Changes in the individual components of equity for the reporting period and the previous year are shown in the statements of changes in equity.

Subscribed capital

As of the balance sheet date, HHLA AG’s share capital consists of two different share classes: Class A shares and Class S shares. Subscribed capital totals € 75,220 thousand (31 December 2020: € 74,405 thousand), divided into 72,514,938 Class A shares (31 December 2020: 71,700,215 Class A shares) and 2,704,500 Class S shares; each no-par-value share represents € 1.00 of share capital on paper. The share capital has been fully paid in.

In the course of the stock flotation on 2 November 2007, 22,000,000 Class A shares were placed on the market. This corresponds to a free float of approx. 30 % of the company’s share capital. As of the balance sheet date, the Free and Hanseatic City of Hamburg holds 70.35 % of the voting rights through the company HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH, Hamburg (31 December 2020: 70.11 %).

In the financial year, a capital increase was carried out in connection with the dividend distribution to holders of Class A shares. For further information, please refer to Note 21. The remaining undistributed profit was carried forward to new account.

In July 2021, shareholder dividend entitlements in the amount of € 17,103 thousand were thus asserted from Authorised Capital I.

Authorised capital

As of the balance sheet date, the company has Authorised Capital I for the issue of Class A shares and Authorised Capital II for the issue of Class S shares.

Authorised Capital I

Using Authorised Capital I (cf. Article 3 [4] of the articles of association) and subject to the approval of the Supervisory Board, the Executive Board is still authorised – following the partial utilisation of Authorised Capital I in connection with the scrip dividend – to increase the company’s share capital until 20 June 2022 by up to € 32,558,313.00 by issuing up to 32,558,313 new registered Class A shares for subscription in cash and/or in kind in one or more stages. The statutory subscription rights of holders of Class S shares shall be excluded. The Executive Board is additionally authorised, subject to the approval of the Supervisory Board, to exclude the statutory subscription rights of holders of Class A shares in those cases covered in more detail in the resolution, such as issue for contributions in kind. Furthermore, the issue of new Class A shares while excluding the subscription rights of Class A shareholders is limited to a total of 20 % of the share capital attributable to Class A shares. All Class A shares issued or that could be issued under other authorisations with the exclusion of subscription rights count towards this 20 % limit.

Authorised Capital II

Using Authorised Capital II (cf. Article 3 [5] of the articles of association), the Executive Board is authorised, subject to the approval of the Supervisory Board, to increase the company’s share capital until 20 June 2022 by up to € 1,352,250.00 by issuing up to 1,352,250 new registered Class S shares for subscription in cash and/or in kind in one or more stages. The statutory subscription rights of holders of Class A shares shall be excluded. The Executive Board is 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.

Other authorisations

The Annual General Meeting of HHLA AG held on 18 June 2019 authorised the Executive Board, subject to the approval of the Supervisory Board, to issue on one or more occasions up to 17 June 2024 bearer or registered bonds with warrants and/or convertible bonds or combinations of these instruments (hereinafter known collectively as “debenture bonds”) with a total nominal value of up to € 300,000,000.00 and to grant the bearers or creditors of the debenture bonds warrants or conversion rights for up to 10,000,000 new registered Class A shares in the company, each representing € 1.00 of the share capital, subject to the detailed terms of the bonds with warrants and/or convertible bonds. The respective terms may also provide for a warrant or conversion obligation as well as an issuer put option to provide Class A shares in the company as of the end of the term or at an earlier date. The detailed terms of the resolution state that shareholders’ subscription rights may also be excluded when the debenture bonds are issued. As per Article 3 (6) of the articles of association, conditional capital of € 10,000,000.00 is available to service warrants and conversion rights and obligations as well as any tender rights. This is made up of 10,000,000 new registered Class A shares.

The Annual General Meeting held on 10 June 2021 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 share capital accounted for by Class A shares at the time of the resolution or, if lower, at the time the authorisation is exercised. In addition to being sold on the stock exchange or offered to all shareholders in line with their shareholdings, the Class A treasury shares acquired under this authorisation or previous authorisations may – subject to the approval of the Supervisory Board – be used in the cases stipulated by the resolution excluding other shareholders’ subscription rights and/or be redeemed either in whole or in part without the need for an additional resolution by the Annual General Meeting. This authorisation expires on 09 June 2026. The authorisation may be used for any legally permissible purpose, except for trading in treasury shares.

HHLA AG does not currently hold any treasury shares. There are no plans to buy back shares.

Capital reserve

The Group’s capital reserve includes premiums from share issues, from capital increases at non-controlling subsidiaries, from a reserve increase through an employee participation programme and from capital increases in the context of dividend distributions with the option to reinvest them as a contribution in kind of Class A shares. The associated issue costs were deducted from the capital reserve.

The capital reserve increased to € 179,718 thousand as a result of a capital increase in connection with the dividend distribution to the Class A shareholders (previous year: € 164,599 thousand). Further information can be found in the paragraph on subscribed capital as well as under Note 21.

Retained earnings

Retained earnings include net profits from prior years for companies included in the Consolidated Financial Statements, insofar as these were not distributed as dividends. This item also encompasses differences between HGB and IFRS as of 1 January 2006 (the transitional date).

Other comprehensive income

In accordance with the currently applicable version of IAS 19 (revised 2011), the HHLA Group’s other comprehensive income includes all actuarial gains and losses from defined benefit pension plans. This item additionally comprises changes in the fair value of hedging instruments (cash flow hedges) and the corresponding tax effects.

The reserve for translation differences enables the recognition of differences arising on the translation of financial statements for foreign subsidiaries.

Non-controlling interests

Non-controlling interests comprise outside interests in the Group companies’ consolidated equity.

Non-controlling interests increased in the reporting year primarily due to the allocation of the current total comprehensive income as well as due to the first-time consolidation and the capital increase of shares in affiliated companies.

Notes on capital management

Capital management at the HHLA Group aims to ensure the Group’s long-term financial stability and flexibility in order to financially safeguard the Group’s growth and enable its shareholders to reasonably participate in its success. Balance sheet equity is the primary benchmark in this regard. The key value-oriented performance indicator at the HHLA Group is the return on capital employed (ROCE). The equity ratio is also monitored in order to maintain a stable capital structure.

The increase in equity is primarily attributable to the higher annual earnings of € 132,897 thousand compared with the previous year, the capital increase of € 16,862 thousand from the dividend distribution in return for contributions in kind and the interest rate-related change of € 32,337 thousand in actuarial losses including tax effects not recognised in profit or loss. The distribution of dividends in the amount of € 38,816 thousand and the put option granted to non-controlling interests in the amount of € 20,870 thousand had the opposite effect.

External minimum capital requirements were fulfilled at all agreed audit points throughout the reporting year. See Note 38 for more information.