Financial position

Balance sheet analysis

Compared to the previous year, the HHLA Group’s balance sheet total increased by a total of € 210.8 million to € 2,801.9 million as of 31 December 2021.

On the assets side of the balance sheet, non-current assets rose by € 143.1 million. The change was mainly due to an increase in property, plant and equipment, resulting from the first-time consolidation of the new companies as well as from capital expenditure. Depreciation, amortisation and write-downs had an opposing effect on property, plant and equipment.

Current assets increased by € 67.6 million to € 507.9 million (previous year: € 440.2 million). The rise resulted mainly from an increase in cash and cash equivalents and short-term deposits of € 28.7 million to € 155.5 million (previous year: € 126.9 million) as well as an increase in trade receivables of € 21.4 million to € 188.3 million (previous year: € 166.9 million).

Equity

in € million

On the liabilities side, equity rose by € 138.2 million compared to year-end 2020, to € 705.2 million (previous year: € 567.0 million). The increase was mainly due to the positive result for the reporting period of € 132.9 million and a contribution in kind as part of a capital increase from scrip dividend rights in subscribed capital and capital reserves. The interest-related change in actuarial gains including tax effects outside profit or loss and the rise in non-controlling interests as a result of the first-time consolidation of the new companies also contributed to the increase in liabilities. There was an opposing effect from the distribution of dividends and the reclassification to financial liabilities of the potential obligation from a put option in connection with the first-time consolidation of HHLA PLT Italy. The equity ratio increased to 25.2 % (previous year: 21.9 %).

Non-current liabilities rose by € 5.5 million to € 1,730.2 million (previous year: € 1,724.7 million). The increase was mainly the result of the € 55.0 million increase in non-current financial liabilities. The decrease in pension provisions of € 41.8 million had an opposing effect.

The rise in current liabilities of € 67.1 million to € 366.5 million (previous year: € 299.4 million) is primarily a result of the increase in current financial liabilities, current liabilities to related parties, trade payables and other non-financial liabilities.

Investment analysis

Investments, depreciation and amortisation

in € million

Capital expenditure in the 2021 financial year totalled € 231.6 million (previous year: € 196.3 million). This figure includes additions of € 43.4 million from rights of use (rent and leases) not recognised as a direct cash expense (previous year: € 7.7 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 € 197.8 million (previous year: € 167.6 million) of capital expenditure, while intangible assets accounted for € 11.0 million (previous year: € 7.9 million) and investment property for € 22.8 million (previous year: € 20.8 million).

Capital expenditure by segment

Capital expenditure 2021: € 232 million

Investments amounting to € 100.5 million were made in the Container segment (previous year: € 85.9 million). Capital expenditure was dominated by the procurement of handling equipment and storage capacities at the Hamburg container terminals. Investments in the Intermodal segment amounted to € 93.4 million (previous year: € 82.7 million). The METRANS Group accounted for most of this capital expenditure, investing mainly in wagons and locomotives as well as in the development of existing and new hinterland terminals. Capital expenditure in the Logistics segment amounted to € 4.8 million (previous year: € 7.0 million). The pro forma Holding/Other segment invested a total of € 8.8 million (previous year: € 5.2 million). Capital expenditure in the Real Estate segment of € 24.2 million (previous year: € 17.7 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 are focused on acquiring sufficient wagons and locomotives to meet rising transport volumes while also improving the performance and range of its hinterland connections.

As of year-end, there were other financial liabilities for outstanding purchase commitments totalling € 128.3 million (previous year: € 125.0 million). This figure includes € 122.6 million (previous year: € 85.0 million) for the capitalisation of property, plant and equipment.

Liquidity analysis

Cash flow from operating activities rose year-on-year from € 291.2 million to € 315.9 million. This increase of € 24.7 million is mainly attributable to a year-on-year rise in EBIT of € 104.6 million. There was an opposing effect from the year-on-year increase in income tax expenses of € 40.0 million, the year-on-year decrease in provisions of € 34.4 million and the change in trade receivables and other assets by € 27.0 million.

Cash flow from investing activities (outflow) of € 227.4 million was above the prior-year figure of € 177.3 million. This € 50.1 million increase in cash outflow was mainly the result of payments for short-term deposits (previous year: proceeds) and the year-on-year increase in payments for the acquisition of shares in consolidated companies.

Free cash flow – the total cash flow from operating and investing activities – decreased to € 88.5 million (previous year: € 113.9 million).

Cash flow from financing activities (outflow) amounted to € 84.9 million in the reporting period (previous year: € 150.9 million), down € 66.0 million on the previous year. This was primarily due to new long-term financial loans taken out in the reporting period, lower payments for the redemption of financial loans than in the previous year and lower payments of profit shares to non-controlling shareholders and shareholders of the parent company.

The HHLA Group had sufficient liquidity as of year-end 2021. There were no liquidity bottlenecks in the course of the financial year. Financial funds totalled € 173.0 million as of 31 December 2021 (31 December 2020: € 168.8 million). Including all short-term deposits, the Group’s available liquidity as of year-end 2021 came to a total of € 238.0 million (previous year: € 208.8 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 € 334.6 million as of the balance sheet date, liabilities from bank loans were above the prior-year figure of € 295.1 million. The Group drew on financing of € 34.0 million in the 2021 financial year (previous year: none). Payments for the redemption of loans totalling € 24.3 million in the reporting period were below the prior-year figure as a result of unscheduled repayments in the previous year (previous year: € 37.2 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 almost exclusively in euros. In terms of conditions, approximately 85 % have fixed interest rates and some 15 % have floating interest rates. As a result of borrowing, certain affiliates had covenants linked to key balance sheet figures. These mostly require a minimum equity ratio or compliance with a maximum gearing ratio. Covenants are currently in place for approximately 25 % 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 € 442.8 million (previous year: € 457.1 million), mainly 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 € 155.5 million as of the balance sheet date (previous year: € 126.9 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 of the balance sheet date, the Group had unused credit facilities amounting to € 9.8 million (previous year: € 54.3 million). The credit line utilisation rate amounted to 33.1 %. The decrease resulted from the termination of a € 50.0 million credit line taken out as a precaution and unused in the 2020 financial year. Of the total cash and cash equivalents, an amount of € 4.4 million as of the reporting date (previous year: € 3.7 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

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 company was renamed HHLA PLT Italy S.r.l. on 7 January 2021. 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 company was assigned to the Container segment.

With the shareholding and partnership agreement of 16 December 2020, HHLA AG acquired 80.0 % of shares in iSAM AG, Mülheim an der Ruhr, and its three subsidiaries. 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 company was assigned to the Logistics segment.

With the partnership agreement of 14 December 2020 and a name change, HHLA AG set up the company HHLA Digital Next GmbH, based in Hamburg. The company’s objective is the development, spinning off, shareholding or acquisition, maintenance, administration and disposal of companies or participating interests in the fields of transport and logistics, particularly start-ups in the field of “trade and transport tech”. The company was assigned to the Logistics segment.

With the partnership agreement of 16 December 2021, METRANS a.s., Prague, Czech Republic, set up the company METRANS Zalaegerszeg Kft., based in Budapest, Hungary. The company’s objective is the acquisition of a plot of land. The company was assigned to the Intermodal segment. Notes to the consolidated financial statements, no. 3 Composition of the Group

There were no other significant acquisitions, changes in shareholdings in subsidiaries or changes to the consolidated group in the 2021 financial year. For details of company acquisitions after the balance sheet date, please refer to Events after the balance sheet date.