Corporate and value management
HHLA’s primary financial objectives include the long-term, sustainable growth of its enterprise value. 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 2021 financial year.
Financial performance indicators
The key operational management parameters used by the HHLA Group are the operating result (EBIT) and the average operating assets (capital employed). EBIT and capital expenditure as key drivers of the average capital employed are the main intra-year and short-term performance indicators. Return on capital employed (ROCE) is calculated for the measurement of long-term, value-oriented performance and is also used to determine the annual value added. The HHLA Group calculates ROCE as a ratio of the operating result and the average operating assets used.
Value management
ROCE – defining parameters and influential factors
Commercial activities are generally regarded as value-generating if ROCE exceeds the cost of capital and they 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 8.5 % before tax to calculate value growth at Group level in the 2021 financial year. This minimum interest rate reflects the Executive Board’s assessment of a medium- to long-term rate of return arising from a balanced relationship between equity and borrowed capital. This approach avoids short-term fluctuations in interest rates on the capital markets that may distort the information provided by the value management system.
Despite the ongoing challenges in the economic environment and the global coronavirus pandemic, the HHLA Group increased its EBIT result by 84.7 % year-on-year to € 228.2 million in the 2021 financial year (previous year: € 123.6 million). Earnings position
Average operating assets rose by 3.9 % to € 2,162.3 million (previous year: € 2,081.3 million). Financial position
As a result, return on capital employed rose by 4.7 percentage points year-on-year to 10.6 % (previous year: 5.9 %). The defined minimum ROCE of 8.5 % was therefore exceeded by 2.1 percentage points. The HHLA Group thus achieved a positive value added of € 44.4 million in the reporting period (previous year: € - 53.3 million).
in € million |
|
2021 |
|
2020 |
|
Change |
|||
|---|---|---|---|---|---|---|---|---|---|
Operating income |
|
1,524.6 |
|
1,355.3 |
|
12.5 % |
|||
Operating expenses |
|
- 1,296.4 |
|
- 1,231.7 |
|
5.3 % |
|||
EBIT |
|
228.2 |
|
123.6 |
|
84.7 % |
|||
Ø Net non-current assets |
|
2,054.6 |
|
1,971.3 |
|
4.2 % |
|||
Ø Net current assets |
|
107.7 |
|
110.0 |
|
- 2.1 % |
|||
Ø Operating assets |
|
2,162.3 |
|
2,081.3 |
|
3.9 % |
|||
ROCE in % |
|
10.6 |
|
5.9 |
|
4.7 pp |
|||
Capital costs before tax1 in % |
|
8.5 |
|
8.5 |
|
0 pp |
|||
Capital costs before tax |
|
183.8 |
|
176.9 |
|
3.9 % |
|||
Value added in % |
|
2.1 |
|
- 2.6 |
|
4.7 pp |
|||
Value added |
|
44.4 |
|
- 53.3 |
|
pos. |
|||
|
|||||||||
Non-financial performance indicators
The main non-financial performance indicators are container throughput and container transport volumes. In addition to the continuous dialogue that HHLA maintains with its customers, the company makes extensive use of macroeconomic forecasts as early indicators for volume trends and 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 flows, as well as for container traffic on relevant routes and changes in the correlation between gross domestic product and containerised trading volumes.
Earnings before interest and taxes.
Average net non-current assets (intangible assets, property, plant and equipment, investment property) + average net current assets (inventories + trade receivables – trade liabilities).
EBIT / Average operating assets.
Production value – intermediate inputs (cost of materials, depreciation and amortisation, and other operating expenses); the value added generated is shared between the HHLA Group’s stakeholders, such as employees, shareholders, lenders and the local community.
Expenses associated with the use of funds as equity or borrowed capital.
EBIT / Average operating assets.