3. Make-up of the Group

Group of consolidated companies

The group of consolidated companies at HHLA comprises a total of 36 domestic and 27 foreign companies. For a complete list of equity investments in accordance with Section 313 (2) HGB, see also Note 48. Information required under IFRS 12.10 and IFRS 12.21 is included here.

Subsidiaries

The consolidated financial statements comprise the financial statements for HHLA AG 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 AG 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.

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. More detailed information is available in Note 25.

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, changes to shares in subsidiaries and other changes to the consolidated group

With the share purchase and transfer agreement dated 16 December 2021, METRANS a.s. of Prague, Czech Republic, acquired 100 % of the shares in CL EUROPORT s.r.o., based in Plzen, Czech Republic. The company holds 79.2 % of the shares in CL EUROPORT Sp. Z o.o. of Malaszewicze, Poland. The closing of the transaction (corresponding to the acquisition date) is tied to various conditions and took place on 4 January 2022. The first-time consolidation of the company took place on the acquisition date. The company has been assigned to the Intermodal segment. The company was incorporated into HHLA’s group of consolidated companies as of 31 March 2022.

With the share purchase and transfer agreement dated 16 December 2021, METRANS a.s. of Prague, Czech Republic, acquired 20.8 % of the shares in CL EUROPORT Sp. z o.o. of Malaszewicze, Poland. As a result of this transaction and the one mentioned above, METRANS a.s acquired 100 % of the shares in CL EUROPORT Sp. z o.o. The company’s purpose is to operate a container terminal offering intermodal services relating to the handling of container trains, road transport and container storage. The closing of the transaction (corresponding to the acquisition date) is tied to various conditions and took place on 4 January 2022. The first-time consolidation of the company took place on the acquisition date. The company has been assigned to the Intermodal segment. The company was incorporated into HHLA’s group of consolidated companies as of 31 March 2022.

The following tables depict the consideration transferred for the acquisition of the company as well as the values of the assets identified, and liabilities acquired, on the date of acquisition based on the acquisition of 100 % of the shares:

The derived goodwill in the amount of € 1,780 thousand reflects the opportunities for further expansion and therefore the future development of the container terminal as well as the exploitation of synergies and new entry points for the METRANS Group’s existing network. The goodwill has been allocated to the Intermodal segment, and specifically to the cash-generating unit METRANS. It is not anticipated that a portion of the recorded goodwill will be tax deductible.

The fair value of trade receivables amounts to € 520 thousand and is collectable in full.

Between 1 January and 31 December 2022, the acquired business operations contributed to the HHLA Group’s result with revenue of € 6,663 thousand and a profit after tax of € 1,355 thousand.

The transaction costs associated with the acquisition were immaterial.

With the share purchase and transfer agreement dated 22 December 2022, HHLA Next GmbH acquired a 51.0 % stake in Survey Compass GmbH of Treben. The object of the company is the provision of online content, the transfer of software and hardware and consultancy in the logistics and transport industry (focusing on railways, ships, aircraft and trucks) as well as associated industries. The closing of the transaction (corresponding to the acquisition date) is tied to various conditions and took place on 17 January 2023, after the balance sheet date. The first-time consolidation of the company took place on the acquisition date. The purchase price (transferred consideration) was paid in euros.

A capital increase in the amount of € 2,000 thousand was carried out in connection with the acquisition of the shares and added to subscribed capital and the capital reserves.

The following tables depict the consideration transferred for the acquisition of the company and the values of the assets identified, and liabilities acquired, on the date of acquisition based on the acquisition of 51.0 % of the shares:

The amount of the contingent consideration, with a maximum amount of € 1,500 thousand, is based on the achievement of individual targets that are independent of each other (milestones) and measured at a respective partial amount. The fair value of the contingent con­sideration was discounted at a discount rate of 12.5 to 12.8 % and totals € 1,131 thousand.

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 basis. The final measurement has yet to be completed and may lead to chan­ges in the fair values of the assets and liabilities. This would result in a change in goodwill.

The preliminary derived goodwill in the amount of € 3,623 thousand reflects the opportunities for further expansion and therefore the future development of the company as well as the exploitation of synergies for the business of HHLA Next GmbH. The goodwill is allocated to the Logistics segment. It is not anticipated that a portion of the recorded goodwill will be tax deductible.

The intangible assets acquired essentially related to the software solutions developed by the company in the course of container asset management.

The fair value of trade receivables amounts to € 54 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 € 1,339 thousand based on the acquisition of 51.0 % of the shares. This valuation is based on the same criteria used to value the acquired assets and liabilities.

The transaction costs associated with the acquisition were immaterial.

With the share purchase and transfer agreement dated 9 May 2022, the share held by METRANS a.s. of Prague, Czech Republic, in METRANS Rail Profi Austria GmbH, Krems an der Donau, Austria, increased from 80.0 % to 100 % because METRANS a.s. acquired the remaining shares from the minority shareholder. In accordance with the entity concept, the purchase price for these shares was taken directly to equity with a corresponding reduction in non-controlling interests.

As of 31 March and 30 June 2022 respectively, the following companies which were established in the 2021 financial year were incorporated into HHLA’s group of consolidated companies: METRANS Szeged Kft., based in Budapest, Hungary, and allocated to the Intermodal segment as well as HHLA Next GmbH and omoqo GmbH, both based in Hamburg, both of which were allocated to the Logistics segment.

With the partnership agreement of 26 October 2022, HHLA AG founded the company CERP Solution a.s., Prague, Czech Republic, and acquired all shares in the company. The purpose of the company includes the leasing of land and the rental and hire of movable property. Its inclusion in the HHLA group of consolidated companies took place on 31 December 2022 as a fully consolidated subsidiary assigned to the Logistics segment.

By way of a resolution dated 21 October 2022, the Lüneburg Local Court was ordered to initiate insolvency proceedings against Bionic Production GmbH of Lüneburg at the company’s own request. As a result of this, HHLA surrendered control of the company and the company was deconsolidated at the same time. This resulted in a loss of € 1,517 thousand which was recognised directly in equity. Income of € 126 thousand recognised through profit and loss in other operating income was also generated.

Impairment effects arising in connection with this are explained under Note 6.

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