3. Make-up of the Group

Group of consolidated companies

The number of domestic and foreign companies belonging to the HHLA Group of consolidated companies can be seen in the table below. For a complete list of equity investments in accordance with Section 313 (2) HGB, see also Note 48. Information required under IFRS 12.10 a) and IFRS 12.21 a) 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 impact 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.

Subsidiaries with substantial non-controlling interests are defined under HHLA AG’s internal criteria as follows:

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 joint companies or 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 initially 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 22 December 2022, HHLA Next GmbH, Hamburg, Germany, acquired a 51.0 % stake in Survey Compass GmbH, Treben, Germany. 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) was tied to various conditions and took place on 17 January 2023. The first-time consolidation of the company took place on the acquisition date. The company is assigned to the Logistics segment. The company was incorporated into HHLA’s group of consolidated companies as of 31 March 2023. 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 reserve.

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 100.0 % 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 (milestone payments primarily for new customer acquisition, for profit performance and for product development/positioning in the market) that are independent of each other 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 € 1,061 thousand.

The 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 which were measured using capital value-based procedures with the licence price analogy method.

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.

Between 1 January and 31 December 2023, the acquired business operations contributed to the HHLA Group’s result with revenue of € 164 thousand and a loss after tax of € 417 thousand.

The transaction costs associated with the acquisition were immaterial.

With a share purchase and transfer agreement dated 2 March 2023, the subsidiary METRANS a.s., Prague, Czech Republic, acquired a 51.0 % stake in Adria Rail d.o.o., Rijeka, Croatia. This company has two subsidiaries (Adria Rail operator d.o.o., Rijeka, Croatia, and DRUŠTVO ZA INTERMODALNI PREVOZ I USLUGE ADRIA RAIL DOO INDIJA, Indija, Serbia); in each case with a shareholding of 100 %. The purpose of the company is to provide forwarding and transport services with daily rail operations between the port of Rijeka and Serbia. The closing of the transaction (corresponding to the acquisition date) took place on 2 March 2023. 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 2023.

The transferred consideration (basic purchase price) was € 2,000 thousand and was paid in euros.

The following table depicts 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 as of 31 December 2023 in the new amount of € 1,118 thousand reflects the opportunities for further expansion and therefore the future development of the company 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 METRANS cash-generating unit. It is not anticipated that a portion of the recorded goodwill will be tax deductible.

The fair value of trade receivables amounts to € 2,044 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 € 847 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.

Between 2 March and 31 December 2023, the acquired business operations contributed to the HHLA Group’s result with revenue of € 8,151 thousand and a loss after tax of € 298 thousand. Had the acquisition taken place on 1 January 2023, consolidated revenue of € 10,021 thousand and a consolidated loss of € 237 thousand would have been recognised in the consolidated income statement. When calculating these amounts, management has assumed that the adjustments to fair values performed as of the acquisition date would still have remained valid in the event of an acquisition on 1 January 2023.

The transaction costs associated with the acquisition were immaterial.

Due to the course of business of the company DRUŠTVO ZA INTERMODALNI PREVOZ I USLUGE ADRIA RAIL DOO INDIJA, Indija, Serbia, in the fourth quarter of 2023, this company was incorporated into HHLA’s group of consolidated companies as of 31 December 2023. The company has been assigned to the Intermodal segment.

As of 31 March 2023, METRANS Rail sp. z.o.o., Gadki, Poland, which was newly established in the 2022 financial year, was incorporated into HHLA’s group of consolidated companies in full for the first time as part of the Intermodal segment.

The company HHLA Container Terminal Altenwerder GmbH, Hamburg (CTA), in which HHLA AG holds 74.9 % of the shares, transferred all its shares in SCA Service Center Altenwerder GmbH, Hamburg, Germany, (SCA), to HHLA AG effective 1 January 2023. The indirect shareholding in SCA’s capital thus increased from 74.9 % to a direct shareholding of 100 %.

The disposal date of the share disposal agreement for a non-controlling interest of 24.99 % in HHLA Container Terminal Tollerort GmbH, Hamburg (CTT) concluded on 19 June 2023 between HHLA AG and Grand Dragon Investment Enterprise Limited, Hong Kong, China, a subsidiary of COSCO SHIPPING Ports Limited, Hong Kong, China (CSPL), is 20 June 2023. This change in the HHLA Group’s shareholding in a subsidiary is recognised directly in equity as an equity transaction as it does not lead to a loss of control. The transaction costs of this equity transaction are likewise to be recognised directly in equity as a deduction from the capital reserve.

A profit transfer agreement is in place between HHLA AG and CTT until 31 December 2023. On the basis of the purchase agreement, HHLA AG pledges to pay a pro rata settlement liability to the non-controlling shareholder in the event of a positive annual result and likewise is entitled to a pro rata settlement receivable in the event of a negative annual result for the 2023 financial year. HHLA AG’s entitlement to a receivable for the expected negative annual result in 2023 was recognised directly in equity at the time of the disposal in the amount of € 951 thousand and, as a financial receivable, increased the non-controlling interests in equity accordingly. More detailed information is available in Note 35.

The recognition of the disposal of the shares directly in equity is reported separately in the statement of changes in equity.

In connection with the sale of the shares, an existing shareholder loan of HHLA AG was assumed on a pro rata basis by the non-controlling shareholder in the amount of € 19,992 thousand, see Note 38.

With the share purchase and transfer agreement dated 31 July 2023, HHLA PLT Italy S.r.l., Trieste, Italy (PLT), acquired a 100.0 % stake in Logistica Giuliana S.r.l., Trieste, Italy (LG). The purpose of the company is business operations as a port enterprise, which mainly comprises the land and seaborne handling and storage of goods as well as the provision of other related port logistics services. The closing of the transaction (corresponding to the acquisition date) was tied to various conditions and took place on 14 December 2023. With this transaction, the interest held by HHLA International GmbH, Hamburg (HIG), in PLT increased from 50.01 to 75.00 %. The first-time consolidation of the company took place on the acquisition date. The company is assigned to the Container segment. The company was incorporated into HHLA’s group of consolidated companies as of 31 December 2023.

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 100.0 % of the shares:

The fair values of the acquired assets and assumed debts 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.

With 75.00 % attributed to HIG and thus the parent company on a pro rata basis, the provisionally derived goodwill of € 15,587 thousand reflects the opportunities for further expansion at the Trieste site and the exploitation of synergies within the network and with the neighbouring PLT terminal, as well as with other companies within the HHLA Group. The goodwill has been allocated to the Container segment. PLT and LG form a cash-generating unit in this regard. It is not anticipated that a portion of the recorded goodwill will be tax deductible.

The intangible assets acquired item includes the capitalisation of demolition costs from the as yet incomplete demolition of a steelworks on a land concession.

The property, plant and equipment acquired mainly covers right-of-use assets represented by the concession for the operation of the port terminal.

The non-current liabilities acquired pertain both to loans associated with the property, plant and equipment acquired, and to leases.

The current liabilities assumed mainly relate to an outstanding purchase price payment.

The fair value of trade receivables amounts to € 327 thousand and is collectable in full.

Between 14 December and 31 December 2023, the acquired business operations contributed to the HHLA Group’s result with revenue of € 0 thousand and a loss after tax of € 111 thousand. Had the acquisition taken place on 1 January 2023, consolidated revenue of € 0 thousand and a consolidated loss of € 316 thousand would have been recognised in the consolidated income statement. When calculating these amounts, management has assumed that the adjustments to fair values performed as of the acquisition date would still have remained valid in the event of an acquisition on 1 January 2023.

The transaction costs associated with the acquisition came to € 629 thousand.

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