35. Equity

Changes in the individual components of equity for the reporting year 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 2022: € 75,220 thousand), divided into 72,514,938 class A shares (31 December 2022: 72,514,938 class A shares) and 2,704,500 class S shares (31 December 2022: 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, corresponding 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 2022: 70.35 %).

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), the Executive Board is authorised, subject to the approval of the Supervisory Board, to increase the company’s share capital until 15 June 2027 by up to € 36,257,469.00 by issuing up to 36,257,469 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 are 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, as in the issuance of 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 10 % of the share capital attributable to class A shares. All class A shares issued, or which could be issued under other authorisations with the exclusion of subscription rights, count towards this 10 % 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 15 June 2027 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 are 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 collectively referred to 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 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 9 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.

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 includes 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 also includes 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 from the translation of financial statements for foreign subsidiaries.

Non-controlling interests

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

During the reporting year, non-controlling interests decreased largely due to the distribution of dividends in the amount of € 42,755 thousand. The profit after tax attributable to the non-controlling interests had an opposing effect.

As per the provisions of IAS 32, non-controlling interests are reduced mainly by the reclassification of a minority shareholder’s future estimated entitlements to financial settlements as financial liabilities for the term of the profit and loss transfer agreement concluded in the reporting year, see Note 6.

HHLA AG’s entitlement to a receivable for the expected negative annual result in 2023 was also recognised directly in equity and, as a financial receivable, increased the non-controlling interests in equity accordingly, see Note 3.

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 safeguard the Group’s growth from a financial viewpoint while enabling shareholders to participate in its success to a reasonable degree. 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). ROCE decreased to 4.6 % during the reporting year (previous year: 9.7 %). The equity ratio is also monitored in order to maintain a stable capital structure.

The reduction in equity was mainly due to the distribution of dividends in the amount of € 103,091 thousand and a reserve of the same amount of € 28,991 thousand relating to the put option granted to non-controlling interests, see Note 38. The positive figure for total comprehensive income during the reporting period, as well as the revenue gains and losses from the change in the Group’s shareholding in a subsidiary that did not lead to a loss of control (recognised directly in equity as an equity transaction from the sale of shares to a fully consolidated company) had an opposing effect in the amount of € 43,972 thousand, see Note 3. By way of the acquisition of the stake in Logistica Giuliana S.r.l., Trieste, Italy, by HHLA PLT Italy S.r.l., Trieste, Italy (PLT), for a purchase price of € 8,000 thousand, HHLA International GmbH, Hamburg, increased its shareholding in PLT and implemented a capital increase of € 24,022 thousand in which the non-controlling shareholder of PLT participated in the amount of € 6,006 thousand. The purchase price and capital increase of the non-controlling shareholder are recognised as a loss under equity as the acquisition of non-controlling interests in consolidated companies in the amount of € 14,006 thousand. The capital increase of shares in affiliated companies, primarily as a result of the transaction described above, results in a corresponding increase in the non-controlling interests. More detailed information in this regard can be found in Note 3.

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