3. Make-up of the Group

Consolidated companies

The group of consolidated companies at HHLA comprises a total of 30 domestic and 16 foreign companies. For a complete list of equity investments in accordance with Section 313 (2) HGB, see also Note 48. The information provided here about the equity and annual net profit recorded by the various companies is taken from the respective annual financial statements, which were prepared in line with national accounting regulations. Information required under IFRS 12.10 and IFRS 12.21 is also included in the details of shareholdings.

Subsidiaries

The Consolidated Financial Statements comprise the financial statements for Hamburger Hafen und Logistik Aktiengesellschaft (HHLA) 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 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.

Non-controlling interests are valued at the time of acquisition using the relevant share of the acquired company’s identifiable net assets. Changes in the Group’s shareholding in a subsidiary which do not lead to a loss of control are recorded in the balance sheet as equity transactions.

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.

The HHLA Group holds more than half of the voting rights in the companies HHLA Frucht- und Kühl-Zentrum GmbH, Ulrich Stein Gesellschaft mit beschränkter Haftung and HVCC Hamburg Vessel Coordination Center GmbH, yet has no controlling influence as the companies are effectively jointly managed. This is due primarily to the equal representation of the essential corporate bodies (management and/or Supervisory Board).

No unrecorded losses relating to joint ventures were incurred either in the reporting year or on a cumulative basis.

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.

Company acquisitions, disposals and other changes to the group of consolidated companies

The company TIP Žilina, s.r.o., Dunajska Streda, Slovakia, was included in the HHLA group of consolidated companies for the first time in the first quarter of 2019. This company was founded in 2017 and began operating in the second quarter of 2019.

With the participation and shareholder agreement of 20 December 2018, HHLA acquired 25.1 % of the shares in Spherie UG (haftungsbeschränkt), Hamburg, as of the transfer date on 1 January 2019. The object of the company is the development, production and distribution of aerial systems exclusively for the capture of 360º sensor data, as well as services connected with the aerial systems to capture 360º sensor data. The company was included in HHLA’s Consolidated Financial Statements in the first quarter of 2019 using the equity method and is assigned to the Logistics segment.

On 22 March 2019, HHLA signed a share purchase agreement to acquire 50.1 % of the shares in Bionic Production AG, a non-listed company based in Lüneburg, Germany. The company is active in the field of construction, design and the manufacture of components made using laser additives via 3-D printing technologies. The closing of the transaction (i.e. acquisition date) was tied to various closing conditions and took place on 31 July 2019. The first-time consolidation of the company took place on the acquisition date. The company was therefore fully consolidated for the first time on 30 September 2019. Effective 29 August 2019, the company became a Gesellschaft mit beschränkter Haftung and is now registered as Bionic Production GmbH.

The following tables summarise the consideration transferred for the acquisition of the company and the values of the assets identified, and liabilities acquired, on the date of acquisition:

The basic purchase price of € 6,100 thousand is payable between 2019 and 2023 in five tranches at intervals of twelve months each, with the first tranche payable on 31 July 2019. The calculation of the recognised present value is based on a discount rate of 0.44 %.

The amount of the contingent consideration, with a maximum amount of € 7,000 thousand, is based on the cumulative total of EBITs for the financial years 2021 up to and including 2023. The fair value of the contingent consideration was discounted at a discount rate of 11.28 % and stands at € 3,934 thousand. The total value of estimated EBITs is below the EBIT targets set.

Likewise, the vendor makes the irrevocable offer to the buyer that the buyer may also gradually buy all or some of the shares held by the vendor in the company. The buyer may exercise the call option at its actual value at any time before 30 June 2024.

The derived goodwill in the amount of € 9,019 thousand reflects the further technological development and the planned establishment and expansion of customer relations in light of the anticipated market penetration of 3-D printing technologies. HHLA can therefore share in new technologies which have the potential to be deployed in the wider port and logistics sector in the future. The goodwill has been allocated to the Logistics segment. It is not anticipated that a portion of the recorded goodwill will be tax deductible.

The acquired technologies in the amount of € 3,505 thousand relate to solutions in the fields of 3-D printing and intelligent welding.

The fair value of trade receivables amounts to € 512 thousand and is collectable in full.

The fair value of non-controlling interests recorded during the company acquisition stands at € 973 thousand. This valuation is based on the same criteria that were used to value the acquired assets and liabilities.

Between 31 July and 31 December 2019, the acquired business operations contributed to the HHLA Group’s result with revenue of € 847 thousand and a loss of € 745 thousand. Had the acquisition taken place on 1 January 2019, the consolidated revenue in the consolidated income statement would have been € 415 thousand higher and the consolidated loss would have been € 1,081 thousand higher. When calculating these amounts, the Executive Board 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 2019.

On 18 November 2019, HHLA and Hyperloop Transportation Technologies, Inc., Culver City, US, founded the Hamburg-based company Hyperport Cargo Solutions GmbH i.G. Each company holds a 50.0 % share. The company’s objective is to develop, manufacture, implement, market, sell and distribute hyperloop technology and thus also related technologies for transporting sea freight containers with regard to seaports and hinterland container transports. The joint venture was included in HHLA’s Consolidated Financial Statements at year-end using the equity method and is assigned to the Logistics segment.

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