ANNUAL REPORT HAMBURGER HAFEN UND LOGISTIK 2019 AKTIENGESELLSCHAFT HHLA segments HHLA segments Container Intermodal 799.7 Mio. € 58 % 486.9 Mio. € 35 % Revenue Share of revenue Revenue Share of revenue HHLA’s container terminals link ships, rail networks and HHLA’s rail companies operate a comprehensive transport trucks to create an efficient transport chain. The terminals in and terminal network for container transportation and Hamburg form the most important European hub between connect ports on the North and Baltic seas, as well as the Asia and Central/Eastern Europe. HHLA also operates a northern Adriatic, with their hinterland. Transshipments container terminal in the Ukrainian city of Odessa as well in by truck within the Port of Hamburg round off the service the Estonian city of Tallinn. portfolio. Key figures Key figures in € million 2019 2018 Change in € million 2019 2018 Change Revenue 799.7 758.9 5.4 % Revenue 486.9 433.8 12.3 % EBITDA 240.2 209.8 14.5 % EBITDA 139.0 112.7 23.3 % EBITDA margin in % 30.0 27.6 2.4 pp EBITDA margin in % 28.6 26.0 2.6 pp EBIT 141.3 131.6 7.4 % EBIT 99.2 89.1 11.3 % EBIT margin in % 17.7 17.3 0.4 pp EBIT margin in % 20.4 20.5 - 0.1 pp Container throughput in thousand TEU 7,577 7,3 3 6 3.3 % Container transport in thousand TEU 1,565 1,480 5.7 % Revenue Revenue in € million in € million 800 747 759 675 695 487 414 434 364 390 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 HHLA ANNUAL REPORT 2018 HHLA segments Logistics Real Estate 59.0 Mio. € 4 % 40.2 Mio. € 3 % Revenue Share of revenue Revenue Share of revenue In this segment, HHLA pools a wide range of port-related Following the sustainable renovation of Hamburg’s services such as dry bulk, vehicle and fruit logistics. Its landmarked Speicherstadt historical warehouse district service portfolio comprises both stand-alone logistics to create an exemplary redeveloped quarter, HHLA is services (including airborne services) and entire process committed to intelligent site development and preserving the chains. HHLA also markets its expertise in infrastructure city’s fishing tradition with the Hamburg-Altona fish market. and project development internationally. Key figures Key figures in € million 2019 2018 Change in € million 2019 2018 Change Revenue 59.0 59.8 - 1.4 % Revenue 40.2 39.3 2.5 % EBITDA 8.5 10.0 - 15.5 % EBITDA 23.9 20.7 15.5 % EBITDA margin in % 14.3 16.7 - 2.4 pp EBITDA margin in % 59.4 52.7 6.7 pp EBIT 2.5 5.6 - 55.1 % EBIT 16.5 15.5 6.5 % EBIT margin in % 4.3 9.4 - 5.1 pp EBIT margin in % 40.9 39.4 1.5 pp At-equity earnings 3.9 4.4 - 12.1 % Revenue Revenue in € million in € million 65 60 59 38 38 39 40 55 51 36 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 HHLA ANNUAL REPORT 2018 HHLA key figures HHLA key figures HHLA Group in € million 2019 2018 Change Revenue and earnings Revenue 1,382.6 1,291.1 7.1 % EBITDA 382.6 318.5 20.2 % EBITDA margin in % 27.7 24.7 3.0 pp EBIT 221.2 204.2 8.3 % EBIT margin in % 16.0 15.8 0.2 pp Profit after tax 137.1 138.5 - 1.0 % Profit after tax and minority interests 103.3 112.3 - 8.0 % Cash flow statement and investments Cash flow from operating activities 322.7 232.7 38.7 % Investments 224.9 141.3 59.2 % Performance data Container throughput in thousand TEU 7,577 7,336 3.3 % Container transport in thousand TEU 1,565 1,480 5.7 % in € million 31.12.2019 31.12.2018 Change Balance sheet Balance sheet total 2,610.0 1,972.9 32.3 % Equity 578.9 614.8 - 5.9 % Equity ratio in % 22.2 31.2 - 9.0 pp Employees Number of employees 6,296 5,937 6.0 % Port Logistics subgroup1, 2 Real Estate subgroup1, 3 in € million 2019 2018 Change 2019 2018 Change Revenue 1,350.0 1,258.5 7.3 % 40.2 39.3 2.5 % EBITDA 358.7 297.8 20.5 % 23.9 20.7 15.5 % EBITDA margin in % 26.6 23.7 2.9 pp 59.4 52.7 6.7 pp EBIT 204.4 188.4 8.5 % 16.5 15.5 6.5 % EBIT margin in % 15.1 15.0 0.1 pp 40.9 39.4 1.5 pp Profit after tax and minority interests 93.6 102.9 - 9.0 % 9.7 9.4 3.0 % Earnings per share in €4 1.34 1.47 - 9.0 % 3.57 3.46 3.0 % Dividend per share in €5 0.70 0.80 - 12.5 % 2.10 2.10 0.0 % 1 Before consolidation between subgroups 2 Listed class A shares 3 Non-listed class S shares 4 Basic and diluted 5 Dividend proposal for 2019 HHLA ANNUAL REPORT 2019 Contents 1 Contents To our shareholders 2 Financial statements 66 2 The Executive Board 66 Detailed index consolidated financial statements 3 Members of the Executive Board 67 Income statement 4 Report of the Supervisory Board 67 Statement of comprehensive income 8 Members of the Supervisory Board 70 Balance sheet 9 The HHLA share 73 Cash flow statement 76 Statement of changes in equity Combined management report 12 82 Segment report 12 Group overview 84 Notes to the consolidated financial statements 14 Market position Annual financial statements of HHLA AG 152 16 Customer structure and sales 17 Legal framework Independent auditor’s report 155 18 Corporate strategy 20 Corporate and value management Assurance of the legal representatives 160 21 Research and development 23 Purchasing and materials management Sustainability 161 24 Sustainable performance indicators 24 Non-financial eportr 161 Statement from the Chairwoman of the Executive Board 24 Employees 162 Balanced Logistics 26 Economic environment 164 Sustainability strategy 27 Course of business and economic situation 164 Sustainability organisation and dialogue 27 Overall view of the course of business 165 Principles and reporting standards 28 Notes on the reporting 168 Materiality analysis 28 Earnings position 171 Ecology 30 Financial position 175 Society 33 Segment performance 178 Economy 33 Container segment 179 Governance 34 Intermodal segment 182 Audit opinion 35 Logistics segment Further information 184 35 Real Estate segment 36 Events after the balance sheet date 184 Glossary 36 Business forecast 186 Financial calendar 38 Risk and opportunity report HHLA multi-year overview 46 Corporate governance 46 Corporate management declaration 56 Remuneration report 60 Additional information on takeover law and explanatory notes 63 Notes to the separate financial statements for HHLA prepared in line with the German Commercial Code (HGB) 65 Statement of the Executive Board This Annual Report was published on 25 March 2020. report.hhla.de/annual-report-2019 HHLA ANNUAL REPORT 2019 2 To our shareholders Letter to the shareholders To our shareholders Ladies and gentlemen, Even before the outbreak of the coronavirus pandemic, the basis for our business was already changing at a faster pace than The crisis triggered by the coronavirus has reached a dimension before. Following a period of concentration and consolidation, at the beginning of the 2020 financial year that has rarely been our customers now have greater market power, and are also seen before in the recent past. At breath-taking speed, public life exploiting it. As a result, competition between ports has inten- has had to be restricted in order to at least slow the spread of the sified. Although Germany is a leading industrial nation and an pandemic. The consequences of this necessary interruption to important hub for the handling of goods and commodities, this our usual processes cannot yet be reliably estimated. As a service does not automatically mean that trade routes will pass through provider for the industrial nation Germany, Hamburger Hafen und the port of Hamburg. The volatility of international trade relations Logistik AG (HHLA) has a special responsibility for maintaining also influences our business. supplies to people and companies. Essential goods and commo- dities are handled via HHLA's container terminals in the ports of Exceptional circumstances call for exceptional measures. The Hamburg, Odessa and Tallinn or transported by the trains of our German government, the EU Commission and the ECB have rail subsidiary Metrans. We supply Germany and many parts of all promised substantial financial aid for companies. Rapid and, Europe – safely and reliably. above all, unbureaucratic assistance will be necessary so that economic life can quickly return to normal after successfully com- bating the corona pandemic. Naturally, this crisis also offers op- In its 135-year history, HHLA has mastered portunities. We at HHLA want to seize them. many a crisis. With our experience and knowledge, we will once again work Despite the drastic deterioration in the market environment, we with determination and courage for a will therefore continue to work resolutely on achieving our strate- gic goals. To this end, we will make particular use of the oppor- successful future. tunities offered by digitalisation. HHLA is already driving the port’s digital transformation. This is demonstrated by the numerous pro- This is something we once again successfully achieved in the jects we have developed either alone or with our partners. HHLA financial year 2019. We not only met the targets set in our guidan- turns ideas into initiatives which – in addition to our traditional ce, but in some cases even exceeded them.