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The prime strategic objective of the Hapag-Lloyd Group is to achieve long-term profitable growth measured on the basis of the development in transport volume, the key performance indicators EBITDA and EBIT as well as the return on invested capital (ROIC).
Hapag-Lloyd is aiming for a global market share (excl. Intra-Asia) of around 10%. As at 31 December 2020, the market share (excl. Intra-Asia) was approximately 10.9% (previous year: 10.4%). Hapag-Lloyd plans to grow with the market and thereby retain its market share. In addition, Hapag-Lloyd wants to increase its presence in attractive growth markets, and in the area of special cargo in particular.
The Group’s financial key performance indicators for its operating business are EBITDA and EBIT. EBIT is an important indicator for measuring sustainable earnings, while EBITDA is an important indicator for measuring gross cash flows, and is also used as an important key performance indicator for investment and financial decisions.
The main factors influencing the development of the operating result indicators are transport volume, freight rate, the US dollar exchange rate against the euro and operating costs including bunker price.
As part of Strategy 2023, Hapag-Lloyd is pursuing profitability throughout the entire economic cycle. This is reflected in a suitable return on invested capital (ROIC), one that at least matches the company’s weighted average cost of capital.
The return on invested capital (ROIC) in the 2020 financial year was 10.6%, following 6.1% in the previous year.
The weighted average cost of capital after income taxes is 6.0% as of the balance sheet date (as per 31 December 2019: 6.8%).
Hapag-Lloyd aims to have an equity ratio of over 45%. We plan to reach this target by partly retaining profits generated. As at 31 December 2020, improved results had led the equity ratio to increase to 44.3% (previous year: 40.9%), meaning we are already close to achieving the target ratio.
The liquidity reserve should be at least 1.1 billion USD. At the end of 2020 liquidity was above the previous year’s level at 1.2 billion euros (previous year: 1.0 billion euros).
The Executive Board of Hapag-Lloyd AG first reported on the Group’s new strategy (“Strategy 2023”) at a capital market day in November 2018. Strategy 2023 is also described in detail on pages 58 ff. of the Group management report in the 2019 annual report.
The 3 core objectives of Strategy 2023 are:
The focus of Strategy 2023 is on becoming number one for quality and achieving profitable growth. The basis is continuous and consistent cost and revenue management as well as improving internal processes through greater agility and taking advantage of technological opportunities, such as digitalisation and automation. The most important elements of Strategy 2023 are presented in the following illustration. The focus here is on clearly differentiating the Company from its competitors.
Strategy 2023, including the aforementioned targets and goals, will become even more concrete as the strategy is implemented and it will be flexibly adapted to the changing operating environment.
At the beginning of the second half-year, global demand for container transport remains at a high level. At the same time, operational disruptions along the entire supply chain continue to cause significant delays and thereby contribute to the shortage of available transport capacity. Hapag-Lloyd therefore expects earnings momentum to remain very strong in the second half of the financial year. Previously, a gradual normalisation of the earnings trend had been expected for the second half-year.Given these circumstances, the Executive Board of Hapag-Lloyd raised its earnings outlook for the 2021 financial year on 30 July 2021. EBITDA is now expected to be in the range of USD 9.2 to 11.2 billion or EUR 7.6 to 9.3 billion (previously: clearly above previous year) and EBIT in the range of USD 7.5 to 9.5 billion or EUR 6.2 to 7.9 billion (previously: clearly above previous year), respectively.
The earnings expectation for the 2021 financial year is based in particular on the assumptions that the transport volume can be increased slightly and the average freight rate clearly compared to the previous year. At the same time, a clear increase in the average bunker consumption price is assumed, which should have a dampening effect on the development of earnings. Our earnings perspective is based on the assumption of an average exchange rate of USD 1.21 / EUR.
In view of the current above-average high volatility of freight rates, operational challenges due to existing infrastructural bottlenecks and the unpredictable further course of the COVID-19 pandemic and its economic effects, the forecast is subject to considerable uncertainty.
|Key benchmark figures for the 2021 outlook||Actual 2020||Previous Forecast 2021||Forecast 2021|
|Global economic growth (IMF, July 2021)||-3.2%||6.0%||6.0%|
|Increase in global trade (IMF, July 2021)
|Increase in global container transport volume (Seabury, June 2021)||-1.0%||6.3%||6.3%|
|Transport volume, Hapag-Lloyd Group
||TEU 11.8 million||Increasing slightly||Increasing slightly|
|Average bunker consumption, Hapag-Lloyd Group||USD 379/t
||Increasing clearly||Increasing clearly|
|Average freight rate, Hapag-Lloyd Group||USD 1,115/TEU||Increasing clearly||Increasing clearly|
|EBITDA (earnings before interest, taxes, depreciation and amortisation), Hapag-Lloyd Group||USD 3.1 billion
(EUR 2.7 billion)
|Increasing clearly||USD 9.2 - 11.2 billion
(EUR 7.6 - 9.3 billion)
|EBIT (earnings before interest and taxes), Hapag-Lloyd Group||USD 1.5 billion
(EUR 1.3 billion)
|Increasing clearly||USD 7.5 - 9.5 billion
(EUR 6.2 - 7.9)