The prime strategic objective of the Hapag-Lloyd Group is to achieve long-term profitable growth measured on the basis of developments in the transport volume and the key performance indicators of EBITDA and EBIT.
In terms of increasing its transport volume, Hapag-Lloyd achieved growth of more than 50% over the past seven years.
This was due mainly to the takeover of CSAV’s container shipping activities in December 2014, but also to the rising global demand for container shipping services.
In the 2017 financial year our focus will be on:
In the preceding years, Hapag-Lloyd implemented extensive synergy, cost-saving and efficiency programmes. The most important programmes – CUATRO, OCTAVE and Close the Cost Gap – were successfully implemented in 2016 and made a considerable contribution to the positive operating result (EBIT).
The CUATRO and OCTAVE projects alone are expected to deliver annual synergies, efficiency improvements and cost savings totalling USD 600 million from 2017 as against the comparable cost base in the 2014 financial year, and assuming that external factors remain the same. More than 90% of the expected annual synergies, efficiency improvements and cost savings were realised in the 2016 financial year. Additional cost reductions and efficiency gains should be achieved in 2017 as a result of the additional efficiency project OCTAVE II which continues on the work streams of OCTAVE.
Despite the significant improvement in cost structures, the original targets of recording a sustainable EBITDA margin of 11–12% from 2017 and generating a return on invested capital [ROIC] which equals the weighted average cost of capital in 2017 cannot be met from today’s perspective. The reasons for this are ongoing challenges in the industry environment and the planned integration of UASC’s business activities in 2017. In 2016, the Hapag-Lloyd Group recorded a ROIC of 1.3%. The capital costs came to 8.2%. After the integration of UASC is complete, Hapag-Lloyd will refine its medium-term strategic objectives and financial targets.
|Key benchmark figures for the 2017 outlook||Outlook|
|Global economic growth (IMF)||+3.4%|
|Increase in global trade (IMF)
|Increase in global container transport volume (IHS)||+3.7%|
|Transport volume, Hapag-Lloyd Group
|Average bunker consumption, Hapag-Lloyd Group||Increasing clearly
|Average freight rate, Hapag-Lloyd Group||Increasing moderately|
|EBITDA (earnings before interest, taxes, depreciation and amortisation), Hapag-Lloyd Group||Increasing clearly
|EBIT (earnings before interest and taxes), Hapag-Lloyd Group||Increasing clearly
The revenue and earnings forecast is based on the assumption of unchanged exchange rates.
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