Strategy & Outlook

The prime objective of the Hapag-Lloyd Group is to achieve long-term profitable growth. Developments inthe Group’s transport volume as well as the operating performance indicators EBITDA and EBIT serve as the basis for measuring whether the corporate objectives are met. Hapag-Lloyd aims to benefit from the market opportunities for organic growth
while also strategically protecting its leading competitive position by utilising measures to increase its value in
the context of consolidation within the industry. To make use of external growth opportunities, a business
combination agreement regarding the merging of container activities was signed with the United Arab Shipping Company (UASC) on 18 July 2016.

The growing global demand for container transportation is the very foundation of the organic growth which Hapag-Lloyd hopes to achieve. IHS Global Insight (October 2016) has forecast a rise in global container shipments of 2.6% to around 132.7 million TEU in 2016 and a further 4.2% to approximately 138.3 millionTEU in 2017. Hapag-Lloyd intends to
increase the transport volume organically in line with market growth.

Five strategic projects were implemented in 2015 in order to improve efficiency and cost structures. Hapag-Lloyd’s aim is to improve its profitability, based on the increasing effectiveness of the strategic measures.

The CUATRO and OCTAVE projects are expected to deliver annual synergies, efficiency improvements and cost savings totalling USD 600.0 million by 2017 as against the comparable cost base in the 2014 financial year and assuming that external factors remain the same. More than 70% of the expected synergies, efficiency improvements and cost
savings were already achieved in the 2015 financial year. The planned synergies and efficiency improvements out of the projects Quatro and Octave are expected to be realized by more than 90% in 2016.

In the first quarter of 2016, the OCTAVE efficiency programme was intensified, and additional measures (OCTAVE II) were added to it. These should lead to further cost savings and efficiency improvements with ahigh double-digit million dollar amount by the end of 2017, in addition to the improvements already achieved.The efficiency projects have contributed to the improvement in cost structures also in the first nine months of 2016.

Key benchmark figures for the 2016 outlook Outlook
Global economic growth (IMF) +3.1%
Increase in global trade (IMF)
Increase in global container transport volume (IHS) +2.6%
Transport volume, Hapag-Lloyd Group
Slightly increasing
Average bunker consumption, Hapag-Lloyd Group Clearly decreasing
Average freight rate, Hapag-Lloyd Group Clearly decreasing
EBITDA (earnings before interest, taxes, depreciation and amortisation), Hapag-Lloyd Group Clearly decreasing
EBIT (earnings before interest and taxes), Hapag-Lloyd Group Clearly decreasing


The revenue and earnings forecast is based on the assumption of unchanged exchange rates.

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