Hapag-Lloyd AG – Company Strategy & Performance Analysis

The Hapag-Lloyd group is Germany’s largest container liner shipping company. The company’s core business is shipping containers by sea, along with door to door transport services. The company is also involved in the transportation of hazardous goods. The company provides stowage consultation services regarding strains caused by container transport, weight limits of containers, weight distribution within containers for heavy items, function of packaging, cargo securing facilities (lashing, bedding and filling) and climatic influences. The company has a well-balanced global network of services ensuring a strong competitive position in attractive markets.

The company operates in Europe, the Americas, the Middle East, Africa and Asia Pacific. It was founded in 1847 and headquartered in Hamburg, Germany.

MarketLine Premium’s company strategy reports provide in-depth coverage of the performance and strategies of the world’s leading transport and logistics companies. The report details company operations in key geographies and offers a comprehensive analysis of each firm’s growth strategy and financial performance. The reports benchmark company performance via key indicators, including air freight revenue, sea freight revenue, air freight volume, sea freight volume, operating income, net income, Total revenue.

Key Highlights

The company witnessed an increase in revenue in Q3 FY2017

The company witnessed an increase in revenues from US$2,131.5m in Q3 2016 to US$3,135.8m in Q4 2016. However, revenue then declined to US$2,152.4m in Q1 FY2017. This decline was primarily due to intense competitive pressure in the container shipping industry. Revenue increased from US$2,380.2m in Q2 FY2017 to US$3,121.5m in Q3 FY2017. The increase was due to the initial inclusion of the UASC Group as well as the significant increase in the transport volume and average freight rate in comparison to FY2016. The company’s net profit margin increased from -2.2% in Q3 FY2016 to 0.8% in Q3 FY2017.

Intense competitive market has affected the company’s overall revenue

In 2016, the company’s total revenues decreased at 12.9% from US$9,816.1m in 2015 to US$8,550.0m in 2016. This was primarily due to intense competitive pressure in the container shipping industry as well as significantly reduced average bunker prices in comparison to FY2015. However, the company’s organic and inorganic growth initiatives will offset the decline in overall revenue. For instance, On 24 May 2017, Hapag-Lloyd completely acquired United Arab Shipping Company (UASC). The merger between the two liner shipping companies was completed in Hamburg. With 230 vessels and a shared fleet capacity of approximately 1.6 million TEU, Hapag-Lloyd is the fifth-largest liner shipping company in the world.

Hapag-Lloyd’s container shipping and transport volumes increased

Transport volume increased at 2.7% from 7,401,000.0 TEUs in 2015 to 7,599,000.0 TEUs in 2016. The increase was due to alliances and other collaborations formed by the company. Aggregate container capacity increased at 0.8% from 1,564,000 TEUs in 2015 to 1,576,000 TEUs in 2016. The acquisition of the United Arab Shipping Company S.A.G. (UASC) led to increase in the total throughput volume.

Scope

– Company Snapshot – Details key indicators and rankings of Hapag-Llyod in terms of revenue, air freight volume, ocean containers and total warehouse space.

– Company SWOT Analysis – Outlines Hapag-Llyod's strengths, weaknesses, and opportunities and threats facing the company.

– Growth Strategies – Provides an overview of Hapag-Llyod’s corporate goals and strategic initiatives and evaluates their outcomes.

– Company Performance and Competitive Landscape – Analyses the company’s performance by geographical segment and provides a peer comparison on parameters such as revenue and market share.

– Key Developments – Showcases Hapag-Llyod's recent corporate events and initiatives.

– ICT Spending Prediction – Details how the company allocates its ICT budget across the core areas of its business, specifically hardware, software, IT services, communications and consulting.

Reasons to buy

- How does Hapag-Llyod ranks among its peers in terms of revenue and market share?

- What are Hapag-Llyod's main growth strategies and how successful has the company been at implementing them?

- How has the company performed since 2014?

- How has Hapag-Llyod performed in comparison to its main competitors?

- What are Hapag-Llyod’s strengths and weaknesses and what are the opportunities and threats it faces?

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