As the personally liable general partner of BLG LOGISTICS GROUP AG & Co. KG (BLG KG), the listed company BREMER LAGERHAUS-GESELLSCHAFT -Aktiengesell-schaft von 1877- (BLG AG) has assumed the management of the BLG Group. These two companies, which are closely linked in legal, commercial and organizational respects, have prepared the consolidated financial statements as joint parents.
BLG AG does not hold any share capital in BLG KG and is also not entitled to participate in the company’s profits. It receives remuneration for the liability it has assumed and for its business management activities. All limited partnership shares of BLG KG are held by the Free Hanseatic City of Bremen (municipality). The business of BLG KG is managed by the Board of Management of BLG AG as a body of the general partner. The Board of Management is fully accountable for managing the business in accordance with Section 76 (1) of the German Stock Corporation Act (AktG) and is not subject to instructions from the shareholders.
Legal structure of the Group as of December 31, 2020
Business model and organizational structure
The BLG Group operates externally under the brand BLG LOGISTICS. BLG LOGISTICS is a seaport-oriented logistics service provider with an international network. We have a presence in all the world’s growth markets, with over 100 companies and offices in Europe, the Americas, Africa and Asia. We offer our customers in industry and retailing complex logistics system services. Our AUTOMOBILE and CONTAINER Divisions are leaders in Europe. Our CONTRACT Division is among the leading German providers.
As a strategic management holding company, BLG KG focuses on strategic developments at Group level. As a result, the holding company’s influence on the operating business is greater than that of a pure financial holding company, but it is also significantly less than in the case of an operational management holding company. The Board of Management members responsible for the three divisions AUTOMOBILE, CONTRACT and CONTAINER play a special role as an interface to the operating units. The Board of Management determines the Group strategy with vision and mission by creating strategic guidelines at Group level; together with the operating managers, the relevant Board of Management member determines the strategy at division level within the framework of the Group strategy and is responsible for strategic management of the division. The fulfillment of the respective strategies is supported by the central departments.
In accordance with its defined mission, BLG LOGISTICS aims to make logistics simpler for its customers, so that they can focus on their successful market operations.
BLG LOGISTICS operates in three divisions. The reporting also follows this structure.
The AUTOMOBILE and CONTRACT are subdivided into business areas. Responsibility for the operational management of the business areas, including earnings responsibility, lies with the relevant business area managers of the AUTOMOBILE and CONTRACT Divisions, and with the group management of the EUROGATE GmbH & Co. KGaA, KG subgroup for the CONTAINER Division.
AUTOMOBILE Division
The AUTOMOBILE Division is the leading technical and logistics service provider for the international automotive industry. In the 2020 financial year, our worldwide AUTOMOBILE network handled, transported, or technically processed 4.8 million vehicles.
BLG LOGISTICS’ AUTOMOBILE Division offers multimodal transport concepts with global logistics reach and dovetails individualized and innovative technical service packages. Distribution takes place by road, rail and inland waterway. In addition to the seaport terminals in Bremen, Bremerhaven, Cuxhaven, Hamburg (Germany) and in Gdansk (Poland), the AUTOMOBILE Division also operates several inland terminals on the Rhine and the Danube. The bases of our truck fleet extend from Paderborn in Germany to Moscow.
BLG AutoRail is a specialist provider of vehicle transport services by rail, with its own fleet of 1,500 open double-deck railroad cars including 200 flat wagons. This means that the logistics supply chain from the vehicle manufacturers to the end customer is fully covered.
Our wheels are constantly turning: BLG’s AUTOMOBILE Division consistently supplements its logistics network with smart digital solutions and sustainable concepts for climate-friendly transport.
CONTRACT Division
The CONTRACT Division manages complex projects and offers its customers reliable upstream and downstream logistics solutions. The focus of our know-how and experience lies in procurement, production and distribution logistics, returns and spare parts logistics, as well as freight forwarding services. We offer storage, transport, packing and unpacking services, handle conventional orders, e-commerce issues and also a variety of value added services.
As a logistics architect, we plan, configure and implement customized logistics solutions, ranging from highly automated logistics centers to manual in-house handling.
Our customers are strong brands from industry and retailing, medium-sized companies and the major German and international car manufacturers. We work at our logistics centers and our customers’ production facilities and warehouses at over 40 locations in Europe and overseas. Be it automotive parts, railroad components, trainers, printers, fashion, furniture, cookies, bathroom fittings or frozen potato products – our teams of experts devise bespoke service packages for a wide variety of goods.
CONTAINER Division
The CONTAINER Division is represented by the EUROGATE joint venture. The EUROGATE Group, in which BLG LOGISTICS holds a 50 percent stake, is Europe’s leading shipping line-independent container terminal group. Together with the Italian terminal operator CONTSHIP Italia, the company operates a network of 12 container terminals from the North Sea to the Mediterranean. Secondary services are also available in the form of intermodal and container-related services.
Changes in the group of consolidated companies
In the AUTOMOBILE Division, BLG Automobile Logistics Italia S.r.l. i. L., Gioia Tauro, Italy, was deconsolidated in the reporting year following entry into liquidation. As part of an internal Group restructuring, BLG WindEnergy Logistics GmbH & Co. KG, Bremerhaven, was absorbed into BLG AutoTerminal Bremerhaven GmbH & Co. KG, Bremerhaven, and was thus no longer included in the group of consolidated companies.
In the CONTRACT Division, BLG Handelslogistik GmbH & Co. KG, Bremen, increased its shareholding in BLG Sports & Fashion Logistics GmbH, Hörsel, by 49 percent to 100 percent in the reporting year. Under a purchase agreement dated November 24, 2020, BLG Industrielogistik GmbH & Co. KG, Bremen, sold its shares in BLG Automotive Logistics of South America Ltda. São Paulo, Brazil. As part of the sale, the shares in BMS Logistica Ltda., São Paulo, Brazil, were also divested.
Research and development
We are working continuously to offer our customers new services and thus support them in aligning their logistics processes with future requirements. At the same time, we place a focus on optimizing the underlying processes across the entire portfolio. The innovations behind this are developed, managed and ultimately translated into product solutions by the Sustainability and Digitalization department. We thus ensure that we remain competitive in the long term and position ourselves vis-à-vis our customers as innovation drivers. In determining the potential of new ideas, we pursue the following approaches:
Technologies, processes or potential solutions whose suitability has not yet been demonstrated are tested in 100-day projects at selected locations or within individual business divisions. Like this, in slightly over three months, we have a proof of concept which is used as a basis for deciding whether the project is transferred to continuous operations, is further tested and optimized in a 6-month sprint, is continued on the basis of an operational project, or is not pursued further.
We implement existing and proven solutions directly in the company context via operational innovation projects.
Lastly, in research and development projects we work with partners from science and industry on brand new, particularly complex concepts. Three new research projects were launched in 2020.
In the reporting year, we completed 11 100-day projects and ten 6-month sprints, including a total of eight with an AI-reference (artificial intelligence). This continues to be our focus – especially in the field of machine learning with a view to deployment in human resources planning and in intelligent document management. In addition to the use of chatbots in recruiting and the development of driverless transport vehicles at the Bremen site, newly implemented projects included process analysis using desktop activity mining as well as automatic capture of the time or duration of processes via sensors. The innovation team also organized numerous workshops on mapping out the digitalization roadmap as well as on various other strategic innovation and digitalization topics. These activities will be continued in 2021.
Further progress was made in the ongoing “SecProPort”, IRiS” and “SHARC” research projects in the reporting year. As part of a consortium of eight cooperation partners, we are working in the former on the development of IT security architecture to defend port logistics against cyberattacks.
In the “IRiS” project, we have teamed up with one research partner and two industry partners in looking for solutions to automate the unloading of boxes from containers. The project was scheduled for completion in August 2020, but experienced delays due to the coronavirus pandemic. Contact and at times access restrictions at our partner meant that the robot system could not be assembled, and consequently commissioning, laboratory and field tests had to be postponed. A cost-neutral extension of the project until April 30, 2021 was approved.
The “SHARC” project is concerned with the target to operate the port facilities in Bremerhaven and Bremen CO2-neutrally by 2023. To this end, a concept for intelligent integration of renewable energy sources into the port energy infrastructure is to be drawn up. Completion of the project has been pushed back from December 2020 to June 30, 2021. A follow-up is planned.
All three projects are funded by the German Federal Ministry of Transport and Digital Infrastructure (BMVI) as part of the IHATEC (Innovative Port Technologies) funding program.
The “Isabella” project was successfully concluded on June 30, 2020. The heart of this project is a multi-touch table that maps a virtual reflection of terminal operations and allows simulation and evaluation of various scenarios, thus increasing transparency in the process organization. On July 1, 2020, the “Isabella 2.0” follow-up project funded by the BMVI got underway with the goal to integrate processes for all means of transportation, i.e. the loading and unloading of trucks, railroad cars and ships, into the “Isabella” control algorithm. The parameterization of the control algorithm using AI methods also plays a role in this. It is also planned to identify further digitalization needs in the context of the project, including appropriate solutions, as well as to develop a virtual training environment for drivers at the terminal with the help of virtual reality technology.
The “KITE” and “INSERT” sponsorship projects were newly launched in 2020. In the former, we are working together with one research partner and two industry partners to develop an AI-based forecasting method for predicting transportation volumes. It is hoped this will reduce the number of empty runs on the part of freight forwarding companies by up to 15 percent and in doing so support the overarching goal to make transport logistics more sustainable by lowering CO2 emissions. The project is also sponsored by the BMVI.
In the “INSERT” project, which is funded by the European Regional Development Fund (ERDF), we are also working together with three collaboration partners. This involves the development of an assistance system for drafting initial concepts for production and logistics planning, for which corresponding expert knowledge is transferred into an AI-based system. This adaptive system is designed to support planners and thus enhance the quality of the developed concepts. At the same time, we are working to significantly shorten planning processes.
In 2020, BLG LOGISTICS was thus involved in seven consortium projects with a total volume of EUR 18.6 million. All three newly launched projects in the reporting year are concerned with the question of how artificial intelligence can be used in logistics.
Relevant legal and economic factors
BLG LOGISTICS has to observe a wide range of national and international legislation. In addition to regulations under public law, capital market law, employment law including occupational health and safety legislation, transport and customs laws and competition law are particularly relevant to us. Collective pay agreements in Germany are one of the most important economic factors for BLG LOGISTICS, as a large proportion of the workforce is employed in Germany and personnel expenses for our own as well as external staff represent the main cost item. Because our business model is capital-intensive in all divisions, the cost of capital also plays a significant role.
Group control
Financial key figures
As part of BLG LOGISTICS’ mission and vision and the sharpening of strategic guidelines, the management system was designed to be as clear and transparent as possible. Internal reporting and remuneration systems are designed stringently for the entire Group according to uniform measurement variables.
The key management indicators of BLG LOGISTICS are:
EBT Earnings before taxes (EBT) is the basis for determining profitability, independently of tax effects that cannot be influenced. This is also suitable for measuring profitability in an international comparison.
Revenue Group revenue is derived from the consolidated income statement and does not include the revenue of the CONTAINER Division.
EBT margin Dividing EBT by revenue produces the
EBT margin. This is an indicator of a company’s efficiency and profitability.
The table compares the expected key performance indicators with the key figures achieved in the financial year and shows the forecast for the following financial year. For the corresponding explanations, please refer to the Report on economic position and to the Outlook.
Key performance indicators Actual/Target/Forecast
2019 Actual
2020 Forecast
2020 Actual
2020 Target achievement
2021 Forecast
EBT
EUR thousand
37,544
Significant decline
-116,127
Decline has occurred
Significant improvement
Revenue
EUR thousand
1,158,632
Significantly below previous year
1,065,235
Decline has occurred
Previous year’s level
EBT margin
Percent
3.2
Significant decline
-10.9
Decline has occurred
Significant improvement
Non-financial key figures
The non-financial key figures are individual control variables depending on the operating business unit. This includes measurement variables such as vehicle handling, processed quantities and container handling. In order to assess future developments, we rely on a continuous dialog with customers and closely monitor overall economic developments in order to be able to react to changes at an early stage.
No non-financial key figures are used for management at Group level.
Non-financial performance indicators
Employees1
As an international seaport-oriented logistics service provider, BLG LOGISTICS requires committed, motivated and skilled employees in order to be successful in the market over the long term and to meet the continuous challenges of globalization and demographic change. Since the 2019 financial year, this has been underscored by a wide range of measures and campaigns under the motto “#SuccessDependsOnEverybody” spanning all levels from temporary employees to the Board of Management and all areas and locations of BLG LOGISTICS.
1The following employee numbers are defined in accordance with Section 267 (5) HGB.
Employees 2020
Employees by age group
In order to attract, develop and retain its employees, BLG LOGISTICS aims to consistently maintain its image as an attractive company on the labor market. That is why our personnel policies include options for maintaining a work-life balance and specific health management mechanisms, as well as performance-related pay and targeted training opportunities.
The successful implementation of a clear and forward-looking strategy largely depends on BLG LOGISTICS’ management. Our leadership principles and our corporate values support the achievement of a shared understanding of leadership at all levels.
In the reporting year, the average number of employees (excluding the CONTAINER Division) decreased by 76 persons year-on-year, which is equivalent to 0.8 percent. The decline in the CONTRACT Division is due, among other things, to the customary switch of service providers in contract logistics. This ran counter to new hires in connection with business expansion.
Employees by division
2020
2019
Percentage change
AUTOMOBILE Division
3,331
3,308
0.7
of which blue-collar workers
2,852
2,835
of which white-collar workers
479
473
CONTRACT Division
6,287
6,393
-1.7
of which blue-collar workers
4,902
5,024
of which white-collar workers
1,385
1,369
CONTAINER Division
1,618
1,653
-2.1
of which blue-collar workers
1,146
1,183
of which white-collar workers
472
470
Segment employees
11,236
11,354
-1.0
of which blue-collar workers
8,900
9,042
of which white-collar workers
2,336
2,312
Services
373
366
1.9
of which blue-collar workers
0
0
of which white-collar workers
373
366
Employees incl. CONTAINER Division
11,609
11,720
-0.9
of which blue-collar workers
8,900
9,042
of which white-collar workers
2,709
2,678
Less employees of the CONTAINER Division
-1,618
-1,653
-2.1
of which blue-collar workers
-1,146
-1,183
of which white-collar workers
-472
-470
Employees of BLG LOGISTICS
9,991
10,067
-0.8
of which blue-collar workers
7,754
7,859
of which white-collar workers
2,237
2,208
The number of persons employed by the Group, excluding the Board of Management and apprentices, is shown in the table, broken down by division, and in accordance with Section 267 (5) HGB (annual average).
Non-financial report
In accordance with the provisions of the Act to Strengthen Non-Financial Reporting by Companies in their Management Reports and Group Reports (CSR Directive Implementation Act), BLG LOGISTICS has prepared a non-financial Group statement in accordance with Section 315b HGB since the 2017 financial year. This statement is integrated into the sustainability report as a separate non-financial report, which can be downloaded from reporting.blg-logistics.com. Our 2020 sustainability report also reports in detail on other non-financial topics.
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