Reporting 2021

Segment reporting and operating earnings

2. Operations of the BLG Group

As an international seaport-oriented logistics service provider with AUTOMOBILE, CONTRACT and CONTAINER Divisions for its customers in industry and retailing, the BLG Group is represented in over 100 subsidiaries and offices in Europe, North and South America, Africa and Asia.

The services offered range from seaport terminals in Europe to complex international supply chain management with value-added services. The main services of the divisions, divided into business areas, are presented below.

AUTOMOBILE

The AUTOMOBILE Division offers a full range of finished vehicle logistics services in its seaport terminals, inland terminals, car transport, AutoRail and Southern/Eastern Europe business areas.

The locations of the seaport terminals business area serve as hubs and are export ports for European vehicle production overseas such as China, Japan, Korea, the US, Australia, South Africa, Russia and Scandinavia. As import ports, these terminals offer all services for the European vehicle market. In addition to passenger car handling, the services also include traditional warehouse logistics and a large number of technical services such as pre-delivery inspection (PDI), special installations and conversions for new and used vehicles. In order to bundle the expertise in heavy goods handling, the logistics for offshore and onshore wind energy and high & heavy cargo handling segments in Bremerhaven were integrated into the seaport terminals business area. Conventional goods handling at Neustädter Hafen in Bremen is also assigned to the seaport terminals. This includes the handling, storage and appropriate treatment of paper and forest products, pipes, sheet metal and project cargo, as well as the handling of other heavy or bulky goods.

The inland terminals offer short distances to the European highway network, have their own railway connections, and most have a direct connection to the waterways. This network creates reliable logistics chains from car manufacturers around the world to car dealers and private end customers in the destination countries. The services include passenger car handling, warehouse logistics and technical services, e.g. the preparation of newer used vehicles, auctions, Internet sales.

In addition, through its Southern/Eastern Europe business area, BLG LOGISTICS is represented by several maritime and inland terminals in Europe.

The AutoTransport and AutoRail business areas offer transport by road, rail and inland waterways. The services also include individual transports and special shuttle concepts. Our focus here is on modernizing our fleets in order to be able to offer our customers low-emission transport chains.

In the AUTOMOBILE Division, revenue is normally recognized in the amount permitted to be invoiced, as the invoiced amounts correspond directly with the value of the performance completed to date. The services are mostly invoiced and paid on a monthly basis. This is based on the number of vehicles processed or transported and the agreed unit prices. In some cases, the invoice is issued before the performance obligation is fully met or only after all performance steps have been carried out. The portion of the consideration received from customers for which the services have not yet been performed is recognized as contract liabilities in the statement of financial position. In these cases, the sales are only recognized once the services have been transferred to the customer. Services already performed for which no invoice has yet been issued are recognized as contract assets in the statement of financial position.

CONTRACT

The CONTRACT Division develops customized logistics solutions. The focus of its services is on automotive parts, industrial and production logistics, retail and distribution logistics as well as freight forwarding services.

The industrial logistics (Europe and overseas) business areas provide logistics activities for the manufacturing industry. For car manufacturers, this includes the procurement logistics of the suppliers, supplying production lines, as well as consolidation, processing, packaging and shipping in order to supply production plants. Complex system services ensure reliable supplies to assembly lines in Germany and abroad. With the pre-assembly of vehicle components and production-related work processes, the industrial logistics business area serves as an extended workbench of automobile manufacturers.

In industrial companies in other sectors, complex goods flows relating to production are designed and optimized. The range of services also includes the supplies to and waste removal from production lines, on-site logistics for the optimal design of internal goods flows, reverse logistics management and complex assemblies.

Complex logistics processes are designed, implemented, managed and executed for retail companies in the retail logistics business area. In all sectors of the retail logistics business area, solutions are offered to customers from a single source. This applies in particular to the areas of e-commerce, multi-channel retailing, processing and value-added services for goods, the collection and processing of returns, as well as the handling of flat and hanging merchandise in the fashion logistics segment. Custom innovative solutions for renowned customers ensure that comprehensive information and product movements are available via in-house IT expertise. In addition, the retail logistics business area includes the handling and storage of refrigerated and frozen goods at the Bremerhaven container terminal as well as all related services.

The freight forwarding business area was wound up from April 2021 following the transfer of freight forwarding activities of BLG International Forwarding to Rhenus Air & Ocean Germany. Not affected by this is the Bremen freight forwarding location, which concentrates on overland transport, heavy goods transports, project business and sea freight. Overland transport is now reported in the industrial logistics business area, and seafreight and special projects in the seaport terminals business area.

In the CONTRACT Division, revenue is usually recognized in the amount permitted to be invoiced, as the invoiced amounts correspond directly with the value of the performance completed to date. The services are mostly invoiced and paid on a monthly basis. Capital-intensive services such as the provision of space and storage facilities are largely invoiced at fixed prices, but sometimes also according to actual use. The invoicing of personnel-intensive services is based on prices per performance unit or a combination of fixed basic remuneration and variable remuneration per performance unit, sometimes using volume tiers.

CONTAINER

The CONTAINER Division is represented by the joint venture EUROGATE GmbH & Co. KGaA, KG, Bremen, in which BLG holds a 50 percent share. EUROGATE has its own subsidiaries and investees. The EUROGATE Group companies are included in the consolidated financial statements using the equity method of accounting.

The focus of the activities of the EUROGATE Group includes handling containers on the European continent. EUROGATE operates, in some cases with partners, container terminals in Bremerhaven, Hamburg and Wilhelmshaven, Germany, at the Italian locations La Spezia, Ravenna and Salerno, in Tangier, Morocco, in Limassol, Cyprus, in Ust-Luga, Russia, and until November 2021 in Lisbon, Portugal. In addition, EUROGATE has investments in several inland terminals and rail transport companies.

Intermodal services (the transport of sea containers to and from the terminals), repairs, depot storage and trading of containers, cargo-modal services and technical services are offered as secondary services.

3. Notes on segment reporting

In accordance with IFRS 8, segmentation is based on the internal management and reporting structure. With regard to BLG LOGISTICS, this means that segments are reported by division in line with the Group structure, i.e. the CONTAINER Division is still recognized as its own segment in segment reporting and is eliminated again in the reconciliation column. At the same time, the earnings from companies accounted for using the equity method, which primarily include the earnings of the CONTAINER Division, are reported as part of EBIT in line with internal management. This also applies to the other companies accounted for using the equity method.

With one exception, entire companies are each assigned to the AUTOMOBILE, CONTRACT and CONTAINER Divisions. These companies each represent operating segments, which are grouped together for reporting purposes according to division, as they operate in a similar economic environment and are very similar in their services, processes and customer groups.

The AUTOMOBILE and CONTRACT Divisions were subdivided into eight business areas in 2021. 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 subgroup EUROGATE GmbH & Co. KGaA, KG for the CONTAINER Division.

The AUTOMOBILE Division essentially comprises the companies BLG AutoTerminal Bremerhaven GmbH & Co. KG, BLG AutoTerminal Deutschland GmbH & Co. KG, BLG AutoTransport GmbH & Co. KG and BLG AutoRail GmbH.

The significant companies of the CONTRACT Division are BLG Industrielogistik GmbH & Co. KG, BLG Handelslogistik GmbH & Co. KG and BLG Sports & Fashion Logistics GmbH.

The CONTAINER Division includes the 50 percent stake in the operational management company EUROGATE GmbH & Co. KGaA, KG of the EUROGATE Group.

The operations of the divisions are described in detail in note 2.

BLG AG and BLG KG, as the management and financial holding companies of the BLG Group, are not an operating segment as defined by IFRS 8. These central departments, with their assets, liabilities and results, are included in the reconciliation column. For disclosures regarding employees, the central departments are referred to as “Services”. The relevant disclosures can be found in the Group management report.

BLG LOGISTICS is predominantly active in Germany. EUR 1,016,393,000 of Group revenue (previous year: EUR 1,026,945,000) was attributable to Germany and EUR 34,045,000 (previous year: EUR 38,290,000) to other countries. This allocation was based on the location at which the Group performs services. EUR 551,089,000 of the Group’s non-current intangible assets and property, plant and equipment (previous year: EUR 584,579,000) was attributable to Germany and EUR 18,167,000 (previous year: EUR 18,934,000) to other countries.

Around 17 percent (previous year: 15 percent) of total Group revenue was generated with the Group’s largest customer in the AUTOMOBILE and CONTRACT Divisions. Of this amount, EUR 178,956,000 (previous year: EUR 159,564,000) was attributable to Germany and EUR 2,658,000 (previous year: EUR 2,376,000) to other countries. Around 11 percent (previous year: 11 percent) of total Group revenue was generated with the Group’s second-largest customer in the AUTOMOBILE and CONTRACT Divisions. Of this amount, EUR 109,756,000 (previous year: EUR 117,074,000) was attributable to Germany and EUR 858,000 (previous year: EUR 2,737,000) to other countries.

BLG LOGISTICS is managed on the basis of the financial data for the operating segments determined in accordance with IFRSs; the accounting policies apply to the segments in the same way as to the entire Group. The key performance indicators for the segments are earnings before taxes (EBT), revenue and the EBT margin.

Services between the segments are billed on an arm’s length basis.

Depreciation and amortization relate to the segments’ property, plant and equipment, including right-of-use assets.

Segment assets do not include equity investments in companies accounted for using the equity method, or deferred or current taxes. There are no segment assets not required for operations. In line with internal control, intra-Group subleases are recognized by the end user only.

Segment liabilities include lease liabilities, current liabilities necessary for financing and provisions excluding interest-bearing loans.

Capital expenditure relates to additions to property, plant and equipment, right-of-use assets and non-current intangible assets.

The reconciliation of the total of the reportable segments with the Group data was as follows for the main items of segment reporting:

Revenue with external third parties
EUR thousand
2021 2020
Total of the reportable segments 1,366,729 1,337,520
CONTAINER Division -305,955 -263,522
Consolidation -10,336 -8,763
Group revenue 1,050,438 1,065,235
EBIT
EUR thousand
2021 2020
Total of the reportable segments 94,214 -32,344
Central departments/other EBIT -23,552 -33,689
CONTAINER Division -74,152 21,601
Consolidation 64,997 -63,238
Group EBIT 61,507 -107,670
EBT
EUR thousand
2021 2020
Total of the reportable segments 77,466 -90,163
Central departments/other EBT -16,001 -22,534
CONTAINER Division -69,825 67,274
Consolidation 60,586 -70,704
Group segment earnings (EBT) 52,226 -116,127
Assets
EUR thousand
2021 2020
Total of the reportable segments 1,438,861 1,408,528
Central departments/other assets 772,313 838,365
Equity investments in companies accounted for using the equity method 162,349 98,662
Deferred tax assets 2,356 2,768
Reimbursement rights from income taxes 2,844 1,222
CONTAINER Division -594,506 -527,583
Consolidation -566,040 -627,870
Group assets (assets) 1,218,177 1,194,093
Liabilities
EUR thousand
2021 2020
Total of the reportable segments 1,056,926 1,088,247
Central departments/other liabilities 114,965 190,087
Equity 156,289 59,741
Non-current loans (not including the current portion) adjusted 136,689 146,387
Other non-current financial liabilities 59,172 47,660
Deferred tax liabilities 218 577
Current portion of non-current loans 21,699 21,049
CONTAINER Division -378,411 -381,579
Consolidation 50,630 21,924
Group liabilities (liabilities) 1,218,177 1,194,093

4. Revenue from contracts with customers

Revenue

In accordance with IFRS 15, revenue is recognized either at a point in time or over time when or as the performance obligation is satisfied and control is passed to the customer.

The amount of the revenue is based on the consideration agreed with the customer in exchange for transferring the promised goods or services.

The main services of the divisions, divided into business areas, are described in note 2.

In the BLG Group, revenue is normally recognized pursuant to IFRS 15.B16 in the amount permitted to be invoiced, as the invoiced amounts correspond directly with the value of the performance completed to date. BLG LOGISTICS therefore makes use of the practical expedient provided by IFRS 15.121 (b) and does not disclose the amount of the remaining performance obligations for these contracts.

The tables below itemize revenue by service type and by business area and allocate the subdivided revenue to the AUTOMOBILE and CONTRACT Divisions. The CONTAINER Division is not included because it is accounted for using the equity method. A breakdown by revenue generated in Germany and abroad is included in note 3.

By service type
EUR thousand
AUTOMOBILE
2021
AUTOMOBILE
2020
CONTRACT
2021
CONTRACT
2020
Total
2021
Total
2020
Freight forwarding and transport services 250,794 259,942 88,048 137,728 338,842 397,670
Handling revenue 116,314 109,983 217,666 173,356 333,980 283,339
Other logistics services and advisory services 59,967 65,574 132,341 124,543 192,308 190,117
Rental and storage income 41,337 44,720 36,610 38,852 77,947 83,572
Material sales 11,732 10,100 15,015 25,480 26,747 35,580
Provision of personnel and equipment 1,340 1,122 22,105 21,065 23,445 22,187
Container packing 2,912 2,629 3,340 2,325 6,252 4,954
Shipping income 4,092 2,144 0 0 4,092 2,144
Other 29,487 25,163 27,674 29,272 57,161 54,435
Total 517,975 521,377 542,799 552,621 1,060,774 1,073,998
Consolidation -4,804 -4,225 -5,532 -4,538 -10,336 -8,763
Total 513,171 517,152 537,267 548,083 1,050,438 1,065,235
By business area
EUR thousand
2021 2020
AUTOMOBILE    
Seaport terminals 235,527 160,088
Inland terminals 52,353 63,763
XXL Logistics 0 57,010
AutoTransport 114,172 122,241
AutoRail 97,421 98,786
Southern/Eastern Europe 13,698 15,264
  513,171 517,152
CONTRACT    
Industrial logistics (Europe) 263,862 216,777
Industrial logistics (overseas) 23,157 21,474
Retail logistics 240,028 237,245
Freight forwarding 10,220 72,587
  537,267 548,083
Total 1,050,438 1,065,235

Assets and liabilities from contracts with customers

Contract assets relate primarily to rights to receive consideration from customers arising from the satisfaction of performance obligations for which no invoice has been issued at the end of the reporting period. They are recognized under other assets in the statement of financial position (note 18).

Contract assets are reclassified as trade receivables if the right to receive consideration becomes unconditional. This is the case if the payment is due or will become due automatically as a result of the passage of time.

Loss allowances reported in net profit or loss are recognized on the basis of expected credit losses using the simplified approach. According to this approach, the amount of the loss allowance is to be determined on the basis of the lifetime expected credit losses. Changes in credit risk do not have to be tracked. The loss allowances are reported net as a separate item in the statement of profit or loss. Please also refer to note 32.

As the risk structure of the contract assets essentially corresponds to the risk structure of the trade receivables, the same expected credit loss rates are recognized for the loss allowances. The calculation of credit loss rates is described in note 18.

Contract liabilities result from advance payments by the customer or unconditional rights to receive consideration from the customer already existing before the (full) satisfaction of the performance obligations. Revenue is only recognized once the services have been transferred to the customer. They are recognized under other liabilities in the statement of financial position (note 28).

EUR thousand 12/31/2021 12/31/2020
Contract assets 7,854 6,429
Contract liabilities 1,873 832

The tables below contain information on the development of contract assets and contract liabilities.

Contract assets
EUR thousand
2021 2020
As of January 1 (gross) 6,449 6,531
Reclassification to trade receivables (during the year) -5,321 -6,240
Change from progress in the reporting year 6,759 6,158
As of December 31 (gross) 7,887 6,449
Loss allowances -33 -20
As of December 31 7,854 6,429
Contract liabilities
EUR thousand
2021 2020
As of January 1 (gross) 832 1,894
Revenue recognized in the reporting year: -676 -1,881
of which included in contract liabilities at the beginning of the reporting year -676 -1,881
Increase due to payments received (not including amounts recognized as revenue in the reporting year) 1,717 819
As of December 31 1,873 832

The credit risk and the expected credit losses for contract assets were as follows as of December 31, 2021 and December 31, 2020:

EUR thousand 12/31/2021
Not past due
12/31/2020
Not past due
Expected credit loss rate (weighted average) 0.42% 0.31%
Nominal amounts 7,887 6,449
Loss allowances -33 -20
Carrying amounts 7,854 6,429

Loss allowances for contract assets developed as follows:

EUR thousand 2021 2020
Amount as of the beginning of the financial year 20 17
Loss allowances for the financial year    
Transfers 17 7
Reversals -4 -4
Balance as of the end of the financial year 33 20

5. Other operating income

EUR thousand 2021 2020
Income from the reversal of provisions 15,980 13,363
Insurance recoveries and other reimbursements 8,393 8,363
Gains on disposal of property, plant and equipment 8,261 1,145
Income from the recharging of expenses 7,755 8,689
Income from prior periods 3,262 2,668
Ground rent and rental income 2,005 2,031
Income from recycling 1,328 494
Income from the provision of personnel 824 873
Income from capital gains 324 356
Neutral income 105 29
Other 6,962 8,179
Total 55,199 46,190

Of the ground rent and rental income, EUR 1,371,000 (previous year: EUR 1,425,000) was attributable to income from operating leases for own fixed assets and EUR 634,000 (previous year: EUR 606,000) to income from subleases (see note 14).

6. Cost of materials

EUR thousand 2021 2020
Expenses for other purchased services 243,462 277,894
Expenses for external personnel 101,969 102,245
Expenses for raw materials, consumables and supplies 78,332 74,771
Change in inventories of work in progress and services and finished products 1 -5
Total 423,763 454,905

The decline in expenses for other purchased services of EUR 34,432,000 resulted primarily from the disposal of the operating business of BLG International Forwarding GmbH & Co. KG, Hamburg, with effect from March 31, 2021.

7. Personnel expenses

EUR thousand 2021 2020
Wages and salaries 394,847 369,299
Statutory social expenses 79,305 75,567
Expenses for retirement benefits, support and anniversaries 5,114 10,225
Other 37 385
Total 479,303 455,476

Amounts resulting from the interest cost of personnel provisions, particularly pension provisions, are not recognized as personnel expenses. These are reported as a component of net interest income (expense).

Statutory social expenses included EUR 33,509,000 (previous year: EUR 31,158,000) for contributions to statutory retirement plans. Of this amount, EUR 199,000 (previous year: EUR 197,000) was attributable to key management personnel and EUR 19,000 (previous year: EUR 19,000) to employee representatives on the Supervisory Board.

In 2021, BLG LOGISTICS had an average of 10,370 employees (previous year: 9,991). Of these employees, 8,212 (previous year: 7,754) were blue-collar workers and 2,158 (previous year: 2,237) worked in commercial functions. Please refer to the Group management report and the Segment reporting for further information.

8. Depreciation, amortization and impairment of non-current intangible assets, property, plant and equipment and right-of-use assets from leases

EUR thousand 2021 2020
Depreciation and amortization 80,609 89,215
Impairment 216 26,217
Total 80,825 115,432

A breakdown of the depreciation, amortization and impairment of the individual asset classes can be found in notes 12 and 13.

The impairments related in the previous year with EUR 10,795,000 in particular to the goodwill of BLG Sports & Fashion and with EUR 8,745,000 to the goodwill of CGU Spedition.

Depreciation and amortization included depreciation on right-of-use assets from leases in accordance with IFRS 16 of EUR 47,693,000 (previous year: EUR 54,538,000). Further disclosures can be found in note 14.

9. Other operating expenses

EUR thousand 2021 2020
Rental and incidental rental expenses 24,736 25,693
Security costs and other property expenses 21,258 19,384
IT expenses 16,207 14,227
Expenses for loss events 13,617 12,418
Expenses for insurance premiums 10,652 8,537
Legal, advisory and audit fees 8,988 7,224
Other personnel expenses 6,770 5,852
Distribution costs 5,003 5,630
Other neutral expenses 845 605
Administrative expenses and contributions 3,282 2,617
Other prior-period expenses 2,891 1,838
Postal and telecommunications costs 2,628 2,784
Other taxes 2,465 3,156
Training expenses 2,053 2,077
Book losses for the disposal of assets 548 1,952
Expenses for capital losses 187 544
Other 926 15,851
Total 123,056 130,389

10. Net income (net loss) of companies accounted for using the equity method

Profit shares from partnerships are realized immediately at the end of the financial year, unless the partnership arrangement links the existence of a withdrawal claim to a separate partner resolution. By contrast, dividends from corporations are recognized through profit or loss only once a profit appropriation resolution exists.

EUR thousand 2021 2020
Net income (net loss) of companies accounted for using the equity method    
Joint ventures 61,714 -62,775
Associates 588 1,070
Total 62,302 -61,705

Income from joint ventures included the CONTAINER Division’s earnings of EUR 61,879,000 (previous year: EUR -60,740,000).

11. Net interest income (expense)

EUR thousand 2021 2020
Income from non-current finance receivables 20 26
Other interest and similar income    
Interest income from lease receivables 6,627 6,330
Interest income from bank balances 563 462
Interest income from interest rate swaps 3 13
Interest income from amortization of other assets 0 102
Other interest income 143 202
  7,336 7,110
Interest and similar expenses    
Interest expense from lease liabilities -11,423 -11,338
Interest expense from non-current loans and other financial liabilities -2,334 -1,709
Interest expense from interest rate swaps -952 -894
Interest cost for provisions and liabilities -898 -532
Interest expense for current liabilities to banks -149 -113
Other interest expense -963 -1,098
  -16,719 -15,685
Total -9,363 -8,549

Please refer to note 14 for information on interest income from lease receivables and interest expense from lease liabilities.

Borrowing costs of EUR 412,000 (previous year: EUR 0,000) were capitalized. The underlying capitalization rate was 2.15 percent.