Reporting 2021

Stronger together

Interview with Frank Dreeke

The 2021 financial year again presented BLG LOGISTICS with major challenges – but also opportunities. The lack of parts availability put a strain on customers in the automotive and industrial logistics sectors. But on the positive side, the boom in e-commerce provided a fillip, and the restructuring of EUROGATE progressed apace. Just how the strong sense of common purpose across the entire BLG Group helped to master many different kinds of tasks is the topic of our interview with CEO Frank Dreeke.

Interview with Frank Dreeke

What do you personally associate with this year’s motto for the BLG Annual Report: “Mastering challenges together”?

I find it very fitting. 2021 was characterized by challenges and these will continue to play a key role in 2022 – albeit to varying degrees in the different divisions. I think the word together is important, because in a company the size of ours we can only achieve our goals if we work together as a team – it’s not a task for an individual alone. Mastering implies that we not only tackle the challenges, but also find ways of overcoming them. That’s not just abstract theory, it sums up what we experience on an everyday basis at BLG.

2021 will go down in history as the second coronavirus year. What is your feeling when you look back over the year?

Once we put 2020 behind us, many hoped that in 2021 the pandemic would be over. Unfortunately, that wasn’t the case and we had to grapple with the situation over and over again. Restrictions in our private lives combined with the business challenges we faced made considerable demands on the entire BLG workforce. My heartfelt thanks go to all employees. Personally, I was in no doubt that we would weather the year better. After all, in our joint show of strength in 2020, we already amply demonstrated that we can do it. For me, that’s proof that the cultural change we initiated three-and-a-half years ago is now bearing fruit. The corporate values we developed together back then, such as embracing change, have played a decisive role in the past two pandemic years.

COVID-19 has had one small positive effect, though: The pandemic has shown how important and systemically relevant logistics is. Uninterrupted production and functioning goods flows need reliable logistics. Railcars, trucks, ships – these are the lifelines of our economy. We can be proud that operations at our ports have continued even in challenging times.

“The pandemic has shown how important and systemically relevant logistics is.”

Frank Dreeke, CEO BLG LOGISTICS

How did supply chain uncertainty and the lack of parts availability affect BLG’s business?

The shortage of parts particularly impacted volumes in the AUTOMOBILE Division and in industrial logistics. In the first half of 2021 we actually saw a slight increase in vehicle handling, for example, but the parts shortage unfortunately put a damper on this recovery in the second half-year.

How did business develop apart from the parts shortage?

At EUROGATE, we on the one hand made significant progress with the transformation process, while on the other we were able to benefit from the high global demand for container transports. The high order volume provided very positive momentum for our terminals throughout 2021 and we expect this to continue in 2022. In contract logistics, the picture was quite similar, with encouragingly high demand in the area of e-commerce and consumer goods. Another plus point was that bricks-and-mortar retailers were able to open up again – albeit under constraints.

Frank Dreeke

BLG has received EUR 53 million from the Bremen Fund to bolster its equity ratio. Can you please explain the background?

With the introduction of the new IFRS 16 international accounting standard in 2019, our equity ratio fell by nearly 19 percent despite a good business performance. Prior to that, we had a ratio of 34.5 percent, which was very good. In 2020, the pandemic-related negative operating result caused the equity ratio to drop to just five percent. But for a company of our size, this is too low vis-à-vis the banks, which will not grant us conditions that allow us to make meaningful investments on the capital market to secure our future growth.

That’s why you talked to your shareholders?

Exactly. We jointly believe that our strategy in our three business divisions puts us in an excellent position to achieve further profitable growth. And the fact that the coronavirus has demonstrably impacted on our business meant that we were able to take advantage of the relevant fund of the Free Hanseatic City of Bremen.

With what result?

Overall, our equity ratio has now risen to 12.8 percent, sending a clear signal to the banks and the financial market that BLG is on course.

Frank Dreeke
“We were able to reduce our greenhouse gas emissions by 13.1 percent in absolute terms in 2021 compared to 2018. That is already one third of the way toward achieving our target.”
Frank Dreeke, Chairman of the Board of Management of BLG LOGISTICS

Nowadays, a sustainable growth strategy is unthinkable without climate protection. What path is BLG taking here?

Climate protection is another challenge for the global community that needs to be mastered together. The targets are ambitious. We are also committed to implementing the United Nations Sustainable Development Goals, or SDGs, in all three areas of sustainability: environmental, social, and economic. In doing so, we consider the entire supply chain. We set ourselves goals and targets, committing ourselves in future to the 10 principles of the UN Global Compact, among other standards. We implement projects for and with our customers, exchange ideas with our stakeholders, and also hold our suppliers to account. BLG also supports its customers in looking for ways to safeguard the climate. For example in the area of electromobility, by converting our terminals accordingly and launching joint projects aimed at using alternative drive systems and fuels. As the C3 logistics center shows, we are also addressing the issue of climate-friendly real estate. We are already on the right track with our emissions reduction target and can report an absolute reduction in our CO2 emissions of 13.1 percent compared with 2018. This is already more than one third of the way to our target.

Mr Dreeke, thank you very much for the interview.