Capital Structure

20. Equity

The breakdown of and changes to equity in the 2022 and 2021 financial years are presented in the consolidated statement of changes in equity as a separate component of the consolidated financial statements as of December 31, 2022.

a) Consolidated capital of BLG AG

As in the previous year, the share capital (subscribed capital) amounted to EUR 9,984,000.00 and was divided into 3,840,000 approved, no-par registered shares with voting rights. Transfer of the shares requires the approval of the company in accordance with Section 5 of the Articles of Incorporation. As in the previous year, the share capital was fully paid as of December 31, 2022.

The retained earnings included the legal reserve pursuant to Section 150 of the German Stock Corporation Act (AktG) of EUR 998 thousand (previous year: EUR 998 thousand), which was allocated in full, as well as other retained earnings of EUR 10,086 thousand (previous year: EUR 10,273 thousand). In the 2022 financial year, withdrawals from retained earnings amounted to EUR 110 thousand (previous year: transfers to retained earnings of EUR 697 thousand).

b) Consolidated capital of BLG KG

The capital attributable to the limited partner of BLG KG is recognized. The limited liability capital and the share premium were almost exclusively made up of contributions in kind.

The share premium account includes allocations of asset-side differences from the time before the transition of the consolidated financial statements to IFRSs. In the prior period, the limited partner, the Free Hanseatic City of Bremen, made a contribution to the share premium of EUR 53,000 thousand.

Retained earnings include, in addition to undistributed profits from prior periods, dividend payments and other withdrawals, earlier changes in the basis of consolidation recognized outside profit or loss, and other changes and shares of consolidated net profit. In addition, retained earnings also include the differences between the German Commercial Code (HGB) and IFRSs existing on January 1, 2004 (date of transition). There is no separate presentation of the net profit or loss of consolidated companies.

The actuarial gains and losses credited or charged directly to equity from the measurement of gross pension obligations in accordance with IAS 19 and the difference between the expected and actual return on plan assets are reported in “Other reserves.”

The reserve from the fair value measurement of financial instruments includes net gains or losses credited or charged directly to equity from changes in the fair value of the effective portion of the cash flow hedges. Reserves are generally reversed upon settlement of the underlying transaction. In addition, the reserves are reversed on expiration, disposal, termination or exercise of the hedging instrument, in the event of revocation of the designation of the hedging relationship or non-fulfillment of the require¬ments for a hedge under IFRS 9. The reserve also contains changes in the measurement of equity investments measured at fair value. Further disclosures on hedge accounting are presented in note 32 in the “Derivative financial instruments” section.

As of the end of the reporting period, the reserve consisted of the fair values of the interest rate swaps qualifying as hedges of EUR 10,079 thousand (previous year: EUR –8,465 thousand), deferred taxes on this amount recognized directly in equity of EUR 453 thousand (previous year: EUR 453 thousand) as well as EUR 646 thousand (previous year: EUR –76 thousand) from the fair values of financial instruments at associates recognized directly in equity.

The foreign currency translation reserve includes exchange differences from the translation of financial statements of consolidated companies in currencies other than the euro.

c) Equity of non-controlling interests

This item contained EUR 6,290 thousand (previous year: EUR 6,934 thousand) for the minority interests in the equity of fully consolidated subsidiaries.

For the development of the individual equity components, please see the separate Consolidated statement of changes in equity.

21. Earnings per Share BLG AG

In accordance with IAS 33, basic earnings per share are calculated by dividing the consolidated net profit attributable to BLG AG by the average number of shares. Basic earnings per share for the 2022 financial year amounted to EUR 0.25 (previous year: EUR 0.30). This calculation was based on the portion of the consolidated net profit of EUR 965 thousand (previous year: EUR 1,154 thousand) attributable to BLG AG and the unchanged number of shares of 3,840,000.

In the calculation of diluted earnings per share, the average number of issued shares was adjusted for the number of all potentially dilutive shares. As in the previous year, there was no deviation in amount from the basic earnings in the reporting year.

Like basic earnings per share, diluted earnings per share were fully attributable to continuing operations.

22. Dividend per Share

On June 1, 2022, the Annual General Meeting of BLG AG approved the proposal of the Board of Management and the Supervisory Board to appropriate the net retained profits (in accordance with the German Commercial Code (HGB)) of EUR 1,152 thousand reported on December 31, 2021 as follows:

Distribution of a dividend of EUR 0.30 per share. This represented a pay-out ratio of EUR 1,152 thousand and a distribution ratio of 99.8 percent. The dividend was distributed to our shareholders on June 7, 2022.

For the 2022 financial year, the Board of Management and the Supervisory Board will propose to the Annual General Meeting on June 7, 2023 that the net retained profits in the amount of EUR 1,075 thousand be used to pay a dividend of EUR 0.28 per share. This represents a pay-out ratio of 114.4 percent.

Shareholders’ rights to dividend payments are recognized as a liability in the period in which the corresponding resolution is passed.

23. Non-current Loans

Of the loans from banks, a total of EUR 61,182 thousand (previous year: EUR 65,328 thousand) had fixed interest rates and EUR 98,728 thousand (previous year: EUR 93,059 thousand) had variable interest rates.

Assurances have been made to all partner banks with regard to equal treatment and the change-of-control clause.

24. Other Financial Liabilities

Financial liabilities are recognized as liabilities when the BLG Group becomes party to an agreement. The liabilities are measured at fair value on initial recognition. They are subsequently measured, with the exception of derivatives, at amortized cost using the effective interest method. The measurement of derivatives is described in note 32.

Please refer to note 14 for information on the measurement of lease receivables.

Financial assets and liabilities are only netted and the net amount reported in the statement of financial position when there is a legally enforceable right to do so and there is an intention to settle on a net basis or to settle the corresponding liability at the same time as the relevant asset is sold.

Liabilities are derecognized after settlement, waiver or expiration.

Other financial liabilities break down as follows:

The average effective interest rates as of the end of the reporting period of current account liabilities to banks amounted to 1.0 percent (previous year: 0.8 percent).

Information on (undiscounted) future cash flows from lease liabilities and other financial loans is given in note 32 under “Liquidity risk.”

25. Deferred Government Grants

Investment grants from the government are not recognized until there is reasonable assurance that the attached conditions will be met and that the grant will be awarded. Grants are reported separately under liabilities using the gross method. They are reversed pro rata temporis in line with the depreciation and amortization of the subsidized assets.

The items set forth in the tables above were deferrals for asset-related grants. The grants of the AUTOMOBILE Division included EUR 1,204 thousand (previous year: EUR 1,256 thousand) for grants from the Federal Railway Authority for replacements and renovations in the rail infrastructure. The deferrals were reversed in line with the depreciation of the subsidized assets. Total income from the reversal of the deferrals amounting to EUR 126 thousand (previous year: EUR 81 thousand) was recognized in 2022.

In addition, further income of EUR 1,017 thousand was recognized during the year (previous year: EUR 2,544 thousand), the full amount of which related to grants recognized through profit or loss. EUR 389 thousand (previous year: EUR 1,506 thousand) of this amount related to reimbursements of social security contributions by the Agentur für Arbeit (Federal Labor Agency) in connection with the introduction of short-time work. These were reported gross under other operating income.

26. Non-current Provisions

Pension obligations are post-employment benefits within the meaning of IAS 19. Pension provisions are measured using the projected unit credit method prescribed in IAS 19 for defined benefit plans. In addition to pension obligations existing at the end of the reporting period, this method also takes into account the future earnings trend, expected pension increases and expected fluctuation. Actuarial gains and losses are fully credited or charged to other comprehensive income in the period in which they arise. The net interest component, which includes interest expense from the interest cost of the gross pension obligations less the expected return on plan assets, is shown in net financial income / net finance costs. The plan assets bear interest at the applied discount rate on which the measurement of the pension obligations is based. The obligations presented in the statement of financial position are net obligations after offsetting against plan assets.

Anniversary provisions are other long-term employee benefits within the meaning of IAS 19. They are also measured using the projected unit credit method. The interest component included in the anniversary expenses is shown in net financial income / net finance costs.

Provisions for pensions

All the plans of BLG LOGISTICS are defined benefit plans within the meaning of IAS 19. There are no minimum funding requirements.

The individual commitments of the Group companies form the legal basis for granting benefits. In addition, there are obligations for the payment of a disability pension and a retirement pension from the collective framework agreement for the port employees of German seaport companies, including the special provisions for the ports in the state of Bremen of May 12, 1992. On January 1, 1998, the pension obligations existing at BLG AG up to this date were assumed by the Free Hanseatic City of Bremen (municipality).

There are also pension obligations in accordance with the guidelines of the Siemens pension insurance for employees who were transferred as of October 1, 2001 from SRI Radio Systems GmbH and as of May 1, 2003 from Siemens AG to BLG Logistics Solutions GmbH & Co. KG.

Pension obligations exist for employees who were transferred from Schenker AG as of April 1, 2015, and from Kühne+Nagel (AG & Co.) KG as of January 1, 2016, to BLG Industrielogistik GmbH & Co. KG pursuant to Schenker AG’s “Benefit plan 2000” works agreement of February 28, 2003, as well as Schenker AG’s “Pension component employee participation” company-wide works agreement of June 9, 2011.

Due to a transfer of operations, BLG Handelslogistik GmbH & Co. KG assumed obligations from Puma AG in the form of identical individual commitments as of October 1, 2018.

In addition, there are obligations to grant and pay retirement, disability and survivor’s pensions due to a Group works agreement on ensuring the social future dated March 15, 2005 (social future concept). Significant portions of this benefit plan are made up of annually agreed compensation waivers to be negotiated with the participating employees, while the components of the bonus plan result annually from an employee profit sharing plan established after the end of the financial year.

For parts of the individual commitments and for the obligations within the framework of the social future concept, there are plan assets in the form of qualified insurance contracts within the meaning of IAS 19. The plan assets are managed externally by insurance companies, and specifically include reinsurance cover for pension commitments and deposits for outstanding reinsurance premiums, in which outstanding reinsurance premiums are invested as a lump sum in a securities account. The instalment premiums to the reinsurer are financed from a corresponding sale of the fund units.

Like the reinsurance policy, the fund units are pledged to the beneficiaries. The asset values determined by the insurance companies are recognized as fair values. If at the end of the reporting period there is a match between the insurance payments made and the accrued pension benefits, the fair value of the pension liability claim from life insurance policies is recognized with the present value of the defined benefit obligations (primacy of the liabilities side).

The provisions are calculated, taking into account the respective underlying contractual agreement in each case, by qualified actuaries applying the projected unit credit method in accordance with IAS 19.

The Group is exposed to various risks in connection with the defined benefit plans. In addition to the general risks of a change in demographic assumptions, these are, in particular, interest rate risk and capital market or investment risk. There are no concentrations of risk.

Present value of pension obligations

The present value of the defined benefit obligations changed as follows:

The weighted average maturity (duration) of the defined benefit obligations was as follows:

Fair value of plan assets

The fair value of the plan assets changed as follows:

Net pension expense

The portion of the net pension expense recognized in profit or loss for the period was made up as follows:

The service cost is recognized in the consolidated statement of profit or loss as personnel expense, and the interest cost for the expected pension obligations is recognized as interest expense. The expected return on plan assets reduces the interest expense.

The actual income from plan assets as of December 31, 2022 amounted to EUR 1,559 thousand (previous year: EUR 1,378 thousand).

Actuarial parameters

The actuarial computation of the material defined benefit obligations was based on the following parameters (given in the form of weighted average factors):

The mortality rate underlying the calculation of the present value of the material defined benefit obligations was based as in the previous year on the 2018 G mortality tables by Prof. Klaus Heubeck.

Sensitivity analyses

The present value of the pension obligations depends on a number of factors based on actuarial assumptions. The net expense (or income) used in determining assumptions for pensions includes the discount rate. Any change in these assumptions will impact the carrying amount of the pension obligation.

BLG LOGISTICS determines the appropriate discount rate at the end of each year. This is the interest rate used in determining the present value of expected future cash outflows required to settle the obligation. In determining the discount rate, the Group uses as its basis the interest rates of top-rated corporate bonds that are denominated in the currency in which the benefits are paid, and with maturities corresponding to those of the pension obligation.

An increase or decrease in the principal actuarial assumptions in the amount of the expected future development would have the following effects compared to the parameters actually applied to the present value of pension obligations:

The sensitivity calculations were based on the average maturity of the pension obligations determined as of December 31, 2022. The calculations were carried out on an isolated basis for actuarial assumptions which have been identified as significant to separately illustrate the potential impact on the calculated present value of pension obligations. As the average duration of the expected pension liabilities is based on the sensitivity analyses and consequently the expected payment dates are not taken into account, they only result in approximate information or statements about trends.

Funding of pension obligations

The funding of the pension contracts entered into for the Board of Management and senior staff and the agreements for the future social concept are fully covered by reinsurance cover for pension commitments and deposits for outstanding reinsurance premiums pledged in favor of the beneficiaries. The pension contracts are solely funded by the employer; the future social concept is funded by contributions made by employees and a performance bonus paid by the employer. There is no obligation to participate in the social future concept. The port pension does not contain any plan assets.

For the subsequent financial year, the company expects payments to the defined benefit plans of EUR 1,274 thousand (previous year: EUR 2,043 thousand).

Anniversary provisions

Provisions for anniversaries take into consideration the contractually guaranteed rights of Group employees to receive anniversary bonuses. Recognition is based on actuarial reports, which make calculations based on a discount rate of 4.3 percent (previous year: 1.0 percent). The interest cost of EUR 109 thousand (previous year: EUR 117 thousand was included in the addition for the reporting year of EUR 959 thousand (previous year: EUR 599 thousand).

Other non-current provisions

Other non-current provisions amounted to EUR 23 thousand (previous year: EUR 42 thousand).

Non-current provisions with a remaining maturity of more than one year are discounted at the capital market interest rate corresponding to their maturity.

27. Trade Payables

28. Other Financial and Non-financial Liabilities

29. Current Provisions

30. Contingent Liabilities

The existing contingent liabilities at BLG LOGISTICS in favor of companies accounted for using the equity method are presented below.

Contingent liabilities are measured at their nominal amounts. Maximum guarantees are recognized at their maximum amount. Based on the relationships at the end of the reporting period, the actual contingent liabilities totaled EUR 48 thousand (previous year: EUR 49 thousand) on the basis of the underlying liabilities. The contingent liabilities primarily relate to the collateralization of credit facilities.

Comfort letters have been issued for a non-consolidated affiliated company as well as for an equity investment that was sold in the reporting year.

Taking into account the knowledge gained up to the time of preparing these financial statements, it can currently be assumed that all obligations underlying the contingent liabilities can be met by the respective principal debtors. The risk of a claim is considered low.

31. Other Financial Liabilities

Other financial obligations are measured at their nominal amounts. The order commitments result from contracts entered into for the purchase of property, plant and equipment as well as of inventories.