Notes for the 2022 financial year

The registered office of BREMER LAGERHAUS-GESELLSCHAFT -Aktiengesellschaft von 1877- (BLG AG) is in Bremen. The company is entered in the register of the District Court of Bremen under the number HRB 4413.

General disclosures

The annual financial statements have been prepared in accordance with the provisions of Sections 242 et seq. and 264 et seq. of the German Commercial Code (HGB) and the relevant provisions of the German Stock Corporation Act (AktG).

The income statement was prepared according to the total cost (nature of expense) method (Section 275 (2) HGB).

To improve the clarity of the presentation, disclosures on entries relating to more than one item were made with explanatory notes on a separate line.

Disclosures on recognition and measurement

The following accounting policies were applied essentially unchanged for the preparation of the annual financial statements.

Receivables and other assets are reported at their nominal value. Credit risks are taken into account through recognition of specific loss allowances, wherever necessary.

Bank balances are recognized at their nominal value.

Financial assets that are immune from access by all other creditors and that serve exclusively to fulfill post-employment benefit obligations are measured at fair value and netted against provisions for pensions and similar obligations.

Reinsurance cover for pension provisions is recognized using the asset value of the overall claims reported by the insurance companies. In this respect, the asset value corresponds both to the amortized cost (payments received plus accumulated interest and surplus credits) and the fair value as of the balance sheet date. The fair value of the fund units in the premium deposit account is determined at market prices at the reporting date.

Pension provisions are measured according to the projected unit credit method using the 2018 G (previous year: 2018 G) mortality tables issued by Prof. Klaus Heubeck. If at the end of the reporting period there is a match between the insurance payments made and the accrued pension benefits, pension provisions are recognized in the amount of the carrying amount of the corresponding pension liability claims from life insurance policies (“primacy of the assets side”). The average market interest rate, which is calculated for an assumed residual term of 15 years, is used as a standard basis for discounting.

In accordance with Section 246 (2) sentence 2 HGB, these are netted against the present value of the pension obligations under provisions for pensions and similar obligations.

The actuarial valuation was based on the following parameters:

The provisions are recognized at the settlement amount necessary to cover all identifiable risks and uncertain liabilities on the basis of prudent business judgment.

Long-term provisions with a residual term of more than one year are discounted using the average market interest rate for matching maturities based on the past seven years, as published by the Deutsche Bundesbank. Long-term provisions for pension obligations with a residual term of more than one year are discounted using the average market interest rate for matching maturities based on the past ten years, as published by the Deutsche Bundesbank.

Liabilities are recognized at their settlement amounts.

Any differences between the carrying amounts of assets, liabilities, prepaid expenses and deferred income items according to commercial law and their tax carrying amounts that are expected to be reversed in later financial years are measured at the individual tax rates in the period in which the difference is reversed and the resulting tax burden or relief is recognized as deferred taxes.

The measurement of deferred tax assets depends on the estimation of the probability of the reversal of the measurement differences and the utilization of the loss carryforwards which resulted in deferred tax assets. This is dependent upon the generation of future taxable profits during the periods in which those tax measurement differences are reversed.

The option of recognizing deferred tax assets pursuant to Section 274 (1) sentence 2 HGB was applied. Deferred taxes are offset and not discounted.

Balance sheet disclosures

Receivables and other assets

Receivables from affiliated companies were owed in full from BLG LOGISTICS GROUP AG & Co. KG, Bremen (BLG KG). EUR 5,227 thousand (previous year: EUR 5,227 thousand) thereof constituted short-term loans. EUR 19,125 thousand (previous year: EUR 18,639 thousand) was attributable to receivables from cash management. Another EUR 2,515 thousand (previous year: EUR 178 thousand) related to trade receivables. As in the previous year, all receivables have a residual term of up to one year.

Receivables from other long-term investees and investors related as in the previous year to trade receivables.

Provisions for pensions and similar obligations

The provisions reported related to pension obligations for the members of the Board of Management. It has been agreed with each eligible current member of the Board of Management that in the event of their leaving the company prematurely without a benefit event occurring, there would no longer be a pro rata reduction in the defined benefit if the vesting conditions were met.

In order to enable insolvency-protected reinsurance cover or refinancing for the higher obligations resulting from the adjustment while maintaining the existing reinsurance policies, a two-tier model with additional premium deposit accounts to cover the outstanding premium payments for the reinsurance was introduced. In this model, the outstanding premium payments to the reinsurance are invested as a lump sum in a deposit (see also the following table). The instalment premiums to the reinsurer are financed from a corresponding sale of the fund units. As with the reinsurance policy, the fund units are pledged to the beneficiaries and were recognized at market value at December 31, 2022.

Following the excess of plan assets over post-employment benefit liability that arose in the previous year, the net pension obligation as at December 31, 2022 was as follows:

The addition to the pension provision includes an effect recognized as income from the first-time application of IDW Accounting Practice Statement: Measurement under German commercial law of provisions for post-employment benefit obligations resulting from reinsured direct commitments (IDW RH FAB 1.021) in the amount of EUR 112 thousand.

The difference between the recognition of provisions for pension obligations based on the corresponding average market interest rate for the past ten financial years and the recognition of provisions for pension obligations based on the corresponding average market interest rate for the past seven financial years amounted to EUR 336 thousand.

Interest income from plan assets and interest expenses from unwinding the discount were recognized in the amount of EUR 111 thousand (previous year: EUR 169 thousand).

Equity

As in the previous year, the share capital amounted to EUR 9,984,000.00 and, as in the previous year, was divided into 3,840,000 no-par value registered shares with voting rights. The accounting par value of each no-par value share is thus EUR 2.60. Transfer of the shares requires the approval of the company in accordance with Section 5 of the Articles of Incorporation.

Revenue reserves

The legal reserve is allocated in full in an amount of EUR 998,400.00.

An amount of EUR 110 thousand was withdrawn from other revenue reserves and appropriated to net retained profits (previous year: transfer to revenue reserves of EUR 2 thousand).

Existing revenue reserves fully covered the amounts subject to a restriction on distribution of EUR 336 thousand (previous year: EUR 1,035 thousand) in accordance with Section 253 (6) HGB (difference relating to the recognition of pension obligations) as well as the amounts subject to a restriction on distribution of EUR 1,222 thousand (previous year: 1,042 thousand) in accordance with Section 268 (8) sentence 2 and 3 HGB (deferred tax assets and difference between purchase cost and fair market value of the above premium deposit account).

Other provisions

Other provisions included EUR 3,916 thousand (previous year: EUR 3.040 thousand) for the variable remuneration of the Board of Management. Of this amount, EUR 2,346 thousand (previous year: EUR 1,764 thousand) had a maturity of more than one year.

In the reporting year, other provisions of EUR 373 thousand (previous year: EUR 215 thousand) were recognized for costs in connection with the Annual General Meeting, the publication of the annual financial statements and the consolidated financial statements as well as the audit of the annual financial statements. EUR 178 thousand was set aside for fixed Supervisory Board remuneration (previous year: EUR 180 thousand).

Liabilities

As in the previous year, all liabilities (including liabilities to affiliated companies) have a residual term of up to one year.

EUR 738 thousand of the other liabilities (previous year: EUR 224 thousand) related to taxes.

Deferred taxes

Deferred taxes were measured at the tax rate for BLG AG in the amount of 15.825 percent. The deferred tax assets were mainly based on differences from pension provisions. The option of recognizing excess deferred tax assets was applied.

Contingent liabilities

The company is the personally liable general partner of BLG KG. A capital contribution does not have to be made. Due to the company’s equity base and the net income expected for BLG KG in subsequent years, there was no identifiable risk of being subject to recourse.

Shareholdings

The underlying exchange rates for the shareholdings listed below attributable to BLG KG pursuant to Section 285 sentence 1 no. 11 HGB through its subsidiary BLG KG were as follows:

List of shareholdings pursuant to Section 285 sentence 1 no. 11 HGB

Income statement disclosures

Compensation from BLG KG

This item included the liability remuneration governed by the partnership agreement (EUR 1,063 thousand, previous year: EUR 1,026 thousand) and the remuneration (EUR 256 thousand, previous year: EUR 256 thousand) for the activities as general partner of BLG KG.

Other operating income

Other operating income breaks down as follows:

As in the previous year, income from the reversal of provisions related to prior periods.

Personnel expenses

Personnel expenses related to the remuneration for the Board of Management.

EUR 1,764 thousand in social security, post-employment and other employee benefit costs related to pension costs (previous year: EUR 689 thousand).

Other operating expense

Other operating expense breaks down as follows:

Other personnel expenses in the reporting year included expenses from severance agreements in the amount of EUR 1,451 thousand.

Other interest and similar income

As in the previous year, this item related in full to interest income from affiliated companies.

Interest and similar expenses

As in the previous year, this item related in full to interest cost. EUR 7 thousand (previous year: EUR 0 thousand) related to the interest cost in respect of variable remuneration components due to the Board of Management for prior periods.

Other disclosures

Off-balance-sheet transactions

There were no transactions that were not contained in the balance sheet as of December 31, 2022.

Other financial liabilities

There were no other financial liabilities as of December 31, 2022.

Auditor’s remuneration

The total remuneration for the auditor’s services in the 2022 financial year amounted to EUR 88 thousand. Of this amount, EUR 80 thousand related to the audit and EUR 8 thousand to other assurance services (audit of the remuneration report pursuant to Section 162 AktG).

Related party disclosures

Transactions with shareholders

Relationships with the Free Hanseatic City of Bremen (municipality)

As of December 31, 2022, the Free Hanseatic City of Bremen (municipality) was the majority shareholder of BLG AG with a 50.4 percent share of the subscribed capital. The Free Hanseatic City of Bremen (municipality) received a dividend as a result of the resolution on the appropriation of net retained profits for 2021.

Transactions with affiliated companies, joint ventures and associates

There were no transactions with affiliated companies, joint ventures and associates in the reporting year conducted other than on an arm’s length basis.

Board of Management and Supervisory Board

Composition of the Supervisory Board

In accordance with the Articles of Incorporation, the Supervisory Board of BLG AG comprises 16 members, namely eight Supervisory Board members elected in accordance with the provisions of the German Stock Corporation Act (AktG) and eight Supervisory Board members representing the employees, who are elected in accordance with the provisions of the German Codetermination Act (MitbestG).

The composition of the Supervisory Board and the memberships of the Supervisory Board members in other bodies in accordance with Section 125 (1) sentence 5 AktG are presented in Annex 1 to the notes.

The composition of the Supervisory Board changed as follows compared with December 31, 2021:

Klaus Pollok resigned as a member of the Supervisory Board with effect from December 31, 2021. He was replaced as of January 1, 2022 by Fabian Goiny. Fabian Goiny had been elected as a substitute member for Klaus Pollok in 2018.

Vera Visser resigned as a member of the Supervisory Board with effect from February 28, 2022. Martin Peter was appointed to succeed her as a member of the Supervisory Board by court order of the District Court of Bremen on March 11, 2022.

Udo Klöpping resigned as a member of the Supervisory Board with effect from July 15, 2022. Tim Kaemena was appointed to succeed him as a member of the Supervisory Board by court order of the District Court of Bremen on September 8, 2022.

Composition of the Board of Management

The composition of the Board of Management and the memberships of the Board of Management members in other bodies in accordance with Section 125 (1) sentence 5 AktG are presented in Annex 2 to the notes.

The following changes were made to the composition of the Board of Management compared with December 31, 2021:

At its meeting on February 24, 2022, the Supervisory Board resolved to extend the contract with Frank Dreeke for two years, until he reaches the statutory retirement age for Board of Management members. He is now appointed until December 31, 2024.

Andrea Eck, originally appointed until December 31, 2024, left the company at her own request with effect from December 31, 2022. She resigned from her seat on the Board of Management at the end of August 31, 2022. CEO Frank Dreeker had assumed responsibility for management of the AUTOMOBILE Division in the interim. At an extraordinary meeting on November 10, 2022, the Supervisory Board resolved to create the new position of Chief Operating Officer (COO) in the company, responsible for overseeing operating business at Board of Management level. In line with the “one face to the customer” principle, the two Board of Management divisions AUTOMOBILE and CONTRACT were merged. When it came to filling this position, the Supervisory Board decided in favor of Matthias Magnor, who has been responsible on the Board of Management for the CONTRACT Division since October 1, 2021. He took over the position of COO with effect from December 1, 2022.

At its meeting on December 15, 2022, the Supervisory Board resolved to extend the contract with Christine Hein for a further five years. She is now appointed until October 31, 2028.

Transactions with the Board of Management and the Supervisory Board

Transactions with the Board of Management and Supervisory Board were limited to services rendered in connection with the Board positions and employment contracts and the remuneration paid for these services.

The members of the Supervisory Board received remuneration of EUR 291 thousand in the 2022 financial year (previous year: EUR 286 thousand), of which EUR 164 thousand (previous year: EUR 165 thousand) was attributable to fixed components. The meeting allowances came to EUR 78 thousand (previous year: EUR 63 thousand, the remuneration for services on committees to EUR 14 thousand (previous year: EUR 14 thousand) and the remuneration for in-Group Supervisory Board seats to EUR 35 thousand (previous year: EUR 44 thousand).

The members of the Supervisory Board representing the employees received EUR 37 thousand (previous year: EUR 34 thousand) in contributions to statutory retirement plans in the reporting year.

As of December 31, 2022, as in the previous year, members of the Supervisory Board had not been granted any loans or advance payments. As in the previous year, no contingent liabilities were contracted for the benefit of the members of the Supervisory Board. Travel expenses were reimbursed to the customary extent.

For the 2022 financial year, the Board of Management received total remuneration of EUR 3,870 thousand (previous year: EUR 3,892 thousand). This included basic remuneration, fringe benefits and variable remuneration components payable in the short term. In addition, provisions of EUR 1,494 thousand (previous year: EUR 1,743 thousand) were recognized as of December 31, 2022 for long-term variable remuneration components for the 2022 financial year. Of this amount, EUR 516 thousand related to the transitional arrangement for Board of Management members appointed before 2020. On attainment of the target in the reporting year, the respective entitlement for the reporting year was recognized in the provisions. This amount was included in the measurement of the multi-year remuneration components for the 2022 reporting year (transitional arrangement and long-term component). The actual payment was measured against the target attainment determined by the Supervisory Board on the basis of the applicable remuneration system over the multi-year period to be measured of two years (transitional arrangement) or four years (long-term component). The determination was based on financial (70 percent weighting) and environmental and social (30 percent weighting) performance criteria.

The members of the Board of Management were granted pension entitlements, some of which are against companies of the BLG Group. Otherwise, the entitlements are against related entities. Pension obligations toward former Board of Management members are likewise obligations against related entities.

As of December 31, 2022, the present value of pension obligations pursuant to the German Commercial Code (HGB) for active members of the Board of Management at December 31, 2022 amounted to EUR 4,751 thousand (previous year: EUR 5,150 thousand).

Further information and remarks concerning the individual remuneration of the Board of Management and Supervisory Board members is publicly accessible on our website www.blg-logistics.com/en/investor-relations in the Download area.

For former members of the Board of Management, expenses totaling EUR 1,451 thousand were also recognized in connection with severance agreements. The present value of pension obligations pursuant to HGB for former members of the Board of Management totaled EUR 6,696 thousand as of December 31, 2022.

As was the case in the previous year, members of the Board of Management had not been granted any loans or advance payments as of December 31, 2022. Similarly, as in the previous year, no contingent liabilities were contracted for the benefit of the members of the Board of Management.

The Supervisory Board and Board of Management remuneration systems are available on our website www.blg-logistics.com/en/investor-relations under Corporate governance.

Director’s dealings

According to Article 19 of the EU Market Abuse Regulation, members of the Board of Management, the first tier of management and the Supervisory Board are required as a matter of principle to disclose their own transactions with shares of BLG AG or related financial instruments.

The shareholdings of these persons amount to less than one percent of the shares issued by the company. There were no purchases and sales requiring disclosure during the reporting year.

Voting rights notifications

The following voting rights notifications from direct or indirect investments in the capital of BLG AG were reported to the Board of Management of BLG AG:

On February 7, 2019, the Free Hanseatic City of Bremen (municipality) notified us pursuant to Section 33 (1) of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG) that its share of voting rights in BLG AG amounted to 50.42 percent (corresponding to 1,936,000 voting rights) as of January 31, 2019.

On February 7, 2019, Peter Hoffmeyer notified us pursuant to Section 33 (1) WpHG that the voting rights share of Panta Re AG, Bremen, in BLG AG exceeded the threshold of 10 percent on January 31, 2019, and at that time amounted to 12.61 percent (corresponding to 484,032 voting rights). All voting rights are attributable to Peter Hoffmeyer pursuant to Section 34 (1) sentence 1 no. 1 WpHG.

On November 18, 2016, the Waldemar Koch Foundation, Bremen, notified us pursuant to Section 21 (1) WpHG (old version) that its share of voting rights in BLG AG exceeded the threshold of 5 percent on November 15, 2016, and at that time amounted to 5.23 percent (corresponding to 200,814 voting rights.)

On April 8, 2002, Finanzholding der Sparkasse in Bremen, Bremen, notified us pursuant to Section 41 (2) sentence 1 WpHG (old version) that as of April 1, 2002 its share of voting rights in BLG AG amounted to 12.61 percent (corresponding to 484,032 voting rights)

Further details are published on our website at www.blg-logistics.com/en/investor-relations/share.

Proposal on the appropriation of net profit

The Board of Management and Supervisory Board will submit the following dividend distribution proposal to the Annual General Meeting on June 7, 2023: distribution of a dividend of EUR 0.28 per no-par value registered share (which corresponds to around 10.8 percent per no-par value share) for the 2022 financial year, corresponding to the net retained profits of EUR 1,075 thousand.

Consolidated financial statements

The company, together with BLG KG as the joint parent enterprise, prepared consolidated financial statements as of December 31, 2022 in accordance with IFRSs, as adopted by the European Union, as well as the additionally applicable provisions of German commercial law as set forth in Section 315e (3) HGB in conjunction with Section 315e (1) HGB. Furthermore, it prepared financial statements for the purpose of fulfilling the actual duty to prepare consolidated financial statements (financial statements in accordance with Section 315e HGB). Both sets of financial statements are published in the Company Register and are available at the headquarters of the company in Bremen.

German Corporate Governance Code

The 22nd declaration of compliance with the German Corporate Governance Code, as amended on April 28, 2022, was issued by the Board of Management on August 30, 2022 and by the Supervisory Board of BLG AG on September 15, 2022. On this basis, the Board of Management issued a 23rd declaration of compliance with the Code, as amended on April 28, 2022 on November 29, 2022 and the Supervisory Board of BLG AG followed suit on December 15, 2022, as the creation of the position of a Chief Operating Officer had made amendments necessary.

Report on post-balance sheet date events

No events of particular significance that could be expected to materially influence the financial position, financial performance and cash flows at December 31, 2022 occurred between the end of the reporting period and the preparation of the annual financial statements on March 30, 2023.

Bremen, March 30, 2023

BREMER LAGERHAUS-GESELLSCHAFT
-Aktiengesellschaft von 1877-

THE BOARD OF MANAGEMENT

Frank Dreeke

Michael Blach

Christine Hein

Matthias Magnor

Ulrike Riedel