The 2023 financial year – like those that preceded it – was another challenging one for the logistics industry. The wars and crises around the world, high inflation and declining transport volumes were the main factors contributing to the difficult business environment (see SCI Verkehr, SCI Logistics Barometer, December 2023)
Report on financial position, financial performance and cash flows
In accordance with its corporate function, BLG AG lent all cash funds available to it to BLG KG for proportionate financing of the working capital necessary for the provision of its services. This essentially takes place via the central cash management of BLG KG, in which BLG AG is included. The interest on the funds provided was based on unchanged conditions, although the conditions for cash management are variable above a minimum interest rate and were adjusted upwards twice in the reporting year. Due to the higher interest rates and resulting higher interest on cash management balances, interest income from this increased significantly by EUR 527 thousand compared to the previous year.
In the reporting year, BLG AG received liability remuneration (EUR 1,053 thousand; previous year: EUR 1,063 thousand) and remuneration for management activities (EUR 884 thousand; previous year: EUR 256 thousand) from BLG KG. Compensation accruing to the members of the Board of Management and the Supervisory Board is reimbursed in full by BLG KG.
Earnings per share of EUR 0.51
The earnings per share are calculated by dividing the net income for the year by the average number of shares outstanding during the financial year. Unchanged from the previous year, there were 3,840,000 registered shares outstanding during the 2023 financial year.
In the outlook as of December 31, 2022 and in the interim report as of June 30, 2023, earnings (EBT) for the financial year 2023 were forecast to be significantly higher than for the 2022 financial year. Earnings before taxes in the 2023 financial year ultimately increased quite substantially year on year by EUR 1,109 thousand. One reason for this is the above-mentioned higher interest income for cash management balances. Furthermore, BLG KG reported significantly higher accounting profit, so that the remuneration for management activities of EUR 884 thousand (previous year: EUR 256 thousand) for BLG KG was once again above the minimum remuneration level.
In the previous year, personnel expenses and other operating expense in particular were higher, accounted for by the fact that retired Board of Management member Andrea Eck was still receiving a regular salary in the first eight months of the previous year and variable remuneration components were settled in December 2022 as part of the severance agreement. Accordingly, the reimbursements from BLG KG (other operating income) were also higher in the previous year.
Refinancing for pensions/fair-value remeasurement
In order to enable insolvency-protected reinsurance cover or refinancing for the pension obligations, a two-tier model with additional premium deposit accounts to cover the outstanding premium payments for the reinsurance was introduced. At December 31, 2023, the fair-value remeasurement led to an increase in the carrying amount of the premium deposit account for 2023, after taking the planned premium withdrawals into account. In addition, deposits were made for a new commitment. On the income side, this did not lead to additional or reduced income for BLG AG, as all expenses and income from this are assumed by BLG KG.
The above-mentioned new commitment for one member of the Board of Management also led to an increase in pension obligations – despite the persistently high interest rate level slightly above the previous year.
The measurement of pension provisions as at December 31, 2023 resulted as in the previous year in the amount of the pension obligation and the asset value being reported on a net basis in the financial statements on the assets side in accordance with Section 315e HGB. Accordingly, the recognized settlement amount (obligation) due to BLG KG was adjusted in accordance with Section 315e to reflect the measurement differences between HGB and IFRSs. In the German GAAP annual financial statements, the time value of money is less of a factor, so that the netted amount of the pension obligation and the asset value is recognized as an obligation on the liabilities side.
Provisions for variable remuneration
The currently valid remuneration system for members of the Board of Management was introduced retroactively from January 1, 2021. The previous system was terminated with retroactive effect from December 31, 2020 and the variable remuneration components agreed under it will, accordingly, no longer be paid out.
The switch to the new Board of Management remuneration system in accordance with the provisions of the Act on the Implementation of the Second Shareholders’ Rights Directive (ARUG II) with short-term and long-term target components leads to a significant increase in provisions, as the transfers for the long-term remuneration components are no longer made in installments over time, but become due in the full amount when the target agreement is concluded.
On the basis of the remeasurement as of December 31, 2023, the existing provisions for variable remuneration for the financial years 2021 and 2022 were adjusted slightly. Furthermore, on the basis of the target figures achieved to date, provisions of EUR 2,095 thousand (under German commercial law EUR 2,170 thousand) were recognized for variable remuneration components for the financial year 2023. All expenses relating to the Board of Management remuneration were reimbursed by BLG KG by way of offsetting and recognized in other operating income. Measurement differences between HGB and IFRSs are also reflected here in the above settlement amount due to BLG KG.
There were no other significant changes in income and expense or in the financial position and cash flows compared with the previous year.