Report of the Supervisory Board 2023

Dear readers,

The ongoing war in Ukraine and the conflict in the Middle East kept the world on tenterhooks in 2023. High inflation and, as a result, high prices for personnel, materials and energy, as well as climate change and the persistent shortage of skilled labor, made for another challenging year. Despite this difficult environment, we were once again able to close the 2023 financial year better than originally expected. We would therefore like to extend our special thanks to all BLG LOGISTICS employees for their important contribution to this positive result in these challenging times.

In the 2023 financial year, the Supervisory Board of BREMER LAGERHAUS-GESELLSCHAFT -Aktiengesellschaft von 1877- (BLG AG) actively engaged in the duties assigned to it by law, the Articles of Incorporation and rules of procedure, and regularly and extensively discussed the company’s position and development. The Supervisory Board continuously oversaw and supported the work of the Board of Management in the financial year. The detailed reports made by the Board of Management in written and oral form constituted the basis for this. In addition, the Chairman of the Supervisory Board regularly exchanged information and ideas with the Board of Management, so that the Supervisory Board was always informed promptly and comprehensively about the intended business policy, corporate planning, the sustainability objectives, the current earnings situation, including the risk situation and risk management, as well as the position of the company and the BLG Group.

In accordance with the recommendations and suggestions of the German Corporate Governance Code (Code), the Supervisory Board supported the Board of Management in the management of the company and advised it on management matters and on sustainability matters.

Whenever management decisions or measures required approval according to law, the Articles of Incorporation or the rules of procedure, the members of the Supervisory Board – where appropriate prepared by its committees – reviewed the draft resolutions at meetings or adopted them on the basis of written information. In accordance with the recommendations of the Code, the Supervisory Board also sometimes meets without the participation of the Board of Management was intensively involved in decisions of major significance for BLG LOGISTICS from an early stage.

The economic and risk situation and the development prospects of BLG LOGISTICS described in the reports of The Supervisory Board, the Board of Management, the separate divisions and business areas as well as major long-term investees in Germany and abroad were the subject of detailed discussion.

The Supervisory Board convened at five regular meetings in 2023. The meetings of the Supervisory Board and its committees are generally held in person with the option of video sharing. In the reporting period, a total of 14 meetings of the Supervisory Board and its committees were held; two committee meetings as video conferences, the remainder face to face.

The meetings held as video conferences were brief meetings convened at short notice by the Human Resources Committee and the Investment Committee.

The overall attendance rate was 89.0 percent; no member of the Supervisory Board took part in fewer than half of the meetings (with the exception of Mr. Björn Fecker, who by reason of his court appointment in November 2023 would have been able to attend only one meeting). Average attendance (physical and virtual) at committee meetings in 2023 was 90.8 percent. The members of the Supervisory Board elected by the shareholders and by the employees in some cases prepared for the meetings in separate consultations. Details of attendance rates are shown in the table.

The Mediation Committee (committee in accordance with Section 27 (3) MitbestG (German Codetermination Act)) did not convene in the 2023 financial year. There were no conflicts of interest on the part of members of the Board of Management and the Supervisory Board that required immediate disclosure to the Supervisory Board and about which the Annual General Meeting had to be informed.

The Code recommends that members of the Board of Management shall only assume sideline activities, especially supervisory board mandates outside the enterprise, with the approval of the Supervisory Board. The assumed mandates did not give rise to any identifiable conflicts of interest; on the contrary, they were deemed to be consistently in the interest of BLG LOGISTICS.

Issues discussed in the Supervisory Board

The consultations of the Supervisory Board at its meetings in 2023 repeatedly focused on the current business development and the challenges posed by the global political tensions, high energy prices and general inflation, as well as by the supply bottlenecks at the production facilities of BLG LOGISTICS’ customers. Furthermore, important matters regarding the strategy and business activities of BLG LOGISTICS and its divisions, as well as personnel matters, were dealt with. In addition, the restructuring at AutoTerminal Bremerhaven was closely supervised and regularly discussed. In its individual meetings, the Supervisory Board continued to focus on strategic issues and geopolitical assessments, such as the expansion of the business areas, as well as BLG LOGISTICS’ further growth through new business, partnerships and investments, the company’s current risk exposure, including the risk management system and the risk-aware management of the company’s development.

In particular, at its meeting of February 23, 2023, the Supervisory Board dealt with the approval of the disposal of shares in the joint ventures in India and Malaysia. Furthermore, the list of proposed candidates in preparation for the election of shareholder representatives to the Supervisory Board at the Annual General Meeting on June 7, 2023 was discussed. Other key topics at this meeting were loan extensions and rental agreements as well as risk reporting.

In addition, at its April 20, 2023 meeting the Supervisory Board dealt intensively with the short-term variable remuneration of the Board of Management for the 2022 financial year, with the annual and combined financial statements, with the agenda for the 2023 Annual General Meeting, and with the preparation of the combined non-financial statement.

The constituent meeting of the newly elected Supervisory Board took place after the Annual General Meeting on June 7, 2023. The composition of the committees was also voted on at this meeting.

Moreover, at the meeting of September 28, 2023 the Supervisory Board deliberated the interim financial report of BREMER LAGERHAUS-GESELLSCHAFT -Aktiengesellschaft von 1877-.

The declaration of compliance with the German Corporate Governance Code was adopted at the meeting of December 14, 2023.

Corporate planning as well as short-term earnings and financial planning were also discussed in detail at the meeting on December 14, 2023. In addition, the heads of the Internal Audit and Compliance departments reported to the Supervisory Board at the meeting.

All major business transactions, the position of the company, the development of the financial position, financial performance and cash flows, as well as the budget-to-actual variance analyses for corporate planning (incl. forecasts) were discussed intensively and in a timely manner with the Board of Management.

The composition of the Supervisory Board changed as follows compared with December 31, 2022:

The regular term of office of all Supervisory Board members duly expired at the end of the Annual General Meeting on June 7, 2023. The employee representatives on the Supervisory Board were elected on April 27, 2023 in accordance with the provisions of the German Codetermination Act. The shareholder representatives were elected by way of an individual vote at the Annual General Meeting.

Mr. Ralf Finke and Mr. Olof Jürgensen, Mr. Hasan Özer, Mr. Thorsten Ruppert and Mr. Ralph Werner were newly elected to the Supervisory Board as employee representatives and Mr. Peter Hoffmeyer as shareholder representative.

At the constituent Supervisory Board meeting following the Annual General Meeting, Dr. Klaus Meier was re-elected as the Chairman of the Supervisory Board.

The previous Supervisory Board members Mr. Heiner Dettmer, Mr. Fabian Goiny, Ms. Beate Pernak, Mr. Martin Peter, Mr. Jörn Schepull and Mr. Reiner Thau stepped down from the Supervisory Board.

In addition, Dr. Claudia Schilling and Mr. Dietmar Strehl resigned their mandates with effect from November 15, 2023. Mr.Björn Fecker and Ms. Kristina Vogt were appointed to succeed them as members of the Supervisory Board by court order of the District Court of Bremen on November 27, 2023.

No former members of the Board of Management of BLG AG are represented on the Supervisory Board.

The following changes were made to the composition of the Board of Management in the 2023 financial year:

At its meeting on December 14, 2023, the Supervisory Board resolved to extend the contract with Matthias Magnor by five years.

At its meeting on February 22, 2024, the Supervisory Board additionally appointed Matthias Magnor as the new Chairman of the Board of Management from January 1, 2025 for the remaining term of his mandate until September 30, 2029. He thus succeeds Mr. Frank Dreeke, who will leave the company at the end of 2024 as he will have reached the standard retirement age for members of the Board of Management, which BLG LOGISTICS introduced in accordance with the recommendations of the Code.

Work of the committees

To perform its duties efficiently, the Supervisory Board has additionally set up four committees. These committees of the Supervisory Board are the Audit Committee, Human Resources Committee, Investment Committee and Mediation Committee in accordance with Section 27 (3) MitbestG (German Codetermination Act). They prepare the resolutions of the Supervisory Board in the plenary session and, where permissible, decide in individual cases in its place. Separate rules of procedure apply to the Audit Committee and the Investment Committee. All committees have equal representation.

The Audit Committee held two meetings in the 2023 financial year. The main subject of the meeting on April 18, 2023 was the extensive discussion and examination of the annual financial statements, the combined financial statements and the management reports for the 2022 financial year. Representatives from the auditing firm were present at the meeting when the annual financial statements were addressed and they reported on the findings of their audit. In addition, the Audit Committee discussed the appropriation of the net retained profits (in accordance with the German Commercial Code, Handelsgesetzbuch – HGB) as well as the invitation to the Annual General Meeting and submitted resolutions to the Supervisory Board.

The Audit Committee oversees the selection, independence, rotation and efficiency of the auditor as well as the services it provides and is concerned with conducting an evaluation of the quality of the audit process. Any questions in this regard are discussed in the plenary session. Furthermore, the Chairman of the Audit Committee regularly consults with the auditor and informs the full Supervisory Board of the progress of the audit. In addition, a newly designed questionnaire was used for the first time in 2021 to review the quality of the audit of the annual financial statements. As a result and since then, no impediments to the selection of PricewaterhouseCoopers GmbH, Wirtschaftsprüfungsgesellschaft, Bremen, as statutory auditor for the 2023 financial year have become known.

BLG LOGISTICS changes the auditor regularly. Within the scope of the respective tendering process, the Audit Committee considers the expertise, experience and independence of the candidates.

At its meeting on December 14, 2023, the Audit Committee dealt primarily with corporate planning, including medium-term earnings and financial planning, and the approval of non-audit services. A further focus of the activity was on reporting on the audit and on the compliance system. Representatives from the auditing firm also presented the audit risk, audit strategy and audit planning.

The Human Resources Committee held six meetings in the reporting year. At all meetings, it dealt primarily with personnel matters relating to the Board of Management. One focus of the deliberations, in addition to determining and reviewing the remuneration of the Board of Management, was on preparing the election of shareholder representatives to the Supervisory Board at the Annual General Meeting on June 7, 2023. Furthermore, at its meeting on December 12, 2023, the Supervisory Board consulted on the extension of Mr. Matthias Magnor’s contract.

The Investment Committee convened on August 22, 2023 and resolved on replacement investments in the AUTOMOBILE Division.

The Mediation Committee (committee in accordance with Section 27 (3) MitbestG (German Codetermination Act)) did not convene in the reporting year.

The meetings and resolutions of the committees were prepared on the basis of reports and other information provided by the Board of Management. Members of the Board of Management regularly took part in the committee meetings. The chairs of the committees reported to the Supervisory Board on the activities and their results following the meetings and submitted resolution recommendations.

Training and self-assessment

The members of the Supervisory Board take responsibility for undertaking any training or professional development measures necessary to fulfil their duties, for example to bring them up to speed with changes in the legal framework and new technologies, and are supported in this by BLG LOGISTICS. In-house training courses or information events for targeted further training are offered as required. In September of the 2023 reporting year, in-house training was held on the topic of compliance. New Supervisory Board members have the opportunity to meet with members of the Board of Management and managers from the individual divisions to exchange views on fundamental and topical issues and thus obtain an overview of the main topics relevant to the company (onboarding).

The Supervisory Board evaluates, at regular intervals, how effectively the Supervisory Board as a whole and its committees fulfill their tasks. The findings are discussed in depth by the Supervisory Board and, where appropriate, necessary action is taken. The last review based on a questionnaire to be completed anonymously and evaluation of the results in plenary session took place in financial year 2021. This did not give rise to any indications of significant deficits then or since. The next self-assessment is planned to for 2024.

Corporate governance and declaration of compliance

The Supervisory Board worked on the application of the German Corporate Governance Code within the company. The 24th declaration of compliance with the recommendations of the Code, dated December 14, 2023, and prepared by the Supervisory Board and the Board of Management pursuant to Section 161 of the German Stock Corporation Act (AktG), corresponds to the published amended version of April 28, 2022. The joint declaration of compliance is permanently accessible on the BLG LOGISTICS website at www.blg-logistics.com/ir in the Download area.

Audit of the annual and combined financial statements

The representatives of PricewaterhouseCoopers GmbH, Wirtschaftsprüfungsgesellschaft, Bremen, the auditing firm duly elected as auditor, were present at the Supervisory Board’s accounts meeting for the 2023 financial year and at the preparatory meeting of the Audit Committee and reported in detail on the findings of their audit.

The annual financial statements and management report as well as the set of financial statements for the purpose of fulfilling the duty to prepare consolidated financial statements of BLG AG, and the combined financial statements as well as the combined group management report of BLG LOGISTICS have been prepared by the Board of Management in accordance with the statutory provisions and in compliance with German legally required accounting principles and have been audited and issued an unqualified auditor’s report by PricewaterhouseCoopers GmbH, Wirtschaftsprüfungsgesellschaft, Bremen, the auditing firm appointed by the Annual General Meeting.

The auditing firm has reviewed the report on relationships to affiliated companies (dependent company report) prepared by the Board of Management for the 2023 financial year and issued the following auditor’s report:

“After conducting our examination and assessment in accordance with our obligations, we confirm that

1. the factual statements contained in the report are correct,
2. benefits derived by the company from the legal transactions specified in the report were not unreasonably high.”

The annual financial statements and management report, the set of financial statements for the purpose of fulfilling the duty to prepare consolidated financial statements, including the management report, the combined financial statements and combined group management report as well as the audit reports of the company’s auditor were made available to all members of the Supervisory Board in due time.

For its part, the Supervisory Board has reviewed the annual financial statements, the combined financial statements, the set of financial statements for the purpose of fulfilling the duty to prepare consolidated financial statements, the management reports and the combined group management report of the Board of Management as well as the proposal of the Board of Management concerning appropriation of the net retained profits (in accordance with HGB). The Supervisory Board concurs with the findings of the audit of the annual financial statements, the combined financial statements and the set of financial statements for the purpose of fulfilling the duty to prepare consolidated financial statements, including the management reports, conducted by the auditing firm. The Supervisory Board has approved and adopted the annual financial statements prepared by the Board of Management. The Supervisory Board has also approved the set of financial statements for the purpose of fulfilling the duty to prepare consolidated financial statements prepared by the Board of Management, as well as the combined financial statements. The Supervisory Board concurs with the management reports and in particular with the evaluation of BLG LOGISTICS’ further development. This also applies to the dividend policy and the decisions regarding reserves at BLG AG.

Furthermore, the Supervisory Board has reviewed the report of the Board of Management on the relationships with affiliated companies and the findings of the audit of this report conducted by the auditing firm. The Supervisory Board concurs with the findings of the audit of the dependent company report conducted by the auditing firm. According to the final findings of the review of the dependent company report by the Supervisory Board, there are no objections to the final statement of the Board of Management in the latter report.

Non-financial report

BLG LOGISTICS has prepared a combined non-financial statement in accordance with Section 315b HGB since the 2017 financial year. This statement for the 2023 financial year is integrated as a separate non-financial report in the 2023 sustainability report and its contents have been reviewed by the Supervisory Board. The review did not give rise to any objections. reporting.blg-logistics.com

In this once again exceptionally challenging year, the Supervisory Board would like to thank the members of the Board of Management and all employees for their high level of commitment and unswerving efforts to keep our company on a path to success. The Supervisory Board is convinced that BLG LOGISTICS will continue to master the challenges together going forward and can secure its earnings power on a long-term basis.

Bremen, April 2024

For the Supervisory Board

Dr. Klaus Meier
Chairman