Report on Economic Position

Macroeconomic conditions

Momentum of global economy dampens

After an overall weak economic year in 2023, the global economy continued to grow at a very moderate pace in 2024. Although the economy expanded significantly in the United States, spurred by high domestic demand and government consumption, output growth in the other economies remained low. The same is true of the large Chinese economy, which has been slow to expand.

In the end, the global economic expansion in 2024 was once again driven by services. Global industrial production and trade in goods lost considerable momentum, particularly in the second half of the year.

In the eurozone, economic activity and the economic growth remained at a low level on the whole. The slight increase in gross domestic product (GDP) was due, in particular, to special developments such as the Olympic Games in France. The UK economy followed a similarly weak trajectory.

On the whole, industrial production and business sentiment in the eurozone at the end of 2024 underscored the subdued economic development.

In 2024, economic momentum in the emerging economies remained in sync overall, albeit with regional differences.

German GDP falls again in 2024

Year-on-year change in real GDP

Overall, Germany’s gross domestic product (GDP) dipped again in the 2024 reporting year, at -0.2 percent.

This was due in particular to high borrowing costs. In addition, heightened economic policy uncertainty and severely underutilized capacities weighed on investments. The reduced competitiveness of German industry and high competitive pressure, particularly from China, were reflected in declining exports. Households held back on spending despite strong wage growth. As a result, the saving rate increased, while private consumption increased only slightly.

German industry is currently under great pressure to adapt to changing structural conditions. Despite recovering somewhat, foreign demand remained very subdued at the end of the year and the business climate determined by the ifo Institute deteriorated once again.

While private consumption and the related services provided a positive stimulus in the last quarter of 2024, these were held back by the geopolitically uncertain situation.

Sources for this section:
Deutsche Bundesbank, Monthly Report, January and February 2025
IfW Kiel, Kiel Institute Economic Outlook, No. 119 (2024|Q4)
IMK, IMK Report No. 193, December 2024

Situation in the logistics sector

The demands on logistics are changing at an ever-increasing pace. These changes are being driven by ongoing globalization, shorter product life cycles, digitalization, artificial intelligence (AI) and urbanization. As a result, the sector continues to benefit from the increasing demand for logistics services, which is amplified by the growth in e-commerce business and reverse logistics processing in the business-to-consumer segment. Challenges concern, in particular, continued pressure on margins, demographic trends and growing competition in the search for specialists, managers and young talent. Other factors are the growing importance of online retail, increasing customer requirements with regard to speed, flexibility and the quality of supply, and increasing environmental consciousness among the population. The sector is currently experiencing staff shortages particularly in the areas of warehouse workers, truck drivers, locomotive drivers and IT managers.

In addition, when it comes to outsourcing activities, logistics companies are expected to be very willing to invest and highly innovative. A key focus here is to invest in transshipment, distribution and order-picking centers in conveniently situated locations. Contracts with customers are frequently concluded with terms of only a few years and space and handling equipment are often rented or leased.

Increasing customer requirements have greatly expanded the use of end-to-end information and communication technology along the process chains. Logistics service providers must increasingly adapt to changes such as the growing role of advancing automation and digitalization of process chains.

The logistics industry in Germany is the largest sector of the economy after the automotive industry and retailing. In addition to the importance of logistics services for industry and trade, the sector benefits from traditionally high exports, Germany’s central location in Europe and the country’s resulting role as a hub. Current risks include trade wars and protectionism, which would restrict global trade.

The current business situation at the end of 2024 for logistics service providers and their customers from industry and trade remains difficult. In particular, a weak order situation, including a drop in demand from China, poses challenges for manufacturing companies in Germany first and foremost. For example, the powerhouse German automotive industry produced significantly fewer vehicles than in the years before the COVID-19 pandemic.

The most recent BVL logistics indicator shows a slight upward trend in the business climate of German logistics companies at the end of the year (see chart in the outlook). Despite geopolitical uncertainties and structural crises, sentiment surrounding business expectations for the coming months has brightened slightly.

The global economy is based on finely tuned and interwoven logistics chains spanning the globe. This global network of supply chains is very fragile and could be severely tested again by the emergence of trade restrictions. In line with economic activity, the SCI Logistics Barometer performance indicator at the end of 2024 was slightly above the year-end value of 2023 yet once again remained negative.

The development over the course of the year was volatile and largely influenced by the uncertainty in the logistics sector due to the aforementioned factors such as economic weakness, low transport volumes and an overall tough market environment.

At the end of 2024, a high proportion of 48 percent of respondents rated the current business situation as “poor”, while 32 percent characterized it as “normal” and 20 percent as “good”. In addition to the global crises, increasing costs and the ever-growing shortage of skilled staff were key factors in this assessment.

Sources for this section:
BVL Logistics Indicator 4th Quarter 2024, including commentary
SCI Verkehr, SCI Logistics Barometer, December 2024

Board of Management’s overall assessment of the economic environment

Due to the ongoing war between Russia and Ukraine and the conflicts in the Middle East and the Red Sea, BLG LOGISTICS anticipated another challenging year in its planning for the 2024 financial year, based on the continuing uncertainties at the start of 2024 which stemmed from persistently high interest rates, the impending U.S. presidential elections and the fact that consumer confidence remained low. The global economic and geopolitical dynamic in the reporting year confirmed this projection. A series of crises took precedence on the global political stage.

Nevertheless, BLG LOGISTICS closed the 2024 financial year far better than anticipated, which, given the large number of crises and challenges, was again a commendable performance.

However, we know that the economic uncertainties are likely to continue or even grow. As a logistics service provider and port operator, we are feeling the effects of these economic developments. Nevertheless, with our three divisions and our diversification, we are well positioned.

In the AUTOMOBILE Division, volumes in vehicle handling and transport were significantly below the expected values and undercut the previous year’s level in the 2024 financial year. This is due in particular to the economic situation and the challenges facing automotive manufacturers. Nevertheless, the results achieved by the AUTOMOBILE Division once again marked an improvement compared to the previous year. There are multiple reasons for this, including:

• In the seaport terminals, we are dependent on the global market and not exclusively on developments in Germany;
• Good capacity utilization at the seaport in the inland terminals on the whole, in particular with regard to technical services led to improved contributions to earnings;
• There is a general trend for car makers to increasingly outsource more activities to (logistics) service providers;
• Unplanned spot transactions and an optimized mix of in-house and external services in our service portfolio
• Despite some severe infrastructure disruptions (construction sites, closures, etc.) and the continuing shortage of truck drivers and train drivers, many cars continued to be transported by road and rail.

The CONTRACT Division provides contract logistics at more than 40 locations in Germany and around the world. Since the organizational restructuring at the beginning of 2024, the locations and countries have been integrated into a regional structure. This organization is divided into eight regions within Germany and is split into three key sectors: Consumer & Fashion, Industrial & Energy and Mobility.

Consumer goods and e-commerce services in particular were again in demand. On the whole, the CONTRACT Division failed to meet expectations in the 2024 financial year. In the reporting year, higher volumes, increased productivity and additional business were unable to fully compensate for sometimes sharp declines in volumes due to reduced demand, particularly when it came to car part logistics and other industrial logistics at individual locations, as well as various one-off effects. At present, the market does not show any signs of rebounding. Even at the port of Neustadt, the expected volumes and revenues could not be achieved, primarily due to a weak start to the year.

Despite the difficult economic situation and geopolitical crises, the CONTAINER Division was able to close the 2024 financial year with earnings significantly above expectations. The EUROGATE Group benefited from additional earnings from storage fees and reefer revenues, which resulted in particular from the continuing crisis situation in the Red Sea and the resulting schedule deviations among shipping companies.

On the whole, the inland container terminals of the EUROGATE Group handled slightly more containers than expected in the reporting year. Compared with the previous year, the increase came to around 11 percent. The structural and lasting changes in the container industry and shipping company alliances continued in the reporting year. Competition for container volumes is becoming increasingly tough, making it imperative to forge ahead with implementing the transformation measures aimed at stabilizing the future of the EUROGATE GROUP.

The trend on the part of the shipping lines to commission additional ultra-large shipping vessels continues unabated. Given this trend, the EUROGATE Group is also expected to see an increase in the number of ultra-large container ships calling at its terminals.

Overall, thanks to its diversification, BLG LOGISTICS was able to leverage the opportunities that 2024 presented and initiated many changes that make us – even in times of multiple crises – robust, agile and fit for the future.

BLG LOGISTICS sees potential for growth arising from, for example:

• New customers such as Chinese manufacturers
• New shipping companies entering the market
• OEMs’ new sales strategies that result in new logistics requirements
• Changes in the fleet and mobility market
• The strengthening of loading segments such as high & heavy, project logistics or
• Logistics for alternative energy sources (carbon capture/offshore wind farms)

Nevertheless, BLG LOGISTICS continues to operate in a volatile market environment. To enable us to meet these challenges, we are continuing to relentlessly tackle topics such as the flexibility of our business model with the aid of digitalization/artificial intelligence, automation and sustainability, and are working intensively to constantly improve BLG LOGISTICS’ economic position.

This assessment is based on the results of the combined financial statements for 2024 and takes into account business performance up to the time the combined group management report was prepared in 2025. The business development at the beginning of 2025 was in line with our expectations.

Business performance

Financial performance

Revenue development

(in EUR thousand)

In the 2024 financial year, combined Group revenue increased only slightly by EUR 10,629 thousand year on year to EUR 1,220,664 thousand. Volumes, which fell across the board due to the muted economy, were able to be offset by storage fees, among other things.

This revenue increase was attributable in particular to the AUTOMOBILE Division, which grew by EUR 45,651 thousand to EUR 687,534 thousand. The increases in revenue here are primarily attributable to higher income in the transport segment and technical services, and to increased storage fees. In contrast, the CONTRACT Division in particular had to contend with declining volumes at its facilities where we provide logistics services to the automotive industry. This had a significant impact on sales revenues, which fell in this segment by EUR 33,522 thousand year on year.

With a significant rise in the volume of turnover among the fully consolidated companies in Germany, the CONTAINER Division recorded a 12 percent increase in Group revenue to EUR 338,104 thousand (previous year: EUR 301,914 thousand). Apart from the slight increase in handling volumes, the rise in revenue was mainly attributable to significantly higher income from storage fees. Since the EUROGATE Group, which represents the CONTAINER Division, is included in the combined financial statements using the equity method, this revenue is not included in the reported combined Group revenue.

Other income was EUR 3,131 thousand higher than in the previous year. Compared with 2023, higher income (EUR 2,932 thousand) was generated from the disposal of property, plant and equipment through the sale of trucks generated, among other things. In addition, higher income from inventory and price differences (EUR +1,871 thousand), exchange rate gains (EUR +749 thousand), and recycling (EUR +326 thousand), along with other factors, generally helped to offset lower income from reversals of liabilities (EUR -3,281 thousand) compared with 2023 and lower income from the recharging of expenses (EUR -1,671 thousand).

Net profit from equity-accounted entities amounting to EUR 63,645 thousand (previous year: EUR 21,374 thousand) primarily included the net investment income from the measurement of EUROGATE GmbH & Co. KGaA, KG (EUROGATE) accounted for using the equity method at EUR 61,190 thousand (previous year: EUR 18,202 thousand). For further information concerning the substantial year-on-year increase, please refer to the remarks below relating to the CONTAINER Division.

At -13.2 percent, the cost of materials has changed substantially year on year compared with revenue, which increased by 0.9 percent. This development can largely be attributed to the lower engagement of third-party services (subcontractors) due to lower volumes spurred by economic factors in many places. As a result, costs for purchased services were down EUR 40,682 thousand year on year. There was also a lower need to compensate for capacity peaks in industrial logistics, for example. Expenses for third-party personnel fell by EUR 16,190 thousand.

Personnel expenses rose significantly in the reporting year to EUR 526,922 thousand (previous year: EUR 492,174 thousand). The rise was primarily attributable to new collective wage agreements, which led to an increase in the basic remuneration for employees, while the number of employees fell slightly (-3.2 percent).

Other expenses in the reporting year were up EUR 32,302 thousand, primarily as a result of higher one-time effects (expenses for expected losses up by EUR +16,826 thousand) and significantly higher IT costs owing to additional projects and external resources (EUR +13,609 thousand) along with an increase in personnel expenses to cover restructuring measures and obligations from job security measures (EUR +10,231 thousand).

Depreciation, amortization and impairment decreased by EUR 1,897 thousand in the 2024 financial year. Current depreciation and amortization expense remained in line with the previous year, amounting to EUR 47 thousand. By contrast, total impairment losses fell by EUR -1,944 thousand, EUR 4,450 thousand of which related to buildings and related assets.

Net financial income/net finance costs declined year on year by EUR 1,454 thousand to EUR -11,551 thousand. A particular reason for this is higher interest expenses for lease liabilities (regarding right-of-use assets; EUR +1,711 thousand). Interest income from bank balances offset the higher interest rates for non-current loans resulting from the increase in the general level of interest rates.

Earnings (EBT) in the AUTOMOBILE and CONTAINER Divisions showed a marked improvement (see disclosures below). Overall, EBT increased substantially year on year by EUR 55,696 thousand. EBIT rose accordingly year on year by EUR 57,150 thousand to EUR 103,342 thousand. The EBT margin in the 2024 financial year therefore came to 7.5 percent (previous year: 3.0 percent).

Income taxes in the reporting year were EUR 5,975 thousand (previous year: EUR 2,665 thousand). This increase is due, in particular, to higher current tax expenses (EUR -4,103 thousand), while income from deferred taxes (+EUR 793 thousand) improved slightly.

As a result of the developments described, the Group’s earnings after tax rose by EUR 52,386 thousand to EUR 85,816 thousand.

AUTOMOBILE Division

Vehicles handled

(in millions)

Along the global value chains of the automotive industry, as described above, various factors influenced developments in the AUTOMOBILE Division in the 2024 financial year. Due to the economic and geopolitical framework conditions, the volume of vehicles handled, transported and technically processed fell by 0.6 million compared to the previous year to roughly 4.4 million vehicles. Nevertheless, net profit recorded a substantial improvement as described below.

In the seaport terminals business area, overall throughput fell below the persistently low levels recorded in previous years. The car terminal in Bremerhaven processed around 1.3 million vehicles, roughly 15 percent less than in the previous year, primarily due to the economic climate. Turnover at the Cuxhaven AutoTerminal fell even further in percentage terms. Despite these developments, the business area closed the 2024 financial year significantly above expectations. One-time business, additional storage fee revenues and value-adding technical services had a particularly positive impact in this regard. Furthermore, significantly fewer external personnel were required than planned and maintenance expenses were not incurred in line with the forecast due to the lack of internal and external resources. In Cuxhaven, the terminal’s earnings were also positively influenced by permanently leased space and special orders. In the high & heavy segment, the handling volume was also slightly below the previous year’s level as a result of the economic situation.

Vehicle handling remained at the previous year’s level in the inland terminals business area, largely due to stable customer volumes, spot transactions, optimal capacity utilization and enhanced value creation through technical services. Additional new transactions contributed positively to the results. As a result, the business area ended the 2024 financial year well ahead of initial projections.

The AutoTransport business area experienced a downturn in the volumes of goods transported by truck and shipped by inland waterway vessels. This was largely compensated by spot transactions at reasonable rates, by the sale of trucks and, above all, by the reduced use of subcontractors, whose remuneration had recently increased due to tight market capacities.

Conversely, the rail business area faced numerous obstacles. A lack of available lines due to construction works and route closures, maintenance costs, a shortage of skilled locomotive drivers at the unloading terminal and in the repair shop and at times high absenteeism rates had a significant impact on productivity and earnings. Additionally, lower volumes compared with the previous year due to the economic climate meant that the rail business area was unable to fully meet projected performance expectations in the reporting year.

In the Southern/Eastern Europe business area, the Gdansk location profited from one-time transactions and was therefore able to offset volumes that were lower than expected. Accordingly, the business area was able to close 2024 above expectations.

Due to the developments described above, especially in the seaport terminals business area, EBT in the AUTOMOBILE Division for the 2024 financial year, at EUR 64,297 thousand, was substantially higher than the previous year’s figure of EUR 36,182 thousand and therefore also above expectations.

CONTRACT Division

In an environment characterized by multiple crises, the CONTRACT Division was unable to improve on the strong results recorded in the previous year in the 2024 financial year. In many places, the order situation and volumes handled in car parts logistics were significantly below expectations as a result of the economic climate. One-off effects such as adjustments for impairment also had an impact on earnings. Successful locations in the consumer goods industry as well as additional and new business generated were unable to fully compensate for this.

At our largest industrial logistics site in Bremen, the CKD (completely knocked down) and body-in-white areas continued to face challenges throughout the 2024 financial year. These facilities were affected by reduced volumes, productivity issues and the shortfall of projected volumes. It was possible to mitigate the effects of this through countermeasures such as cost reductions, restructuring and process improvements.

At the retail logistics sites, volumes in the fashion market segment sometimes fell below expectations; however, these were on the whole offset by stable business at other sites with established customers. The fashion segment was also adversely affected by impairment losses and restructuring expenses.

At the port of Neustadt in Bremen, the volume of tonnage handled (onboard handling) was lower year over year at 1.3 million tons overall, slightly below expectations. Low tonnage in the first two months of 2024 is the primary reason behind this decline.

At our overseas industrial logistics sites, the South African site in particular has once again continued on its positive trajectory. The site was able to close the year much better than originally expected. In contrast, the US business closed the 2024 financial year on a negative, as a result of vacancy costs and other factors.

Overall, the CONTRACT Division failed to meet expectations in the challenging climate. EBT of EUR -2,786 thousand was down EUR 12,208 thousand year on year.

CONTAINER Division

In addition, EUROGATE became a shareholder in the “Damietta Alliance Container Terminal S.A.E.” joint venture in 2022, which will be responsible for realizing the construction, development and operation of a new terminal in the port of Damietta in Egypt.

The CONTAINER Division’s business mainly involves container handling. Complementary services are also provided in the form of intermodal services, such as the carriage of sea containers to and from the terminals, repairs, depot storage and trading of containers as well as cargomodal services and technical services.

The following figures correspond to the 50 percent ownership interest in EUROGATE.

Given the significant rise in the handling volumes among the fully consolidated companies in Germany, EUROGATE recorded a 12 percent boost in revenue to EUR 338.1 million (previous year: EUR 301.9 million). In addition to the notable increase in handling volumes, the rise in revenue was mainly attributable to significantly higher income from storage fees.

Against this backdrop, the operating result (EBIT) rose significantly to EUR 76,072 thousand (previous year: EUR 27,431 thousand). The change in the commitments from TEU guarantees, for which a provision of EUR 3.8 million was made in the previous year and which resulted in income of EUR 19.2 million once it was no longer applicable, was also a decisive factor here. Overall, earnings from associates and joint ventures improved substantially to EUR 4.0 million in total in the reporting period (previous year: EUR -0.3 million) along with an uptick in other financial income of EUR 1.2 million (previous year: EUR -0.1 million) and net profit for the year, which came to EUR 61.2 million (previous year: EUR 18.3 million).

The volume of turnover at German EUROGATE Group sites was projected to increase in 2024 as of last year’s forecast date. This outlook was largely based on assumptions made by the partners and customers of local joint ventures. The realized turnaround development confirmed these expectations with a significant increase in turnover volumes at all German sites.

In the 2024 financial year, EUROGATE was forecast to achieve significantly reduced but still positive earnings due to the general conditions which its subsidiaries and associates were subject to and the one-off effects arising from the reversal of provisions included in its previous year’s earnings. However, earnings on the whole developed much better than anticipated at the time of the 2024 outlook due to the improvement in handling volumes compared to the forecast, earnings from the reversal and derecognition of liabilities, and the substantial increase in income from storage fees.

The result from the equity-method inclusion, reflecting the development of the proportionate equity, stood at EUR 61,190 thousand, which was substantially higher than the previous year’s figure of EUR 18,202 thousand.

Comparison of financial performance in 2024 against the forecast for the 2024 financial year

In this very uncertain environment, BLG LOGISTICS initially assumed that sales revenues could increase slightly from 2023 levels, but that earnings (EBIT and EBT) would likely be substantially lower. We also forecast the development of RoCE and EBT margin accordingly.

As the table and descriptions above show, the projections for the 2024 financial year were largely exceeded. The positive earnings performance of the AUTOMOBILE and CONTAINER Divisions described above, in particular, resulted in an overall result that was significantly higher than expected and substantially higher than the previous year at EUR 91,791 thousand (EBT). The RoCE and EBT margin also reflected this trend.

Assets and liabilities

Balance sheet structure

At the end of the reporting year, total assets came to EUR 1,408,040 thousand and were therefore around 10 percent higher than the previous year’s figure of EUR 1,317,368 thousand.

In respect of property, plant and equipment, total capital expenditure on non-current intangible assets and property, plant and equipment amounted to EUR 78,478 thousand in the 2024 financial year (of which EUR 39,555 thousand was non-cash in the period under review). This compares to divestments of EUR 7,730 thousand and depreciation, amortization and impairment losses in the amount of EUR 82,662 thousand, which were EUR 1,897 thousand lower year on year. At 37.8 percent, the capital intensity ratio fell slightly compared to December 31, 2023 due to the significant increase in the balance sheet total, as described below. Property, plant and equipment and intangible assets showed only a slight year-on-year change overall.

Significant changes arose on the assets side in shares in companies accounted for using the equity method. These decreased in the reporting year by EUR 63,025 thousand to EUR 145,256 thousand. This was attributable in particular to the fact that BLG LOGISTICS received a dividend of EUR 137,196 thousand from EUROGATE GmbH & Co. KGaA, KG in the reporting year (previous year: EUR 39,728 thousand), which significantly exceeded the earnings of EUR 61,190 thousand measured in the reporting year using the equity method. By contrast, current financial receivables rose substantially (EUR +100,872 thousand) and include the amount of the allocated dividend.

Another significant change on the assets side occurred in cash and cash equivalents, which reported an increase of EUR 95,028 thousand as of the reporting date compared to the previous year, resulting in a significantly positive impact on lower net debt.

Primarily due to the positive Group earnings (combined net profit for the Group of EUR 85,816 thousand), equity as of December 31, 2024 increased by EUR 70,980 thousand. The equity ratio increased accordingly from 21.7 percent in the previous year to 25.3 percent in the reporting year.

Another significant change on the liabilities side occurred within otherfinancial liabilities. Non-current financial liabilities for employee benefits rose by EUR 12,818 thousand compared with the previous year while liabilities for necessary personnel structure measures were up EUR 7,584 thousand. The increases are due to liabilities arising from restructuring measures (severance payments, social plans, etc.).

A detailed breakdown of the fair values of financial assets and liabilities and disclosures on hedging instruments can be found in note 32 of the notes to the combined financial statements.

Financial position

Based on assumed earnings before taxes of EUR 91,791 thousand in 2024, cash flows of EUR 169,001 thousand were generated from operating activities (previous year: EUR 87,884 thousand). The free cash flow of EUR 191,024 thousand was in clearly positive territory and EUR 90,053 thousand above the previous year’s figure of EUR 100,971 thousand.

In particular, the significant increase in earnings in the AUTOMOBILE Division had a positive effect on cash inflows from operating activities. The change in trade payables as of the reporting date also substantially improved cash flows from operating activities.

Cash flow from investing activities also improved in the reporting year. The slightly lower payments for investments totaling EUR 38,921 thousand are compared significantly higher payments from dividends received in the amount of EUR 38,743 thousand in the previous year. The positive effect is reinforced by increased payments from the repayment of lease receivables (EUR 28,898 thousand). More information can be found in the detailed statement of cash flows in the combined financial statements. Further disclosures on the statement of cash flows can also be found in note 37 of the notes to the combined financial statements.

Cash flow from financing activities was also negative in the financial year, as the debt owed to credit institutions was further reduced.

In contrast, there were, among other things, higher payments to company owners (increase of EUR 8,230 thousand).

In total, cash funds improved significantly in the financial year by EUR 101,475 thousand to EUR 134,418 thousand.

Investments are financed by operating cash flows, non-current debt (loans) and through leases.

As of the reporting date, credit facilities to the value of EUR 76.5 million had been agreed but not utilized. Under existing factoring contracts, a volume of EUR 21.4 million was unutilized as of December 31, 2024.

Financial debt fell slightly by EUR 26,242 thousand compared to the previous year. The reduction in non-current loans of EUR -14,274 thousand compared with the previous year and the reduction in other non-current financial liabilities of EUR 28,094 thousand, in particular, had a positive effect.

The significant decline in net debt was also influenced by the increase in current financial receivables. Here, finance receivables from shareholder accounts at companies accounted for using the equity method fell significantly by EUR 94,929 thousand year on year, while non-current lease receivables fell by EUR 23,344 thousand.