Annual Report 2020/2021
ENGL_01_U1-U4_GB2021_v01.qxp 01.09.21 13:46 Seite 1 2020/2021 ANNUAL REPORT y 2020 – June 2021 sia Dortmund Jul © BORUSSIA DORTMUND 2021 Annual Report Borus
ENGL_01_U1-U4_GB2021_v01.qxp 01.09.21 13:46 Seite 2 OVERVIEW OF FINANCIAL PERFORMANCE INDICATORS Borussia Dortmund KGaA (HGB) EUR '000 2020/2021 2019/2020 Sales 323,497 442,126 Operating result (EBITDA) 33,557 54,264 Result from operating activities (EBIT) -76,580 -51,283 Net loss for the year -76,479 -49,662 Cash flows from operating activities 40,769 111,654 Free cash flow -50,452 -48,718 Borussia Dortmund Group (IFRS) EUR '000 2020/2021 2019/2020 Revenue 334,171 370,196 Consolidated total operating proceeds 358,577 486,884 Operating result (EBITDA) 38,950 62,992 Result from operating activities (EBIT) -72,093 -43,138 Net profit/net loss for the year -72,810 -43,953 Cash flows from operating activities 15,947 -362 Free cash flow -46,075 -51,131
ENGL_03_05_Inhalt_GB2021_v01.qxp 01.09.21 15:08 Seite 3
BORUSSIA DORTMUND 2 OVERVIEW OF FINANCIAL PERFORMANCE INDICATORS 6 INTRODUCTORY REMARKS 8 REPORT OF THE SUPERVISORY BOARD 14 EXECUTIVE BODIES AND CORPORATE STRUCTURE 16 THE SHARES 16 SHARE PRICE PERFORMANCE 20 SHARE CAPITAL AND SHAREHOLDER STRUCTURE SHAREHOLDINGS BY MEMBERS OF GOVERNING BODIES INVESTOR RELATIONS 22 CORPORATE GOVERNANCE REPORTING 32 MANAGEMENT REPORT 34 BUSINESS TREND LOOKING BACK ON FINANCIAL YEAR 2020/2021 35 PERFORMANCE INDICATORS 37 DEVELOPMENT OF THE MARKET AND COMPETITIVE ENVIRONMENT 41 GENERAL INFORMATION ABOUT THE COMPANY GROUP STRUCTURE AND BUSINESS OPERATIONS 42 ORGANISATION OF MANAGEMENT AND CONTROL 45 INTERNAL MANAGEMENT AND CONTROL SYSTEM 46 CORPORATE STRATEGY 50 POSITION OF THE COMPANY DEVELOPMENT OF PERFORMANCE INDICATORS 54 RESULTS OF OPERATIONS 55 SALES TREND 58 DEVELOPMENT OF SIGNIFICANT OPERATING EXPENSES 60 ANALYSIS OF CAPITAL STRUCTURE DEVELOPMENT AND PERFORMANCE OF THE BUSINESS 62 ANALYSIS OF CAPITAL EXPENDITURE 63 ANALYSIS OF LIQUIDITY NET ASSETS 64 OVERALL ASSESSMENT OF FINANCIAL POSITION AND PERFORMANCE AND BUSINESS DEVELOPMENT 64 REMUNERATION REPORT 65 THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM AS IT RELATES TO THE ACCOUNTING PROCESS 66 OPPORTUNITY AND RISK REPORT RISK MANAGEMENT 76 OPPORTUNITIES 77 OVERALL ASSESSMENT OF THE RISKS AND OPPORTUNITIES 78 REPORT ON EXPECTED DEVELOPMENTS EXPECTED DEVELOPMENT OF THE COMPANY EXPECTED GENERAL ECONOMIC ENVIRONMENT 81 EXPECTED RESULTS OF OPERATIONS 82 EXPECTED DIVIDEND EXPECTED FINANCIAL POSITION 83 OVERALL ASSESSMENT OF EXPECTED PERFORMANCE 83 OTHER DISCLOSURES 85 DISCLAIMER 86 ANNUAL FINANCIAL STATEMENTS 88 BALANCE SHEET 90 INCOME STATEMENT 91 NOTES GENERAL DISCLOSURES TO THE ANNUAL FINANCIAL STATEMENTS ACCOUNTING POLICIES 93 NOTES TO THE BALANCE SHEET 94 FIXED ASSETS 100 NOTES TO THE INCOME STATEMENT 104 OTHER DISCLOSURES 109 INDEPENDENT AUDITOR’S REPORT 4
CONTENT 118 GROUP MANAGEMENT REPORT 120 BUSINESS TREND LOOKING BACK ON FINANCIAL YEAR 2020/2021 121 PERFORMANCE INDICATORS 123 DEVELOPMENT OF THE MARKET AND COMPETITIVE ENVIRONMENT 127 GENERAL INFORMATION ABOUT THE COMPANY GROUP STRUCTURE AND BUSINESS OPERATIONS 128 ORGANISATION OF MANAGEMENT AND CONTROL 131 INTERNAL MANAGEMENT AND CONTROL SYSTEM 132 CORPORATE STRATEGY 134 DIVIDEND POLICY 135 SEPARATE NON-FINANCIAL GROUP REPORT 136 POSITION OF THE COMPANY DEVELOPMENT OF PERFORMANCE INDICATORS 140 RESULTS OF OPERATIONS 141 REVENUE TREND 146 DEVELOPMENT OF SIGNIFICANT OPERATING EXPENSES 148 ANALYSIS OF CAPITAL STRUCTURE DEVELOPMENT AND PERFORMANCE OF THE BUSINESS 150 ANALYSIS OF CAPITAL EXPENDITURE 151 ANALYSIS OF LIQUIDITY NET ASSETS OVERALL ASSESSMENT OF FINANCIAL POSITION AND PERFORMANCE AND BUSINESS DEVELOPMENT 152 REMUNERATION REPORT 153 THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM AS IT RELATES TO THE ACCOUNTING PROCESS 154 OPPORTUNITY AND RISK REPORT RISK MANAGEMENT 164 OPPORTUNITIES 165 OVERALL ASSESSMENT OF THE RISKS AND OPPORTUNITIES 166 REPORT ON EXPECTED DEVELOPMENTS EXPECTED DEVELOPMENT OF THE COMPANY EXPECTED GENERAL ECONOMIC ENVIRONMENT 169 EXPECTED RESULTS OF OPERATIONS 170 EXPECTED DIVIDENDS EXPECTED FINANCIAL POSITION 171 OVERALL ASSESSMENT OF EXPECTED PERFORMANCE 171 OTHER DISCLOSURES 173 DISCLAIMER 174 CONSOLIDATED FINANCIAL STATEMENTS 176 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 177 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 178 CONSOLIDATED STATEMENT OF CASH FLOWS 179 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 180 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS BASIC PRINCIPLES 197 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 207 NOTES TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 212 OTHER DISCLOSURES 225 INDEPENDENT AUDITOR’S REPORT 234 FINANCIAL CALENDAR / PUBLICATION DETAILS 5
BORUSSIA DORTMUND Hans-Joachim Watzke Thomas Treß Carsten Cramer Managing Director (Chairman) Managing Director Managing Director 6
INTRODUCTORY REMARKS Dear Shareholders, The pandemic continues to pervade all aspects of situation was impressive. Separated as we often our daily lives, and it is also taking its toll on are by remote working, we have nevertheless all professional football. The past financial year was closed ranks to overcome the crisis. marked by empty terraces and an eerie silence. It was not just Borussia Dortmund's earnings that Even though COVID-19 continues to dominate suffered – a net loss was bad enough –, there was the world around us, we are very confident that also a palpable yearning for emotion, passion real progress will soon be made in getting things and togetherness. back to normal. The key remains to vaccinate people against this virus, and we are convinced Our players thrive on the passion of their that a high vaccination rate will pave the way supporters like no other, and it is precisely these back to normal life. By setting up the vaccination exceptional circumstances that make us so proud centre at our stadium, we are gladly doing what of them. We had to find other ways to make up for we can to ensure hassle-free access to vaccines. the unique atmosphere at SIGNAL IDUNA PARK For that reason, I would like to close with this that has lifted us to many a victory. With that in message: Get yourselves vaccinated – every mind we are pleased to have once more qualified full vaccination is a step towards overcoming for the UEFA Champions League and delighted to this pandemic. have won the DFB Cup in such convincing fashion. We look forward to enjoying football in its purest I would also like to thank the team behind the form again as soon as we can – full of emotion, team. The way we came together to deal with this full of real love and together in the stadium! Hans-Joachim Watzke Thomas Treß Carsten Cramer Managing Director (Chairman) Managing Director Managing Director
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund REPORT OF THE SUPERVISORY BOARD Due to the pandemic, Borussia Dortmund GmbH & conclusion under such difficult conditions. We are also Co. KGaA once again looks back on a difficult and thrilled that Borussia Dortmund's second team was challenging 2020/2021 financial year. promoted to the third division in the 2020/2021 season, meaning that the club will now have two men's Borussia Dortmund's financial performance this teams playing professional football in Germany in the 2020/2021 financial year has been severely impacted 2021/2022 season. by the COVID-19 pandemic and the restrictions on public life imposed in its wake. The original The economic impact of the COVID-19 pandemic this assumptions – such as at least a partial return to fan past financial year was considerable. In the attendance at the stadium during matches – have 2020/2021 financial year (1 July 2020 to 30 June failed to materialise, particularly as the result of the 2021), Borussia Dortmund generated revenue of third lockdown. Borussia Dortmund has nevertheless EUR334.2 million (previous year: EUR 370.2 million). managed to limit somewhat the negative impact on Consolidated total operating proceeds (revenue plus earnings thanks in particular to its success in the gross transfer proceeds generated) amounted to UEFA Champions League and the DFB Cup. EUR358.6 million (previous year: EUR 486.9 million). In the financial year ended, the consolidated net loss Given the circumstances, Borussia Dortmund amounted to EUR 72.8 million (previous year: loss of ultimately played a successful season. The team EUR 44.0 million). Consolidated earnings before taxes achieved one of the season's key objectives by once (EBT) amounted to EUR -73.2 million (previous year: again directly qualifying for the group stage of the EUR -46.6 million); consolidated earnings before 2021/2022 UEFA Champions League, even though this interest, taxes, depreciation and amortisation was taxing and challenging for everyone involved, with (EBITDA) amounted to EUR 39.0 million (previous year: most of the matches over the 34 match days played EUR 63.0 million). In the separate financial statements to empty stands due to the special match operations of Borussia Dortmund GmbH & Co. KGaA prepared in imposed in the wake of the pandemic. When the accordance with the German Commercial Code (HGB), sporting objectives looked to be in jeopardy in the first the Company reported a net loss for the year of half of the season, the club decided to replace head EUR76.5 million. In light of this earnings situation, it coach Lucien Favre with Edin Terzic. After gradually is not possible to propose a dividend distribution to finding their rhythm, the team and Edin Terzic's the 2021 Annual General Meeting. coaching staff rediscovered success and rewarded themselves and the entire Borussia Dortmund fan The management and entire staff of Borussia base by winning the DFB Cup. On the heels of an Dortmund have demonstrated that they are up to the unprecedented comeback, the team climbed back to task of managing the effects of the COVID-19 third place in the Bundesliga, thereby directly pandemic even when faced with difficult challenges. qualifying for the group stage of the UEFA Champions Therefore, we owe them all a debt of gratitude. League. The team put on a respectable performance Furthermore, the players, the sporting director and in the 2020/2021 UEFA Champions League, reaching his team, the coaching staff, the managing directors the quarter-finals and thus finishing in the top eight and members of the Supervisory Board also helped in Europe. An extraordinary debt of gratitude is owed to ease the situation by agreeing to forego a portion to the sporting director, his team and the coaches for of their salaries. having brought the 2020/2021 season to a satisfactory Anlage 1.4 / 8 41009653-1376911 8
REPORT OF THE SUPERVISORY BOARD The Supervisory Board unequivocally supports the constituting meeting on 19 November 2020 management's decision, taken in close consultation following the 2020 Annual General Meeting. Due with all of Borussia Dortmund's governing bodies, to the COVID-19 pandemic, of these in total five to reject the plans to create a "Super League" and meetings, two were "virtual" meetings (video and instead, as resolved by the European Club conference calls), one was a "hybrid" meeting (i.e., Association (ECA), to implement the planned some participants attended in person while others reform of the UEFA Champions League beginning participated via video/conference calls) and two in the 2024/2025 season. Borussia Dortmund meetings were purely in-person meetings (due to shared exactly the same stance as all German the virtual Annual General Meeting). Attendance clubs in the ECA, and an overwhelming majority of at the meetings was as follows in the reporting the club's fans, members and shareholders period: supported the decision. - Ms Silke Seidel, Mr Bernd Geske, Mr Ulrich Leitermann, Mr Bodo Löttgen, Dr Reinhold There is no denying the fact that match operations Lunow and Mr Bjørn Gulden attended all five must return to normal and spectators must be meetings (100% attendance rate in each case). allowed back into stadiums in the medium term if - Before stepping down from the Supervisory the Company is to fully return to its business Board on 19 November 2020, Mr Peer model. The pandemic will continue to affect the Steinbrück attended both of the meetings that 2021/2022 season as well. The more spectators had been held prior to that date (100% we can safely welcome back to SIGNAL IDUNA attendance rate). PARK, and the faster we can do so, the sooner we - Mr Christian Kullmann attended four meetings can shed the shackles of the pandemic. This will and sent his apologies for one (80% attendance no doubt require great effort. However, due to the rate). sufficient level of consolidated equity available and - Following her election to the Supervisory Board the Company's long-term focus, Borussia on 19 November 2020, Ms Judith Dommermuth Dortmund is able to shoulder the losses sustained attended two of the meetings following the in financial year 2020/2021. constituting meeting (66.6% attendance rate). - Mr Gerd Pieper attended three meetings and Supervisory Board activity, meetings sent his apologies for two (60% attendance rate). In the 2020/2021 financial year, the Supervisory Board closely monitored the status and Furthermore, two resolutions were also circulated development of the Company and the Group, in and adopted in writing. The resolution on 6 July 2020 particular also in light of the COVID-19 pandemic. concerned the increase in the Company's overdraft It exercised all of the rights and duties incumbent facility, while the resolution on 13 November 2020 upon it by virtue of the law and the Articles of related to the appointment of Deputy Chairman Association. MrChristian Kullmann to chair the Annual General Meeting in accordance with Article 15 (1) of the The Supervisory Board convened four ordinary Articles of Association. meetings during the 2020/2021 financial year (on 7 September 2020, 19 November 2020, 22 All resolutions were adopted in accordance with the February 2021 and 25 May 2021) and one provisions of the Articles of Association and the 41009653-1376911 Anlage 1.4 / 9 9
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund relevant law. All issues are deliberated and all and deliberations formed a basis for this function. resolutions are passed by the full Supervisory Board; The Supervisory Board considers the management the Supervisory Board did not form any committees of the Company to be in compliance with the law and in the reporting year. in proper order, it deems the internal control system, risk management system and internal audit system During the reporting period, the Supervisory Board to be effective, and attests to the Company's received regular, timely and comprehensive oral corporate organisation and economic viability. and written reports from the management within Reports and consultations concerned in particular the meaning of § 90 of the German Stock athletic performance in the 2020/2021 season, the Corporation Act (Aktiengesetz, "AktG"). These reports expected reforms in connection with the German Act focused on the development of the business, the to Strengthen Financial Market Integrity Company's and the Group's liquidity, earnings and (Finanzmarktintegritätsstärkungsgesetz, "FISG") and financial position, corporate planning (specifically, the management's intended stipulations regarding financial, investment and personnel planning), the the proportion of women at the two management risk position and risk management within the levels below the general partner. Company and the Group as well as strategic issues, with the impact of the COVID-19 pandemic In the reporting period, the Supervisory Board also addressed as a specific focus in each case. adopted resolutions on commissioning an external Moreover, the Supervisory Board received written assurance engagement on the Company's separate reports in the intervals between its meetings. non-financial Group report for financial year These reports and the subsequent discussion and 2020/2021 (§ 111 (2) sentence 4 in conjunction with verification thereof also dealt with the interim § 278 (3) AktG). financial reports (i.e., the half-yearly financial report and quarterly financial reports). Moreover, In addition, during the reporting year, the the Chairman of the Supervisory Board was in Supervisory Board reviewed the accounting and regular contact with the management outside of financial reporting, stipulation of the target meetings; he was kept regularly apprised of proportion of women on the Supervisory Board and current developments in the business and major preparations for the Annual General Meeting in the business transactions and advised on strategic and previous year, specifically its proposals for budgetary issues as well as the Company's resolutions and nominations for election for this business development, risk position, risk Annual General Meeting and its approval of the management (including with respect to the general partner's decision to hold the 2020 Annual COVID-19 pandemic) and compliance issues. The General Meeting in virtual form. Part of this review management fulfilled its duty to keep the involved ascertaining the independence of the Supervisory Board informed in a complete, auditor, taking into consideration the additional continuous and timely manner. services rendered by it, prior to resolving to propose it for election. The Supervisory Board's activities The Supervisory Board advised and monitored the also covered the terms of engagement and the fee general partner and its managing directors on the agreement, the audit focal points and engaging the management of the Company. The reports of the auditor elected by the previous year's Annual management and the Supervisory Board's enquiries General Meeting. Anlage 1.4 / 10 41009653-1376911 10
REPORT OF THE SUPERVISORY BOARD 2020/2021 Annual and Consolidated The Supervisory Board concurred with the auditors' Financial Statements findings and, subsequent to its own review work, did The annual financial statements for Borussia not raise any objections. At its meeting on 20 Dortmund GmbH & Co. KGaA and the consolidated September 2021, the Supervisory Board approved financial statements as at 30 June 2021 and the the annual financial statements of Borussia management report for the Company and the Group Dortmund GmbH & Co. KGaA as at 30 June 2021 as management report (each of which comprising the well as the consolidated financial statements as at explanatory report on disclosures made pursuant to 30 June 2021. § 289a (1) and § 315a (1) of the German Commercial Code (Handelsgesetzbuch, "HGB") in the version Moreover, the Supervisory Board performed its own pursuant to Article 83 (1) sentence 2 of the review of the report on relationships with affiliated Introductory Act to the German Commercial Code companies (dependent company report) for the (Einführungsgesetz zum Handelsgesetzbuch, "EGHGB")) 2020/2021 financial year prepared by the general were prepared and submitted in due time by the partner pursuant to § 312 AktG. The dependent management and were audited, along with the company report was also audited by the auditor, who bookkeeping system by the auditor, KPMG AG issued the following opinion: Wirtschaftsprüfungsgesellschaft, Dortmund ("KPMG"), in accordance with the statutory provisions, and were "Having conducted a proper audit and assessment, each issued an unqualified audit opinion. With respect we hereby confirm that to the risk early warning system, the auditor found 1. the factual information in the report is correct that the management had taken the appropriate 2. the consideration paid by or to the Company in measures as required under § 91 (2) AktG, particularly connection with the legal transactions listed in with respect to establishing a monitoring system the report was not inappropriately high." suited towards identifying risks early on which may jeopardise the Company as a going concern. The auditor's report on the audit of the dependent company report had also been submitted to the The annual and consolidated financial statements, Supervisory Board. These documents were the management report for the Company and the discussed and reviewed by the Supervisory Board Group management report containing the risk report at the aforementioned meeting, with the auditor and and the corresponding audit reports were submitted the management in attendance. Upon concluding to all members of the Supervisory Board in due time. its review, the Supervisory Board did not raise any These documents were discussed in detail, explained objections to the declaration by the general partner and reviewed by the Supervisory Board at a meeting at the conclusion of the dependent company report. on 20 September 2021, with the management and The Supervisory Board noted with approval the the auditors and representatives attending. At that findings of the audit of the dependent company meeting, the auditors reported on and discussed the report by the auditor. key findings of their audit, including those relating to the accounting-related internal control and risk The Borussia Dortmund Group is also required to management system. The auditor and the prepare a separate report on the non-financial management responded to questions raised by the aspects of its activities for the 2020/2021 financial Supervisory Board. year. In line with the statutory options and as in the 41009653-1376911 Anlage 1.4 / 11 11
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund three preceding financial years, the general partner Moreover, the Supervisory Board proposes ratifying has chosen to prepare a separate non-financial the actions of the general partner, Borussia Group report pursuant to § 315b (3) HGB that is not Dortmund Geschäftsführungs-GmbH, for the part of the Group management report, and to make 2020/2021 financial year. this permanently available on the Company's website. The Supervisory board engaged KPMG to Corporate governance provide limited assurance over the separate Group The Supervisory Board and the management of the non-financial statement. KPMG issued a limited general partner also dealt with issues of corporate assurance report based on this engagement. This governance during the reporting period. means that, based on the work it performed and the evidence it obtained, nothing had come to The members of the Supervisory Board were and KPMG's attention that caused it to believe that the are provided with appropriate assistance upon separate non-financial Group report for the period taking up their positions and when participating from 1 July 2020 to 30 June 2021 had not been in further or continuing education. For instance, prepared, in all material respects, in accordance the Company organised a continuing education with § 315b and § 315c, in conjunction with § 289c course for the Supervisory Board during the to §289e HGB. The separate non-financial Group reporting period on the accounting particularities report and the review report prepared by KPMG of publicly traded football companies. All members were presented to the Supervisory Board. After of the Supervisory Board were also given access discussing the topic at its meeting convened to to inspect the Company's athletic, training and approve the financial statements on 20 September other facilities and match operations in line with 2021, the Supervisory Board concurred with the pandemic-related rules and regulations. Since findings of KPMG's limited assurance engagement September 2020, all members of the Supervisory and raised no objections to the separate Board have been provided with a trade journal non-financial Group report based on the findings (including online content) for educational of its own review. purposes. The Supervisory Board proposes to the Annual The current Declaration of Conformity was adopted General Meeting that the annual financial statements at the same time as the resolution on this report and as at 30 June 2021 be adopted. In the annual financial relates to the German Corporate Governance Code in statements (separate financial statements) prepared the version dated 16 December 2019, which was in accordance with German commercial law (HGB) published in the Federal Gazette (Bundesanzeiger) on as at 30 June 2021, the Company reported a net loss 20 March 2020. The full declaration is permanently for the year of EUR 76,478,856.69 and net available online at http://aktie.bvb.de/eng, under accumulated losses of EUR 126,141,140.59. This "Corporate Governance". Additional disclosures and earnings situation means that the general partner explanations in this regard are made in the corporate and the Supervisory Board are not able to make a governance declaration, including on the Supervisory proposal to the Annual General Meeting on the Board's self-assessment of its tasks and work that it appropriation of net profit, or to recommend that it conducted in the reporting year. resolve to distribute a dividend. Anlage 1.4 / 12 41009653-1376911 12
REPORT OF THE SUPERVISORY BOARD Personnel matters Consequently, at its meeting on 20 September 2021, Mr Peer Steinbrück left the Supervisory Board at the the Supervisory appointed Mr Christian Kullmann, close of the Annual General Meeting on 19 November who had been the Deputy Chairman since the end of 2020. The Supervisory Board would like to take this August 2019, as Chairman of the Supervisory Board opportunity to sincerely thank him for his nearly ten and Mr Ulrich Leitermann as Deputy Chairman of the years of service on the Board. The Supervisory Board Supervisory Board, in each case with effect from 25 thoroughly enjoyed working with Mr Steinbrück. His September 2021. acumen and advice was universally appreciated. The Supervisory Board would like to express its The Annual General Meeting on 19 November 2020 gratitude to the management, the Works Council and elected Ms Judith Dommermuth as a new member all employees for their enduring commitment and to the Supervisory Board and re-elected all other hard work, particularly when faced with the massive members of the Supervisory Board in office during challenges posed by the COVID-19 pandemic. the reporting year. The Supervisory Board also wishes to thank Borussia In March 2021, the Executive Committee of Dortmund's business partners, shareholders and the Advisory Board of Borussia Dortmund fans for their trust. Geschäftsführungs-GmbH and Chairman of the management, Hans-Joachim Watzke, agreed to extend his existing service agreement (originally set Dortmund, 20 September 2021 to expire on 31 December 2022) until 31 December 2025. Agreement was likewise reached with The Supervisory Board Managing Directors Thomas Treß and Carsten Cramer to extend their service agreements (originally Christian Kullmann set to expire on 30 June 2022 in each case) until 30 Deputy Chairman June 2025 in each case. The Supervisory Board welcomes this continuity in the management team in these particularly challenging times during the pandemic and looks forward to continuing its working relationship with the management team. On 26 August 2021, Mr Gerd Pieper, who joined the Supervisory Board on 25 November 2003 and became its chairman on 2 November 2004, resigned from the Supervisory Board for health reasons, effective as at the end of 24 September 2021. 41009653-1376911 Anlage 1.4 / 13 13
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund EXECUTIVE BODIES BV. BORUSSIA 09 e.V. DORTMUND Chairman Dr. Reinhard Rauball President Gerd Pieper Vice President Dr. Reinhold Lunow Treasurer BORUSSIA DORTMUND GmbH & Co. KGaA Supervisory Board Gerd Pieper Chairman Retired; former Managing Director of Stadt-Parfümerie Pieper GmbH, Herne Peer Steinbrück (until 19 November 2020) Senior Advisor to the Management Board of ING-DiBa AG, Frankfurt am Main Bernd Geske Managing partner of Bernd Geske Lean Communication, Meerbusch Christian Kullmann Deputy Chairman Chairman of the Executive Board of Evonik Industries AG, Essen Ulrich Leitermann Chairman of the Managing Boards of group parent companies of the SIGNAL IDUNA Group, Dortmund Bjørn Gulden Chief Executive Officer of PUMA SE, Herzogenaurach Dr. Reinhold Lunow Medical Director of Praxisklinik Bornheim, Bornheim Silke Seidel Senior Executive at Dortmunder Stadtwerke Aktiengesellschaft and Managing Director of Hohenbuschei Beteiligungsgesellschaft mbH, Westfalentor 1 GmbH and Dortmund Logistik GmbH, all in Dortmund Bodo Löttgen Chair of the CDU parliamentary group in the state parliament of North Rhine-Westphalia, detective chief inspector (Kriminalhauptkommissar) (ret.), public administration graduate Judith Dommermuth (since 19 November 2020) Managing partner of JUVIA Verwaltungs GmbH, Cologne BORUSSIA DORTMUND GESCHÄFTSFÜHRUNGS-GmbH Management Hans-Joachim Watzke Managing Director (Chairman) Thomas Treß Managing Director Carsten Cramer Managing Director Anlage 1.4 / 14 41009653-1376911 14
EXECUTIVE BODIES/CORPORATE STRUCTURE CORPORATE STRUCTURE BORUSSIA DORTMUND GmbH & Co. KGaA 100.00% BVB Stadionmanagement GmbH 100.00% BVB Merchandising GmbH 100.00% BVB Event & Catering GmbH 100.00% besttravel dortmund GmbH 100.00% BVB Asia Pacific Pte. Ltd. 100.00% BVB Fußballakademie GmbH 33.33% Orthomed Medizinisches Leistungs-und Rehabilitationszentrum GmbH 41009653-1376911 Anlage 1.4 / 15 15
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund THE SHARES of Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund SHARE PRICE PERFORMANCE During the reporting period for the 2020/2021 from the same date) and as such the news did not financial year (1 July 2020 to 30 June 2021), the adversely affect the share price, which closed at performance of BVB shares was adversely EUR 5.70 on 17 August 2020. It lost ground slightly influenced primarily by the ongoing effects of the thereafter. The shares traded at EUR 5.61 on 31 SARS-CoV-2 (COVID-19) pandemic, which could August 2020. The share price recovered in the first not be adequately offset by the Company's positive half of September. BVB shares traded at EUR 5.72 sport-related and business announcements on 1 September 2020, EUR 5.84 on 7 September (unless indicated otherwise, the following data is 2020, EUR 5.85 on 15 September 2020 and EUR based on the closing price of shares in XETRA 6.28 on 16 September 2020. This was mainly due trading in shares of Borussia Dortmund; where to the opening win in the DFB Cup and the prospect necessary, figures have been rounded up to the of some fans returning to matches (see corporate nearest hundredth). news dated 15 September 2020). However, initial reports that the pandemic was worsening then led The shares in Borussia Dortmund GmbH & Co. to adverse market developments in general and a KGaA kicked off the new 2020/2021 financial year slide in Borussia Dortmund's share price in at EUR 5.97 on 1 July 2020 (previous year: EUR particular. BVB shares traded at EUR 5.70 on 21 8.61) and fluctuated between EUR 5,55 and September 2020, EUR 5.55 on 24 September 2020, EUR6.07 throughout the month of July 2020. On 4 EUR 5.42 on 28 September 2020 and EUR 5.13 on August 2020, the Company announced that the 30 September 2020. Bundesliga had adopted an initial uniform set of guidelines to allow a limited number of fans back This pandemic-induced trend then continued. BVB into stadiums in the 2020/2021 season. On that shares traded at EUR 5.03 on 1 October 2020, EUR day, the shares were trading at EUR 5.70. On 17 4.76 on 14 October 2020, EUR 4.42 on 16 October August 2020, the Company announced the 2020 and EUR 4.39 on 20 October 2020. Four preliminary figures for the 2019/2020 financial Bundesliga wins and two wins (as well as a loss) year (see ad hoc disclosure from the same date) in the UEFA Champions League did little to reverse and consolidated total operating proceeds this trend. On 30 October 2020, BVB shares were (revenue plus gross transfer proceeds generated) listed at EUR 4.21 and on 2 November 2020 at of EUR 486.9 million (previous year: EUR 489.5 EUR4.33. The share price then began to recover million). In the financial year ended, the slightly. On 6 November 2020, Borussia Dortmund consolidated net loss amounted to EUR 44.0 GmbH & Co. KGaA released the preliminary first million (previous year: profit of EUR 17.4 million). quarter figures for financial year 2020/2021 (see The Company had already issued an earnings ad hoc disclosure from the same date). Shares outlook on 29 June 2020 (see ad hoc disclosure in BVB traded at EUR 4.66 on the same date, 16
THE SHARES EUR 5.17 on 9 November 2020, EUR 5.31 on 16 winning streak and the positive figures for the first November 2020, EUR 5.38 on 19 November 2020, half of the year. The BVB shares traded at EUR 5.18 the day of the virtual 2020 Annual General Meeting, on 1 February 2021. On 8 February 2021, the EUR 5.68 on 23 November 2020 and EUR 5.95 on Company published the preliminary semi-annual 27 November 2020. The team then produced figures (see ad hoc disclosure from the same date), inconsistent performances on the pitch in the announcing that it had generated positive earnings month of December 2020. While in the end the in the second quarter of the financial year despite team remained in the running across all the ongoing COVID-19 pandemic and the related competitions going into the winter break, lockdown measures. Consolidated total operating unsatisfactory results in the Bundesliga, including proceeds amounted to EUR 190.3 million in the the unexpected and resounding 1:5 defeat to VfB first half of the financial year (previous year: EUR Stuttgart, unfortunately led to head coach Lucien 297.4 million). In the first half of the financial year, Favre being released on 13 December 2020 and the consolidated net loss amounted to EUR 26.3 replaced by his assistant coach Edin Terzic. Shares million (previous year: profit of EUR 3.0 million). traded at EUR 5.71 on 1 December 2020, EUR 5.88 On this and the following trading day, BVB's shares on 9 December 2020 after the team advanced to closed at EUR 5.14. On 15 February 2021, Borussia the round of 16 of the UEFA Champions League, Dortmund announced that Marco Rose would be EUR 5.62 on 11 December 2020, EUR 5.47 on 14 the new head coach beginning in the 2021/2022 December 2020, the day after head coach Lucien season (see corporate news from the same date). Favre was released, EUR 5.36 on 21 December The share price jumped on the heels of this news 2020 and EUR 5.46 on 23 December 2020 after the and continued to increase. BVB shares traded at team advanced to the round of 16 of the DFB Cup. EUR 5.23 on 12 February 2021, EUR 5.33 on 15 The BVB shares ultimately closed out the 2020 February 2021, EUR 5.38 on 22 February 2021 and calendar year at EUR 5.44 on 30 December 2020. EUR 5.52 on 26 February 2021. The share price initially rose significantly as the team advanced to The shares of Borussia Dortmund kicked off the the quarter-finals of the UEFA Champions League new 2021 calendar year at EUR 5.39 on 4 January and the Company published positive business 2021 after the team won its first match in the announcements at the end of the reporting period, second half of the Bundesliga season on 3 January before declining again in March 2021. BVB shares 2021. Following another win, the share price traded at EUR 5.64 on 1 March 2021, EUR 5.75 on climbed to EUR 5.80 on 12 January 2021. However, 4 March 2021, EUR 6.00 on 9 March 2021, EUR 5.91 the shares traded at EUR 5.14 on 29 January 2021 on 16 March 2021, EUR 5.80 on 19 March 2021 and following a draw and two losses. The share price EUR 5.53 on 22 March 2021. On 29 March 2021, the recovered in February 2021 on the heels of a Company announced that the service agreements 17
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund that day. The BVB shares traded at EUR 5.96 on 13 of the managing directors Hans-Joachim Watzke, Thomas Treß and Carsten Cramer had in each case May 2021. After winning the DFB Cup that evening, been extended by three years (see ad hoc they then traded at EUR 6.33 the following day, 14 disclosure from the same date). The market May 2021. After the Bundesliga season was responded positively to this announcement. On the completed under the special conditions governing same day, BVB shares traded at EUR 5.46, at EUR the special match operations, the Company on 25 5.56 on the following day, and at EUR 5.43 on 31 May 2021 published an outlook of the key earnings March 2021. figures for the 2020/2021 financial year and announced, among other things, that Borussia The BVB shares listed at EUR 5.48 on 1 April 2021. Dortmund expected to report consolidated EBITDA Following defeat at the hands of a direct of approximately EUR 33.0 million and a Bundesliga rival in the battle to secure automatic consolidated net loss of approximately EUR 75 qualification for the UEFA Champions League and million for the overall 2020/2021 financial year with the team a sizeable seven points short of (see ad-hoc disclosure from the same date). On fourth place in the table, the share price dropped that day, the BVB shares traded at EUR 6.11. BVB to EUR 5.27 on 6 April 2021 and EUR 5.19 on 7 April shares traded at EUR 6.12 on 26 May 2021, EUR 2021. The share price then rebounded gradually 6.01 on 1 June 2021, EUR 6.17 on 4 June 2021 and as the club won the first of what turned out to be reached their high for the reporting period of EUR a run of victories culminating in the qualification 6.54 on 10 June 2021. The reporting period ended for the UEFA Champions League. BVB shares with BVB's shares trading at EUR 6.22 on 30 June traded at EUR 5.26 on 12 April 2021, EUR 5.42 on 2021 (previous year: EUR 5.78). 15 April 2021, EUR 5.68 on 22 April 2021 and EUR 5.83 on 30 April 2021. This positive trend then continued into May 2021. The BVB shares traded at EUR 5.73 on 7 May 2021. On 10 May 2021, the Company announced its preliminary figures for the third quarter (see ad hoc disclosure from the same date), with BVB's shares trading at EUR 5.96 18
THE SHARES Share price performance (in EUR) 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0 01/07/2020 01/08/2020 01/09/2020 01/10/2020 01/11/2020 01/12/2020 01/01/2021 01/02/202101/03/2021 01/04/2021 01/05/2021 01/06/202130/06/2021 Revenue (Shares) 2,000,000 1,750,000 1,500,000 1,250,000 1,000,000 750,000 500,000 250,000 0 01/07/2020 01/08/2020 01/09/2020 01/10/2020 01/11/2020 01/12/2020 01/01/2021 01/02/202101/03/2021 01/04/2021 01/05/2021 01/06/202130/06/2021 19
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund SHARE CAPITAL AND SHAREHOLDER STRUCTURE Borussia Dortmund GmbH & Co. KGaA's share • Evonik Industries AG: 9.83% capital amounts to EUR 92,000,000.00 divided into • Bernd Geske: 9.35% the same number of no-par value shares. Based on • Ballspielverein Borussia 09 e.V. Dortmund: 5.53% the voting rights notifications we have received, the • SIGNAL IDUNA: 5.43% shareholder structure of Borussia Dortmund GmbH • Ralph Dommermuth Beteiligungen GmbH: 4.99%* & Co. KGaA was as follows as at 30 June 2021: • PUMA SE: 4.99%* • Free float: 69.86% * The shareholdings of these shareholders are formally included in the free float. SHAREHOLDINGS BY MEMBERS OF GOVERNING BODIES As at 30 June 2021, one member of management Members of management and the Supervisory held 7,045 no-par value shares in the Company. As Board hold a total of 8,609,054 no-par value shares, at the same date, the members of the Supervisory which corresponds to more than 1% of the shares Board held a total of 8,602,009 no-par value shares. issued by Borussia Dortmund GmbH & Co. KGaA. INVESTOR RELATIONS The objective of our Company's Investor Relations We therefore use online communication as our main organisation is to obtain an appropriate valuation of form of communications, as this offers the best basis BVB shares on the capital market. This is achieved for providing all interested parties with equal access by pursuing ongoing and open communication with to up-to-date information. Because this information all market participants. Investor Relations forms an is highly pertinent, Borussia Dortmund maintains ideal interface between institutional investors, an investor relations webpage, "BVB Share" which financial analysts and private investors. The is available online at www.bvb.de/aktie and Company seeks to justify the confidence placed in it http://aktie.bvb.de/eng. All annual and interim by investors and the public through immediate and financial reports are available for download at this transparent communication of its financial results, site. Mandatory disclosures and announcements business transactions, strategy, and risks and under capital market law, such as ad hoc disclosures, opportunities. We are committed to communications corporate news, and manager transactions (formerly principles such as openness, continuity, equal directors' dealings) are published here in a timely treatment and credibility, which make it possible to manner. At the same time, our service provider, EQS develop a long-term rapport based on trust with Group AG (DGAP), Munich, ensures that these notices market participants and to ensure a true and fair are distributed throughout Europe. Further detailed view of the Company. information, such as investor presentations and 20
THE SHARES in-depth information on implementing the (organised via Berenberg), and on 26/27 May 2021 recommendations of the German Corporate for the virtual Roadshow Europe & UK (organised Governance Code, is provided on our website. The via Berenberg). information is available in German and, for the most part, in English as well. The Company is also pleased to be included in the research coverage of the following firms: Another objective of ours in financial year 2020/2021 was to continue to foster communication with the • Frankfurt Main Research AG, Frankfurt am Main capital markets. The Annual Press Conference on Most recent research update: 6 July 2021, the preliminary figures of the 2019/2020 financial Recommendation: "Buy" (previously: "Buy") year was held in Dortmund on 17 August 2020. The • Joh. Berenberg, Gossler & Co. KG ("Berenberg"), Company also held an analyst conference on the Hamburg same day in Frankfurt am Main. Both of these were Most recent research update: 19 May 2021, held as "hybrid" events with a limited number of Recommendation: "Buy" (previously: "Buy") attendees. The Company also held group and • Stifel Europe Bank AG, Frankfurt am Main one-on-one conference calls or online meetings (due Most recent research update: 10 May 2021, to the pandemic) with representatives of the capital Recommendation: "Hold" (previously: "Hold") market during the reporting period, for instance as • Edison Research Investment Ltd., London, UK part of the Equity Forum on 16 November 2020 in Most recent research update: 10 February 2021, Frankfurt am Main, and took part in roadshows (via Recommendation: "n/a" online meetings) in Munich on 22 September 2020 • GSC Research GmbH, Düsseldorf (organised via Berenberg), in London on 14/15 Most recent research update: 16 November October 2020 (organised via Edison), in Madrid on 2020, Recommendation: "Buy" (previously: "n/a") 12 November 2020 and in London on 30 November 2020 (in each case organised via Berenberg), in Individual studies and research updates that our Israel on 1 December 2020 (organised via Edison), Company is entitled to publish are available online in the United States on 10 December 2020 at www.bvb.de/aktie and http://aktie.bvb.de/eng (organised via Stifel), on 17 March 2021 for the under "BVB Share", sub-heading "Capital Market View". Berenberg Virtual DACH & Nordic Conference (organised via Berenberg), on 23 March 2021 for the Stifel Europe Bank AG (previously MainFirst Bank Edison Virtual Roadshow, USA (organised via AG) was our Company's designated sponsor during Edison), on 11 May 2021 for the Stifel Virtual the reporting period. Roadshow, Europe (organised via Stifel), on 18 May 2021 for the Berenberg Tarrytown Conference, USA 21
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund CORPORATE GOVERNANCE REPORTING Our Company believes it is essential for corporate preservation of shareholder interests, and open and governance to be clearly structured and effective. transparent corporate communications are vital Corporate governance embodies a responsible and aspects of sound corporate governance. This is the transparent system of checks and balances designed guiding principle for the Company's Supervisory Board to ensure a continued focus on sustainable value and for the management of Borussia Dortmund creation. Efficient cooperation between the Geschäftsführungs-GmbH in its capacity as the general management and the Supervisory Board, the partner of Borussia Dortmund GmbH & Co. KGaA. GENERAL INFORMATION ON CORPORATE GOVERNANCE AT BORUSSIA DORTMUNDGmbH & Co. KGaA German stock corporation law sets out the statutory The Code is generally reviewed once annually and framework of corporate governance. Pursuant to § amended as required. It reflects basic statutory 161 AktG, the executive board and the supervisory guidelines concerning the management and board of a listed company are required to submit supervision of listed German companies as well as each year a declaration as to whether and to what internationally and nationally recognised standards extent that company has complied (retrospective) for sound and responsible corporate governance. In or will comply (forward-looking) with the addition to formulating best practices for recommendations of the "Government Commission management, the Code is intended to ensure that of the German Corporate Governance Code" corporate governance in Germany is transparent contained in the German Corporate Governance and open to scrutiny and to promote confidence in Code as published in the official section of the the management and supervision of listed German electronic Federal Gazette. Although companies companies amongst international and national may opt to deviate from the Code, they are then investors, customers, employees and the public. obligated to disclose this on an annual basis, providing an explanation for their non-compliance A large number of the Code's recommendations ("comply or explain"). This option exists to ensure (expressed using the word "shall") are intended that companies are able to meet industry- or exclusively for German stock corporations company-specific requirements. A well-founded (Aktiengesellschaft, "AG"), meaning that they are deviation from a recommendation of the Code may either not applicable at all or must at best be applied be in the interest of sound corporate governance. mutatis mutandis to partnerships limited by shares (Kommanditgesellschaft auf Aktien, "KGaA"), i.e., our Company as well. 22 Anlage 1.4 / 22 41009653-1376911
CORPORATE GOVERNANCE REPORTING A KGaA is a hybrid corporate form combining its consent on behalf of the general partner. elements of a German stock corporation and a Rather, such rights and duties are vested in limited partnership (Kommanditgesellschaft). It is a the governing bodies of Borussia Dortmund separate legal entity whose share capital is divided Geschäftsführungs-GmbH, namely its into shares which are held by at least one Advisory Board and the Executive Committee shareholder (the general partner) that has unlimited created by the Advisory Board. liability against creditors of the Company and limited partners (Kommanditaktionäre) that are not • Additional features specific to the KGaA's personally liable for the debts of the company (§278 Annual General Meeting are set forth (1) AktG). primarily in §§ 285 and 286 (1) AktG and in the Company's Articles of Association. The key differences between a KGaA and a German stock corporation can be characterised as follows: As a consequence, a Declaration of Conformity in accordance with § 161 AktG must be submitted by • Borussia Dortmund GmbH & Co. KGaA does the management of the general partner and the not have an executive board. Instead, the Supervisory Board of Borussia Dortmund GmbH & general partner, Borussia Dortmund Co. KGaA, taking into account the specific Geschäftsführungs-GmbH, is solely responsible characteristics of the KGaA's legal form and the for its management and representation. provisions of the Articles of Association. This German limited liability company (Gesellschaft mit beschränkter Haftung, "GmbH") In our assessment, the following recommendations is in turn represented by one or more of the Code are not applicable (including mutatis managing directors; its sole shareholder is mutandis) to the specific characteristics of the KGaA Ballspielverein Borussia 09 e.V. Dortmund. legal form and the provisions of the Company's Articles of Association: • The rights and duties of the KGaA's Supervisory Board, which is appointed by the • The Code makes various recommendations Annual General Meeting, are limited. to the Supervisory Board in respect of Specifically, it has no authority to appoint and executive board remuneration, namely G.4, dismiss Managing Directors of Borussia G.8 and G.13 of the Code. The Code makes a Dortmund Geschäftsführungs-GmbH or to large number of other recommendations to stipulate the terms of their service the Supervisory Board in respect of the agreements. Nor is the Supervisory Board remuneration system for executive board authorised to adopt internal rules of members and/or the structure of their procedure or a list of transactions requiring individual remuneration. As follows from the 41009653-1376911 Anlage 1.4 / 23 23
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund justification to the Code given by the the remuneration system for executive board Government Commission, all of these members and/or executive board pay, and on recommendations are based, either in the role of the Supervisory Board, which in substance or method, on the statutory some respects are considered to be provisions for a German stock corporation over-regulation, have not been and will not be (Aktiengesellschaft) under § 87 (1) of the applied on a voluntary basis by the Executive German Stock Corporation Act (Aktiengesetz, Committee. "AktG") and/or § 87a AktG, which entered into force on 1 January 2020. These statutory • We nevertheless disclose the remuneration provisions are not applicable to our Company of the individual Managing Directors of our – either directly or mutatis mutandis – on Company's general partner, Borussia account of its legal form, which we believe Dortmund Geschäftsführungs-GmbH, on a was a conscious decision on the part of the voluntary basis in the notes to the annual and legislator. As such, recommendations G.1 to consolidated financial statements. The G.3, G.5 to G.7, G.9 to G.13, G.15 and G.16 of version of § 285 no. 9 (a) sentences 5 et seq. the Code are likewise not applicable to our HGB still applicable to annual and Company. By contrast, Article 7 of the consolidated financial statements and (group) Company's Articles of Association stipulates management reports for financial years that the general partner has a right to beginning before 1 January 2021 in reimbursement of the staff and materials accordance with Article 83 (1) sentence 2 expenses incurred by it in the course of EGHGB is only applicable to listed stock managing the Company, plus a commission corporations and the remuneration paid to amounting to 3% of the net profit for the year the members of their executive boards, generated by the Company. Otherwise, the however not the KGaA legal form. fixed and variable remuneration for the Managing Directors of Borussia Dortmund Despite the specific characteristics of our Geschäftsführungs-GmbH was and is Company's legal form, however, the following resolved by the Executive Committee formed recommendations of the Code are applied mutatis by that company, which also reviews the mutandis or in modified form, which we do not Managing Directors' employment agreements consider a deviation from the Code: for appropriateness and compliance with standard market practice when entering into • Long-term succession planning within the or extending them. For practical reasons, the meaning of recommendations B.1 and B.2, recommendations of the Code with respect to first half-sentence of the Code is the 24 Anlage 1.4 / 24 41009653-1376911
CORPORATE GOVERNANCE REPORTING responsibility of the Managing Directors of • We consider the President of the Executive the Company and – given that the Committee, Dr Reinhard Rauball, who addresses Supervisory Board has no authority to the remuneration of the Managing Directors of appoint or dismiss personnel – the Executive Borussia Dortmund Geschäftsführungs-GmbH, Committee of Borussia Dortmund to be independent within the meaning of the Geschäftsführungs-GmbH. This planning recommendation C.10 of the Code. takes place in regular dialogue between the management and the Executive Committee, • In application mutatis mutandis of the which determine profiles of skills and recommendation D.7 of the Code, a regular expertise for management personnel based time slot is reserved at Supervisory Board on the corporate strategy and internal meetings for discussions without the corporate structure and management, and Managing Directors of the general partner. monitor relevant internal and external candidates. In this respect, scouting is • Given that the Supervisory Board has no authority something we use not just to find talented to appoint and dismiss Managing Directors new footballers, but also in our human of Borussia Dortmund Geschäftsführungs- resource planning. Efforts are also ongoing GmbH or to stipulate the terms of their within the Company to nurture up-and-coming service agreements, not it but rather the management talent, for example by means of Executive Committee of Borussia Dortmund further education. The Company can also rely Geschäftsführungs-GmbH is responsible for on its network and on outside service consenting to sideline activities of the Managing providers where necessary to recruit Directors of the general partner within the externally. The Executive Committee also acts meaning of recommendation E.3 of the Code. to ensure sufficient diversity when staffing the management. The Declaration of Conformity must be made permanently available to shareholders on the • In the case of the first-time appointment of Company's website. It is published on the investor Managing Directors of Borussia Dortmund relations website, http://aktie.bvb.de/eng, under Geschäftsführungs-GmbH, the Executive "Corporate Governance". In addition, the Declaration Committee follows the recommendation B.3 of Conformity submitted in September 2021, as of the Code, whereby executive board reproduced below, is an integral part of this members at stock corporations should be corporate governance declaration. appointed for a maximum of three years. 41009653-1376911 Anlage 1.4 / 25 25
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund While the Company's corporate governance report The previous year's Annual General Meeting was presented here is published as part of the corporate convened in due and proper form and held on 19 governance declaration (on the Company's website November 2020 as a virtual Annual General Meeting http://aktie.bvb.de/eng under "Corporate Governance" without the physical presence of the limited liability / "Corporate governance declaration"), the corporate shareholders or their proxies. In compliance with governance reports for the 2017/2018 and previous the German Corporate Governance Code, the reports financial years were published in the annual reports for and documents required by law were made the respective financial years. These are available on available for inspection; these were given to the our investor relations website http://aktie.bvb.de/eng, limited liability shareholders upon request and were under "Publications". published on the Company's website together with the agenda. The resolutions on all agenda items were approved, with votes in favour ranging Transparency between 87.11% and 99.97% of the votes cast. The Company provides the limited liability shareholders, shareholders' associations, financial The next Annual General Meeting of Borussia analysts and the general public regular notifications Dortmund GmbH & Co. KGaA will take place on 2 regarding the position of the Company and on December 2021. Given the COVID-19 pandemic, this material business developments. is expected to be held as a virtual Annual General Meeting without the physical presence of the limited In particular, we publish ad hoc disclosures and liability shareholders or their proxies. corporate news on our website, as well as voting rights notifications and managers' transactions The half-yearly and other interim financial reports notifications submitted to us, information on the shall be published at the intervals recommended in shareholder structure, the current version of the the Code. The Company will provide further details Articles of Association and the financial calendar. via ad hoc announcements. The consolidated financial statements, the Group management report and the The financial calendar includes the dates for key interim financial reports are prepared in accordance Company events, and can be accessed online at with International Financial Reporting Standards http://aktie.bvb.de/eng, under "Financial Calendar". (IFRSs) as adopted by the member states of the EU. The annual financial statements and management As in previous years, the Annual Press Conference report of Borussia Dortmund GmbH & Co. KGaA were on the "preliminary" figures of the previous financial and will continue to be prepared in accordance with year will be streamed live so that the general public the provisions of the German Commercial Code may watch the conference online in real time. (Handelsgesetzbuch, "HGB") and the German Stock Corporation Act (Aktiengesetz, "AktG"). 26 Anlage 1.4 / 26 41009653-1376911
CORPORATE GOVERNANCE REPORTING Our Company stands for more than "just" football The Notes to the financial statements and the and takes its corporate social responsibility into management report contain disclosures on the account. A first, voluntary sustainability report remuneration of the general partner and the covered the 2016/2017 financial year, i.e. the period members of the Supervisory Board, and the Annual from 1 July 2016 to 30 June 2017, and was based Report contains disclosures on the ownership of on the Global Reporting Initiative (GRI) Standards Company shares by the general partner and (Core option). The sustainability reports for members of its management and by the members subsequent financial years (i.e., from the 2017/2018 of the Supervisory Board. Due to the specific financial year onwards) also contain a separate characteristics of the KGaA legal form, there is non-financial Group report in accordance with § currently no obligation to disclose the remuneration 315b (3) HGB, and many of the aspects it covers and of individual Managing Directors of the general disclosures it contains also relate to compliance and partner of the Company, Borussia Dortmund risk management. The sustainability reports are Geschäftsführungs-GmbH, as would normally be published online at https://aktie.bvb.de/eng under the case for the members of the executive boards "Corporate Governance"/"Sustainability Report". of listed German stock corporations. Nonetheless, as referred to above we have presented the Moreover, we publish analysts' recommendations and remuneration of individual Managing Directors in research studies on our website http://aktie.bvb.de/eng, the notes to the annual and consolidated financial under "BVB Share"/"Capital Market View", in order to statements on a voluntary basis. facilitate communication with market participants. Customers, fans and the public alike can also find additional information on the Company – including e.g. CVs and overviews of the key duties of Supervisory Board members as well as further information on the managing directors of the general partner – at http://aktie.bvb.de/eng. A considerable number of publications on our website have been and will continue to be made available in English. 41009653-1376911 Anlage 1.4 / 27 27
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Dortmund, 20 September 2021 On behalf of the Supervisory Board Christian Kullmann Deputy Chairman On behalf of Borussia Dortmund Geschäftsführungs-GmbH Hans-Joachim Watzke Thomas Treß Carsten Cramer Managing Director (CEO) Managing Director Managing Director 28 Anlage 1.4 / 28 41009653-1376911
CORPORATE GOVERNANCE REPORTING DECLARATION OF CONFORMITY by the management and by the Supervisory Board of Borussia Dortmund GmbH & Co. KGaA in accordance with § 161 AktG dated 20 September 2021 In accordance with § 161 of the German Stock to report violations of the law or internal Company Corporation Act (Aktiengesetz, "AktG"), the guidelines, including where necessary in management of the general partner (Borussia confidence, were considered sufficient and Dortmund Geschäftsführungs-GmbH) and the reasonable. Nevertheless, an institutionalised Supervisory Board of Borussia Dortmund GmbH & whistleblower system for Group employees and Co. KGaA declare that since the last Declaration of third parties will now be put in place during the Conformity was submitted on 7 September 2020, second half of the 2021/2022 financial year. The Borussia Dortmund GmbH & Co. KGaA complied and requisite preparations have already been made to will continue to comply with the recommendations put the system in place. of the German Corporate Governance Code (the "Code") in the version dated 16 December 2019 Re recommendation B.4: As in the past, the (published in the Federal Gazette (Bundesanzeiger) Executive Committee of Borussia Dortmund on 20 March 2020), with the exception of the Geschäftsführungs-GmbH will continue to decide following deviations (please note that numerous on the reappointment of its Managing Directors, recommendations of the Code, in particular those including, even in the absence of special pertaining to the remuneration system for executive circumstances, prior to the end of one year before board members and/or executive board pay, are not the end of the existing term of appointment. Given applicable due to the specific characteristics of our the specific features of the KGaA legal form and due Company's legal form as a partnership limited by to the desire for greater flexibility, it is not shares (Kommanditgesellschaft auf Aktien, "KGaA"); considered practicable to make any staffing the respective disclosures and explanations are decision based solely on timing and circumstances. given in the corporate governance declaration): Re recommendation B.5: As in the past, the Re recommendation A.2 sentence 2 first half- Executive Committee of Borussia Dortmund sentence: In accordance with this recommendation, Geschäftsführungs-GmbH will continue to make appropriate measures must be in place that allow decisions as to age limits for the Managing employees to report any violations of the law within Directors of the general partner for upcoming the Company, without fear of retaliation. No formal (re-)appointments of Managing Directors, without whistleblower system was put in place at our generally stipulating an age limit to that extent. It is Company to date because the other opportunities not considered practicable to set any age limits. 41009653-1376911 Anlage 1.4 / 29 29
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Re recommendations C.1 sentences 1 to 4 and C.2: consideration, it is therefore considered reasonable The Supervisory Board has not set any concrete to deviate from this recommendation. objectives regarding its composition, has not prepared a profile of skills and experience, and has Re recommendation C.13:In its election proposals not established an age limit for Supervisory Board to the Annual General Meeting, the Supervisory members. Nor are there plans to do so going forward. Board does not disclose the personal and business The Supervisory Board's continuing preference is to relationships of every candidate with the Company, decide on proposals relating to its composition on a the governing bodies of the Company and limited case-by-case basis in light of specific situations. liability shareholders with a material interest in the Consequently, no further information was or is Company (i.e., those holding more than 10% of reported on this recommendation or its compliance voting shares). Nor are there plans to do so going with it. Notwithstanding the foregoing, compliance forward. In its opinion, no secure legal practice with the requirement, issued by the legislator, that exists with respect to this recommendation. The the target proportion of women on the Supervisory legal certainty of Supervisory Board elections took Board be defined, remains mandatory (§ 278 (3) and and takes a higher priority than any effort to make § 111 (5) AktG as well as § 289f (3) and (2) no. 4 HGB). legally unnecessary disclosures in connection with nominations. Re recommendation C.5, second half-sentence: This recommendation states that members of the Re recommendations D.2, D.3 and D.5: To date, the management board of a listed company shall not Supervisory Board has not formed committees. It accept the chairmanship of a supervisory board of was the Supervisory Board's intention for all topics a non-group listed company. Supervisory Board to be discussed by the Supervisory Board as a whole. member Mr Christian Kullmann is the Chairman of This continues to apply to waiving the formation of a the Executive Board of listed company Evonik nomination committee as recommended in the Code, Industries AG in Essen and will take up the position particularly given that the Supervisory Board already of Chairman of the Supervisory Board at our comprises solely shareholder representatives – Company with effect from 25 September 2021 after which is a requirement of the Code when forming a having been elected at the meeting of the nomination committee. By contrast, the Supervisory Supervisory Board on 20 September 2021. The Board will form an audit committee, at the latest at Supervisory Board is convinced that Mr Kullmann its final meeting of 2021. has sufficient time available to discharge his duties, particularly given that he does hold any other Re recommendation E.1 sentence 2: The positions covered by this recommendation. In Supervisory Board reserves the right to not comply addition, his considerable experience in corporate with the recommendation that it report to the management, his deep understanding of business Annual General Meeting on conflicts of interest as and his top-quality contacts, both in Germany and they arise and how they are addressed. The abroad, have made and will continue to make a key principle of confidentiality of deliberations within contribution to the effective work of the Supervisory the Supervisory Board (see § 116 sentence 2 AktG Board, firstly as Deputy Chairman from August 2019 and principle 13 sentence 3) will generally take to date and going forward as Chairman. Following precedence. 30 Anlage 1.4 / 30 41009653-1376911
CORPORATE GOVERNANCE REPORTING Dortmund, 20 September 2021 On behalf of the Supervisory Board Christian Kullmann Deputy Chairman On behalf of Borussia Dortmund Geschäftsführungs-GmbH Hans-Joachim Watzke Thomas Treß Carsten Cramer Managing Director (CEO) Managing Director Managing Director 31
GEMENT REPORT MANA sia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Borus 32
MANAGEMENT REPORT 33
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund MANAGEMENT REPORT Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund for the 2020/2021 financial year (hereinafter "Borussia Dortmund" or "Borussia Dortmund GmbH & Co. KGaA") BUSINESS TREND LOOKING BACK ON FINANCIAL YEAR 2020/2021 ATHLETIC PERFORMANCE COVID-19 pandemic UEFA Champions League The COVID-19 pandemic meant fewer spectators at Borussia Dortmund advanced from the group stage games in the first Bundesliga division. Borussia to the round of 16 of the UEFA Champions League Dortmund's first match of the season was against after finishing top of group F with four wins, one draw Borussia Mönchengladbach to a crowd of 6,918 on and one loss. The team celebrated a 3:2 victory in the 19 September 2020, followed by home fixtures first leg against Sevilla FC before drawing 2:2 at home against SC Freiburg (10,548 spectators) and FC to reach the quarter-finals, where it suffered close Schalke 04 (272 spectators). As the pandemic defeats to Manchester City in both legs and was progressed, the rest of the season was played behind knocked out of the competition. closed doors. Bundesliga DFB Cup Borussia Dortmund chalked up 64 points in the The team faced MSV Duisburg, Eintracht 2020/2021 Bundesliga season to finish in third place Braunschweig, SC Paderborn 07 and Borussia and qualify directly for the group stage of the UEFA Mönchengladbach on its way to resounding Champions League in the 2021/2022 season. victories against Holstein Kiel in the semi-final and RB Leipzig in the final. This was the fifth time that Borussia Dortmund has lifted the DFB Cup, and the team qualified for the DFL Super Cup in the 2021/2022 season. 34
MANAGEMENT REPORT PERFORMANCE INDICATORS Various financial and non-financial indicators are play a key role in preparing the budget for the coming used to measure performance. Borussia Dortmund financial year(s), in interim controlling with respect uses these internally-defined performance indicators to the earnings performance and when looking back to guide its entrepreneurial actions and to select the on a particular financial year. focus of its internal reporting. Another key performance indicator is the operating result (EBITDA). This is due to the considerable Financial performance indicators level of investment activity and the associated From a wide range of possible financial indicators, increase in depreciation, amortisation and Borussia Dortmund focuses on those specific write-downs. Therefore, EBITDA (EBIT adjusted for indicators that in the past few years were primarily depreciation, amortisation and write-downs) was used to steer the Company. selected to better benchmark the Company's annual performance. First and foremost is sales. Management uses this indicator to internally manage the Company, These indicators are rounded out by cash flows knowing full well that this indicator alone is not from operating activities and free cash flow, both sufficiently meaningful. Nevertheless, it provides a of which the Company uses for internal planning clear indication of the Company's economic purposes. strength, especially when compared against that of Free cash flow is defined as cash flows from competitors or when monitoring the Company's operating activities plus cash flows from investing long-term sales trend. activities and is a key indicator used to ensure that cash flows from operating activities are sufficient The result from operating activities (EBIT) and net to cover investments. Because Borussia Dortmund's income or loss for the year are also used to manage strategic objective is to maximize sporting success the Company. These financial performance indicators without incurring new debt, free cash flow is a key 35
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund indicator for the club. In light of steadily growing Measurable criteria include, for example, the transfer sums, free cash flow is thus becoming number of season tickets sold, attendance figures increasingly important. Furthermore, it is an and television broadcast hours. indicator used to determine whether Borussia Dortmund has sufficient funds to finance the steady Awards, surveys and studies represent possible dividend payments to its shareholders. Therefore, criteria that cannot be measured quantitatively. Borussia Dortmund strives to continuously optimise Another "soft" criterion is the deliberate selection free cash flow. of sponsors whose products and brand images are aligned with the Borussia Dortmund brand. Non-financial performance indicators Borussia Dortmund's only non-financial performance Borussia Dortmund's decision-makers receive indicator is the reach of its brand. reports about all criteria on a regular basis. Furthermore, taken as a whole, these are an While it is impossible to measure the reach of indicator of the success of the Company's strategic Borussia Dortmund's brand, it is determined by a alignment. number of criteria that, when taken together, are representative of the brand's reach. Compared to the previous year, there were no Some of these criteria are measureable, while changes to Borussia Dortmund's control system. others are not. Nevertheless, they are a reflection of the Company's appeal. The number of criteria varies and they are thus exchangeable. While any one factor may be of relevance during a given season, this may not necessarily be the case in subsequent years. New media in particular constantly provides new value drivers: for instance, the number of Facebook fans or page impressions represent relatively new indicators. 36
MANAGEMENT REPORT DEVELOPMENT OF THE MARKET AND COMPETITIVE ENVIRONMENT Sponsorships contractual claims of hospitality clients in particular Since the beginning of the 2020/2021 season, could not be met in full. As a result, Borussia Borussia Dortmund has had two kit sponsors. The Dortmund saw its income here decline. team wears kits bearing the logo of Evonik Industries AG in all international club competitions, friendlies Transfer deals staged abroad and DFB Cup matches, while 1&1 Five players left Borussia Dortmund in the summer Telecommunication SE is the kit sponsor for of 2020. After loaning Ömer Toprak for the past Bundesliga matches. financial year, SV Werder Bremen exercised its buy option to permanently secure the defender's Borussia Dortmund's newest official Premium services. Mario Götze joined Dutch first-division club Partner for the next five years is DEW21 Dortmunder PSV Eindhoven in the 2020/2021 season after his Energie- und Wasserversorgung GmbH. Both contract with Borussia Dortmund was not extended companies will leverage their proximity to one at the end of the previous season. Achraf Hakimi's another to further strengthen their social and loan spell also ended on 30 June 2020, at which time cultural outreach efforts in the city of Dortmund. he, too, departed Borussia Dortmund bound for Inter Milan. Dženis Burnić made the switch to 1. FC adesso SE is now the new primary and kit sponsor Heidenheim in the second Bundesliga division. André for Borussia Dortmund's youth squads. The Schürrle signed a rescission agreement with the Dortmund-based IT service provider will remain a club and ended his football career. sponsor until 2023, and from the 2021/2022 season onwards will also be the official kit sponsor for Three other players left Borussia Dortmund on loan Borussia Dortmund's new women's team. to other clubs: Leonardo Balerdi was loaned to Olympique Marseille in France's Ligue 1. After Borussia Dortmund extended its contract with its signing an early contract extension with Borussia Champion Partner ROWE Marketing GmbH early Dortmund until 30 June 2022, Immanuel Pherai was until 30 June 2025. loaned to PEC Zwolle for the current season. Both loan agreements are set to expire on 30 June 2021. In the 2020/2021 season, Borussia Dortmund also At the start of October 2020, Marius Wolf was loaned added Bybit (Wechain Fintech Pte. Ltd.) as a new to 1. FC Cologne until the end of the season. Champion Partner. Sergio Gómez had spent both the 2019/2020 and The COVID-19 pandemic continued to impact 2020/2021 seasons on loan to Spanish side SD sponsoring in the 2020/2021 season. The fact that Huesca, and Borussia Dortmund has now reached matches were mostly held without spectators placed an agreement to transfer him to Belgian restrictions on match-day advertising and the championship record-holders RSC Anderlecht on a 37
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund permanent basis as at 1 July 2021. His contract, Borussia Dortmund signed Soumaila Coulibaly, a which was most recently extended until 2022, will 17-year-old centre back from Paris Saint-Germain. be terminated as part of the transfer. At the end of May 2021, Borussia Dortmund signed Jeremy Toljan also spent the past two seasons on goalkeeper Gregor Kobel from Bundesliga rivals VfB loan, plying his trade at Italian Serie A side U.S. Stuttgart ahead of the new season. The 23-year-old Sassuolo. Certain conditions have triggered the signed a contract that runs until 30 June 2026. purchase option in his contract, resulting in a permanent transfer effective 1 July 2021. TV Marketing The call for tenders concerning the centralised Investments in the professional squad marketing strategy for distributing the national and Borussia Dortmund signed three new players in the international TV marketing income for the summer of 2020. Thomas Meunier departed Paris 2021/2022 to 2024/2025 seasons has been Saint-Germain for Borussia Dortmund on a free concluded for the time being. The distribution of transfer. Borussia Dortmund signed Jude the TV marketing income was resolved in Bellingham from Birmingham City and loaned Brazil December 2020. Greater stability and more U23 international Reinier Jesus Carvalho from Real solidarity are the objectives. In light of the decline Madrid until 30 June 2022. in income from national media rights, the consolidation being seen on international markets Felix Passlack returned to Borussia Dortmund and the significant decrease in sales at the club following his loan to Fortuna Sittard. The level due to the COVID-19 pandemic, the objective 22-year-old's contract was set to expire at the end of the future distribution system is primarily to of the season, and in May 2021 it was extended by ensure stability during this period of uncertainty, two years until 2023. while setting the course for the future and promoting solidarity at the same time. This offers In November 2020, Giovanni Reyna signed an early Bundesliga clubs planning certainty during the contract extension until 2025. February saw Marwin current difficult situation. Hitz sign an early contract extension until 2023. Nevertheless, a season without interruptions and Steffen Tigges and Ansgar Knauff, two of Borussia timely payments by partners in line with their Dortmund's talented youngsters, signed their first contracts are essential for ensuring the amount and professional contracts and joined the senior squad. timing of the distribution payouts. 38
MANAGEMENT REPORT The COVID-19 pandemic is also affecting As one season draws to a close it is customary for marketing income in UEFA club competitions. In season tickets go on sale for the next season, but as order to limit the financial impact of losses caused in the previous year this had to be put on hold due by the pandemic on the clubs participating in UEFA to the continuing uncertainties surrounding stadium club competitions in the 2019/2020 season, UEFA capacity in 2021/2022 in the wake of COVID-19. has decided to compensate for the income shortfall by cutting future payouts to participating Other clubs over five seasons (from the 2019/2020 to In December 2020, Borussia Dortmund parted ways the 2023/2024 season). with head coach Lucien Favre after two and a half For the 2024/2025 season, the UEFA Champions years. His assistant coach Edin Terzic took over as League will follow a new format. A total of 36 teams interim head coach until the end of the season. He will compete in a single league, signalling a was assisted by Sebastian Geppert, who until then departure from the current format's 32-team group had coached the U17 squad, and Otto Addo, who stage. This will likely further boost the international coaches BVB's top talents. TV marketing income generated from competing in the UEFA Champions League. From the 2021/2022 season onwards, Marco Rose from Bundesliga rivals Borussia Mönchengladbach Match operations will take over as new head coach at Borussia Due to the functional health and safety protocol, Dortmund, while Edin Terzic has extended his there were no interruptions to the past 2020/2021 contract through to 30 June 2025 and will be season. assuming the newly created role of technical In contrast to the original regulation, under which director. spectators were excluded from matches until 31 October 2020, Borussia Dortmund was able to Borussia Dortmund remains committed to continuity welcome back a limited number of spectators for its among its sporting management and extended the home matches against Borussia Mönchengladbach, contract with its head of the professional squad FC Schalke 04 and SC Freiburg at the beginning of Sebastian Kehl early until 30 June 2025. Sebastian the season. All subsequent home matches had to be Kehl will take over from Michael Zorc as sporting played behind closed doors due to the pandemic. director from 1 July 2022. Borussia Dortmund also This had a massive impact on the earnings potential extended the contract with its youth academy of match operations. director Lars Ricken early until 30 June 2025. 39
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Beginning in the 2021/2022 season, Borussia On the other hand, Thomas Treß and Carsten Dortmund will have a women's team. Instead of Cramer, whose contracts were set to expire on 30 acquiring the licence of another professional club June 2022, each signed early extensions until 30 we are organically developing and promoting June 2025. Thomas Treß will remain responsible for women's football from within our club. "Finance", "Organisation", "Legal" and "Investor Relations". Carsten Cramer is responsible for the A total of ten players from Borussia Dortmund's "Sales & Marketing" and "Digitalisation" areas. professional squad were called up to their respective national teams for the European Championship, Twelve of Europe's top clubs launched a new including Germany internationals Mats Hummels breakaway "Super League" to compete with the and Emre Can. UEFA Champions League, only to cancel this project mere days later. Borussia Dortmund lifted the DFB Cup for the fifth time after victories in 1965, 1989, 2012 and 2017. In early September 2020, Borussia Dortmund The team put on a sensational performance to defeat started live streaming on BVB's official Twitch RB Leipzig 4:1 in the final, which was held at Berlin's channel. YouTube star Erné "FeelFIFA" Embeli hosts Olympiastadion. the interactive program. Borussia Dortmund extended the contracts of its In the past financial year, Borussia Dortmund managing directors. Hans-Joachim Watzke will published its fourth Sustainability Report entitled continue to serve as CEO until 31 December 2025 "United in solidarity. No matter what." at and remains responsible for setting the Company's https://verantwortung.bvb.de/2020/en/home-en/.* strategic course, as well as for the areas of "Sports", "Communications" and "Human Resources". * The content accessible via the link does not constitute part of this management report. In accordance with the statutory requirements, KPMG AG Wirtschaftsprüfungsgesellschaft has neither audited the cross-references nor the information to which the cross-references refer. 40
MANAGEMENT REPORT GENERAL INFORMATION ABOUT THE COMPANY GROUP STRUCTURE AND BUSINESS OPERATIONS In addition to its core activities of playing football (100.00%), besttravel dortmund GmbH (100.00%), BVB and marketing SIGNAL IDUNA PARK, Borussia Fußballakademie GmbH (100.00%) and Orthomed Dortmund has established football-related lines of Medizinisches Leistungs- und Rehabilitationszentrum business. The Company currently holds indirect and GmbH (Orthomed GmbH) (33.33%). direct equity investments in the following companies: BVB Stadionmanagement GmbH (100.00%), BVB Some of these companies have concluded profit and Merchandising GmbH (100.00%), BVB Event & loss transfer agreements with the parent. Catering GmbH (100.00%), BVB Asia Pacific Pte. Ltd. Borussia Dortmund GmbH & Co. KGaA 100 % 100 % 100 % 100 % 100 % 100 % 33.33 % BVB Stadion- BVB Merchandising BVB Event & Catering besttravel dortmund BVB Fußballakademie BVB Asia Pacific Orthomed GmbH management GmbH GmbH GmbH GmbH GmbH Pte. Ltd. Consolidated tax group 66.67 % Orthomed Management 41
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund ORGANISATION OF MANAGEMENT AND CONTROL Borussia Dortmund Geschäftsführungs-GmbH, the Cramer; its sole shareholder is Ballspielverein general partner of Borussia Dortmund GmbH & Co. Borussia 09 e.V. Dortmund. KGaA, is responsible for management and The following chart shows the structures and representation of the latter. Borussia Dortmund responsibilities as between Ballspielverein Geschäftsführungs-GmbH is for its part Borussia 09 e.V. Dortmund, Borussia Dortmund represented by Managing Directors Hans-Joachim GmbH & Co. KGaA and Borussia Dortmund Watzke (Chairman), Thomas Treß and Carsten Geschäftsführungs-GmbH: Ballspielverein Borussia09e.VV.. Dortmund Executive Council of Board Economic Affairrss Borussia Dortmund elelectsects appointsappoints elelectsects Geschäftsführungs-GmbH Members’ Meeting (General Partner) appoints and monitappoints and monitororss Advisory Board Managing Directorrss Borussia Dortmund GmbH & Co. KGaA (Consisting of members of the Executive Board and Council of Economic Affairs and non-voting, associated members) Supervisory Board No right of appointment, onllyy right of supervision elel ectsects Annual General Meeting The Supervisory Board of Borussia Dortmund Nor is the Supervisory Board authorised to adopt GmbH & Co. KGaA, which is appointed by the Annual internal rules of procedure or to define a list of General Meeting, has limited rights and duties. transactions requiring its consent on behalf of the It has no authority with respect to matters involving general partner. Rather, such rights and duties personnel, i.e., no authority to appoint and dismiss are vested in the governing bodies of Borussia managing directors at Borussia Dortmund Ge- Dortmund Geschäftsführungs-GmbH, namely its schäftsführungs-GmbH or to stipulate the terms Advisory Board and the Executive Committee created of their contracts. by the Advisory Board. 42
MANAGEMENT REPORT The members of the Company's Supervisory Board waived 33.33% of their Supervisory Board remuneration in financial year 2020/2021. Their names, occupations and their further responsibilities on other management bodies are listed below: SUPERVISORY BOARDof Borussia Dortmund GmbH & Co. KGaA Gerd Christian Bernd Peer Ulrich Bjørn Dr. Reinhold Silke Bodo Judith Pieper Kullmann Geske Steinbrück Leitermann Gulden Lunow Seidel Löttgen Dommermuth Chairman Deputy Chairman (until (since 19 November 2020) 19 November 2020) FULL REMUNERATION PAYABLE FOR 2020/2021(EUR '000) 48 36 24 9 24 24 24 24 24 15 OCCUPATIONS(as at 30 June 2021) Retired; former Chairman of Managing Senior Advisor Chairman of the Chief Executive Medical Director Senior Executive Chair of the CDU Managing Managing the Executive partner of to the Manage- Managing Boards Officer of of Praxisklinik at Dortmunder parliamentary partner of JUVIA Director of Board of Evonik Bernd Geske ment Board of of group parent PUMA SE, Bornheim, Stadtwerke AG group in the state Verwaltungs Stadt- Industries AG, Lean ING-DiBa AG, companies of the Herzogenaurach Bornheim and Managing parliament of GmbH, Cologne Parfümerie Essen Communication, Frankfurt am SIGNAL IDUNA Director of North Rhine- Pieper GmbH, Meerbusch Main Group, Dortmund Hohenbuschei Westphalia, Herne (SIGNAL Kran- Beteiligungsge- detective chief kenversicherung sellschaft mbH, inspector Kriminalhaupt- a.G., Dortmund; Westfalentor 1 ( SIGNAL IDUNA GmbH and kommissar) Lebensversiche- Dortmund Logi- (ret.), public rung a.G., stik GmbH, all in administration Hamburg; Dortmund graduate SIGNAL IDUNA Unfallversiche- rung a.G., Dortmund; SIGNAL IDUNA Allgemeine Ver- sicherung AG, Dortmund) OTHER FUNCTIONS on statutory supervisory boards and comparable German or foreign supervisory bodies of commercial enterprises (as at 30 June 2021) Member of the Chairman of the Member and Chairman of the Member of the Advisory Board Supervisory Chairman of the Board Salling Advisory Board of Borussia Board of Clear- Supervisory Group A/S, of Borussia Dortmund VAT Aktiengesell- Board of Braband, Dortmund Geschäfts- schaft, Berlin Dortmunder Denmark (since Geschäfts- führungs-GmbH, Volksbank eG, 6 March 2020); führungs GmbH, Dortmund Dortmund; Member of the Dortmund Member and Supervisory Chairman of the Board of Tchibo Supervisory GmbH, Hamburg Board of Sana Kliniken AG, Ismaning 43
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Within Borussia Dortmund GmbH & Co. KGaA there "Human Resources", "Organisation", "Finance" and are seven independent functional areas below the "Legal & IR". The responsible employees and the management level, namely, "Sports", "Sales, functional organisational areas of which they are in Marketing & Digitalisation", "Communications", charge are shown in the chart below: Functional areas of Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund STRATEGY MANAGEMENT CORPORATE & CULTURE SECURITY Hans-Joachim Watzke(Chairman) Thomas Treß Carsten Cramer CORPORATE STRATEGY, CORPORATE COMMUNICATIONS, SPORTS, FINANCE, ORGANISATION, LEGAL & IR SALES, MARKETING, DIGITALIZATION COMMUNICATIONS, HUMAN RESOURCES WOMEN’S FOOTBALL Michael Zorc Sascha Fligge Corinna Borgmann Dr. Christian Hockenjos Mark Stahlschmidt Dr. Robin Steden SPORT COMMUNICATIONS HUMAN RESOURCES ORGANISATION FINANCE LEGAL & IR Professional Communications Recruiting Match Organisation Accounting Investor Marketing & Brand Football Strategy Relations Scouting Corporate Employer Security Payroll Legal Digital, CRM & E-Business Communications Branding Amateurs Sport Onboarding Accreditation Financial Compliance International & New Business Communications &Offboarding Control Youth International HR Development Associations Financial Corporate Responsibility and National PR Reporting Youth Academy Publications HR Management Event Management Risk Ticketing – Match Operations Management Editing Occupational Safety Fan Services Equity Merchandising and Content & Health Protection Investments Management Reception Insurance BVB TV Fleet Management Property Event & Catering Management IT 44
MANAGEMENT REPORT INTERNAL MANAGEMENT AND CONTROL SYSTEM Sports management be additionally improved in the major sales Going forward, we will continue to focus on categories of match operations, advertising, achieving success on the pitch under a budget tuned transfer deals and TV marketing, and operating for performance. To accomplish this objective, expenses, which can be lowered through disciplined Borussia Dortmund will continue to put together a management. competitive team in future with an emphasis on young, promising players. A key goal of the management of Borussia Dortmund is to achieve a lasting increase in profitability along Our sporting objectives will be aligned with our with bolstering its financial strength. In addition to financial circumstances, meaning that the makeup steadily improving the operating result (EBITDA) and of the squad and its cost structure will continue to the result from operating activities (EBIT), a positive depend on calculable variables on the income side. free cash flow is therefore the most important Qualifying for and participating in international financial objective of our Company. We seek to competitions has provided the financial flexibility to optimise these cash flows. reinforce the squad – with the goal of also establishing a presence in European competitions In the coming years, Borussia Dortmund will going forward. concentrate on generating steady sales growth while limiting operating expenditure. The decisive Financial management factor in this respect will be qualifying for Borussia Dortmund uses the result from operating international competitions. activities and the operating result as indicators for measuring the economic success of the Company. Capital management Borussia Dortmund derives its result from operating The capital management responsibilities of the activities from earnings before interest and taxes Company's management involve stabilising and (EBIT) and its operating result from earnings before increasing the equity of Borussia Dortmund. One of interest, taxes and depreciation and amortisation the main ways in which we will reach these (EBITDA). The Company continuously monitors both objectives is by improving the operating result and the operating result (EBITDA) and the result from making effective investments. operating activities (EBIT) of the segments on the The management uses the result from operating basis of monthly comparisons of the budgeted and activities (EBIT), the operating result (EBITDA) and actual figures. To optimise these indicators, the the net profit/loss for the year to manage the main factors to be leveraged are sales, which can Company. 45
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund CORPORATE STRATEGY Borussia Dortmund pursues the objective of • Germany continues to be one of Europe's largest defending its position in the top flight of the football markets, although it lags behind certain Bundesliga and sees itself well on the way to other European markets, such as the UK, in accomplishing that goal. terms of media exploitation rights. This means As the first listed German football company, we have that Germany has major growth potential. expanded our financial base by exclusively marketing the rights to SIGNAL IDUNA PARK as well as by All financial activities of Borussia Dortmund are utilising and maintaining the Borussia Dortmund geared towards the target groups relevant to a brand more effectively. The Company will continue football club: its fans, members and business to focus heavily on its core business of professional partners. Products and services should be tailored football and the sport's classic sales pillars: TV to these groups as closely as possible. Borussia marketing, advertising, match operations, transfer Dortmund intends to use the brand potential at its deals, conference, catering and miscellaneous disposal to take full advantage of the commercial activities, and merchandising. Borussia Dortmund is opportunities inherent in professional club football confident that it will be able to further stabilise and at an international level. expand its position for the following reasons: Its current business strategy can principally be • Borussia Dortmund is in sporting terms one of summarised as follows: the most successful, well known and popular German football clubs with an outstanding fan • Sustainably adjusting athletic prospects base that gives it one of the highest average • Intensifying the promotion of up-and-coming spectator numbers compared to other talent European football clubs. • Increasing fan involvement • A football enterprise can be financially • Utilising and maintaining the Borussia successful only if it enjoys sporting success Dortmund brand over the long term. In order to make its financial performance less dependent on short-term Financial performance and business development sporting success in the future, Borussia are dependent on footballing success. Since Dortmund will push ahead further with the footballing success is difficult to plan, the best national and international marketing of its that management can do is to create a solid brand name. 46
MANAGEMENT REPORT foundation for success. Investments, particularly activities and, if necessary, modify the strategy in the professional squad, are therefore a implemented as circumstances change. The key necessary prerequisite for achieving footballing figures for the sponsoring segment were already objectives such as qualifying for the UEFA budgeted for the coming years based on Champions League. However, in order to meet commitments from SIGNAL IDUNA Group (ending financial objectives, planned investments and 2026) and PUMA International Sports Marketing decisions must under certain circumstances be B.V. (ending 2028), the Company's chief partners, postponed to the extent these would only be as well as the two primary sponsors 1&1 possible by incurring new debt. Moreover, a player Telecommunication SE and Evonik Industries AG might be sold based on financial considerations (both ending 2025). in cases where this would not have happened had the decision been made purely on the basis of Income from international competitions is more sporting criteria. difficult to budget for, since it depends solely on the Thus a conflict arises between the pursuit of squad's footballing success. financial interests and sporting interests, i.e., a situation in which sporting considerations and financial considerations may be at odds with each other, particularly if the club continually falls short of its sporting goals. In such cases, management weighs the opportunities and risks to find a solution that does adequate justice to the Company's strategic objectives. Advertising plays a key role in this context. Over the years, advertising has grown to become one of the Company's largest income categories. In contrast to central TV marketing, where distribution is already clearly defined in advance, Company management is itself able to determine the requirements for and direction of sponsoring 47
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund DIVIDEND POLICY Two key indicators are assessed to shape Borussia In order to remain competitive, Borussia Dortmund Dortmund's dividend policy. intends to use its net income for the year and cash On the one hand, Borussia Dortmund assesses its and cash equivalents primarily for investments. earnings situation, and in the financial years before The primary focus is on strengthening the COVID-19 it generated a net profit. The Company professional squad, modernising SIGNAL IDUNA reported a net loss for the current financial year, PARK and expanding the training ground in in particular on account of the continuing effects Dortmund-Brackel. Despite these investments, it of the COVID-19 pandemic. is Borussia Dortmund's aim to continue distributing On the other hand, free cash flow is used to ensure a dividend to its shareholders every year, provided that cash flows from operating activities are it generates a net profit. sufficient to cover investments. Dividend distribution 30,000 20,000 10,000 2019/2020 0 2015/2016 2016/2017 2017/2018 2018/2019 -10,000 -20,000 -30,000 -40,000 -50,000 Net income/loss for the year (EUR ’000) Dividend distributed (EUR ’000) 48
MANAGEMENT REPORT CORPORATE GOVERNANCE DECLARATION PURSUANT TO § 289F HGB Pursuant to § 289f of the German Commercial Code In accordance with § 289b (2) sentence 2 HGB, (Handelsgesetzbuch, "HGB"), listed German stock Borussia Dortmund GmbH & Co. KGaA is exempt corporations (Aktiengesellschaften) must prepare a from preparing a non-financial statement. corporate governance declaration. This declaration includes the declaration of conformity with the The separate non-financial report is published online German Corporate Governance Code, and presents at https://aktie.bvb.de/eng/Corporate-Governance/ the corporate governance practices and the working sustainability-report.* principles of the management and the Supervisory Board and its committees. The corporate governance declaration is not included in the management report and is instead published online at * In accordance with the statutory requirements, KPMG AG Wirtschaftsprüfungsgesellschaft has neither substantively https://aktie.bvb.de/eng/Corporate-Governance/ audited the cross-references nor the information to which the Corporate-Governance-Declaration.* cross-references refer. 49
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund POSITION OF THE COMPANY DEVELOPMENT OF PERFORMANCE INDICATORS Development of financial performance indicators In the 2020/2021 financial year, Borussia Dortmund's Result from operating activities (EBIT) financial performance indicators – sales, result from In the past financial year, the result from operating operating activities (EBIT), operating result (EBITDA), activities amounted to EUR -76,580 thousand and net profit/net loss for the year, cash flows from the net loss for the year totalled EUR 76,479 operating activities and free cash flow – were as thousand. The report on expected developments follows: dated 30 June 2020 forecast a net loss for the year of between approximately EUR 70,000 thousand and Sales EUR 75,000 thousand. The result from operating Sales amounted to EUR 323,497 thousand in the activities (EBIT) for the full 2020/2021 financial year reporting period. In its Annual Report as at 30 June was forecast to fall approximately EUR 2,000 2020, Borussia Dortmund forecast that sales would thousand short of the net loss for the year. decline by approximately 20% for financial year 2020/2021 overall, based on the comparative figure Cash flows for financial year 2019/2020. Cash flows from operating activities amounted to EUR 40,769 thousand in the 2020/2021 financial year. Operating result (EBITDA) Borussia Dortmund forecasted as at 30 June 2020 EBITDA amounted to EUR 33,557 thousand in the that it would generate cash flows from operating past financial year; the forecast for the full activities of approximately EUR 44,000 thousand for 2020/2021 financial year in the Annual Report dated the full 2020/2021 financial year. 30 June 2020 had projected that EBITDA would be approximately EUR 100,000 thousand higher than Free cash flow the result from operating activities (EBIT), which Free cash flow in the 2020/2021 financial year was expected to amount to between EUR 25,000 amounted to EUR -50,452 thousand. The report on thousand and EUR 30,000 thousand. expected developments for the 2020/2021 financial year dated 30 June 2020 had forecast free cash flow of EUR -40,000 thousand. Borussia Dortmund KGaA (HGB) EUR '000 2020/2021 2019/2020 Sales 323,497 442,126 Operating result (EBITDA) 33,557 54,264 Result from operating activities (EBIT) -76,580 -51,283 Net loss for the year -76,479 -49,662 Cash flows from operating activities 40,769 111,654 Free cash flow -50,452 -48,718 50
MANAGEMENT REPORT Development of non-financial performance indicators Borussia Dortmund's strategic corporate BVB wants to focus more closely on youth work governance is centred around its fans, and their going forward, and develop specific activities and active involvement is fundamental to the club's initiatives for young people across various business strategy. Especially in times of educational levels. In addition, the club will uncertainty and social isolation, it is crucial that continuously set aside tickets for young people we maintain and strengthen communication with that are awarded in a transparent manner. our most important stakeholder group: our fans. Progress is also being made in developing the We discussed the current situation with fans, fan club's girl's and women's football programme. clubs and fan groups on many occasions in the Doing things "the Dortmund way", the ambitious past season. These talks demonstrated how much goal is for the BVB women's team to leave local our fans continue to value the sport, the club and league football behind as they aim higher. The most of all the footballing community. team around the team is already in place. World champion and Olympic gold medallist Annike BVB wants to understand the impact that the Krahn and ex-BVB pro Christian Timm are on pandemic is having on Borussia Dortmund's fan board in an advisory capacity, while Thomas culture. To this end, an academic study was carried Sulewski has been named coach for the new team. out in March which gave fans the opportunity to share their perception of the current status of the True to the guiding principle "Borussia unites!", club, its fan community and professional football BVB once again underscored its continuing in general. commitment to combating discrimination by adopting the International Holocaust Remembrance At the same time, BVB is a big proponent of Alliance's (IHRA) working definition of anti-Semitism engaging with its fans via its numerous digital in October 2020, an important step in the fight platforms, such as the fan podcast, virtual Fan against anti-Semitism. On 27 January 2021, Council meetings and BVB's official Twitch channel. DAZN broadcast episode 5 "Never forget" of its documentary series "BVB 09 – Stories who we are". 51
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund The episode poignantly demonstrates Borussia been suspended for a year due to the COVID-19 Dortmund's commitment to important social issues pandemic. by championing projects that promote a remembrance culture and historical and political In addition to being a socially responsible club, education. This also includes the club's active role Borussia Dortmund also takes its environmental in the "Changing the Chants" project, which is funded responsibility seriously. With this in mind, the club by the European Union. Over the past two years, formed additional cross-disciplinary project groups Borussia Dortmund has worked with Feyenoord that will increasingly tackle the issues related to the Rotterdam, Fare Network and the Anne Frank use of resources in match operations and mobility. In House to devise and strengthen strategies that cooperation with Dortmund's municipal utilities football clubs can use to educate fans about authority (DSW21), BVB is expanding its KombiTicket anti-Semitic behaviour in stadiums. Changing the combined match/transport ticket for both individual Chants revolves around two separate educational matches and season tickets. They will now cover the programmes for football fans run by Borussia entire state of North Rhine-Westphalia, thereby Dortmund and Feyenoord. The project's closing increasing the use of public transport and helping to meeting is planned for September 2021. cut CO2 emissions. The tickets had previously only been valid within the VRR transport authority region. This year will see BVB restart the historical and Borussia Dortmund is also helping make employees' political educational trips that it has run for fans daily commute more environmentally friendly by since 2008 and for employees since 2011. They had offering the chance to lease a bicycle via BVB on a subsidised basis. 52
MANAGEMENT REPORT garden in the allotments behind SIGNAL IDUNA The beginning of 2021 also saw the launch of "Sustainable Merchandising", a project to develop PARK and designing a nature trail in cooperation a sustainability concept for BVB merchandising with SIGNAL IDUNA and the City of Dortmund on based on a prototype product. It will cover the land belonging to the SIGNAL IDUNA Group. prototype's entire production chain, from materials, through processing, down to logistics During the pandemic, BVB has opted not to reduce and re-use. its employees' working hours and, during the lockdowns, provided job rotation opportunities In addition, BVB has launched further projects to within its various fields of activity. You can find all promote environmental protection and biodiversity, you need to know about sustainable development first and foremost using the club mascot, Emma, at BVB in our 2020/2021 Sustainability Report, in educational programmes for children and young which will be available from 29 October 2021 at people. Examples include the BVB educational https://verantwortung.bvb.de/en.* * The content accessible via the link does not constitute part of this management report. In accordance with the statutory requirements, KPMG AG Wirtschaftsprüfungsgesellschaft has neither audited the cross-references nor the information to which the cross-references refer. 53
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund RESULTS OF OPERATIONS During the reporting period (1 July 2020 to 30 June amounted to EUR -76,580 thousand (previous 2021), Borussia Dortmund generated sales of EUR year: EUR -51,283 thousand). 323,497 thousand (previous year: EUR 442,126 During the current reporting year, the operating thousand) and gross revenue of EUR 330,824 result (EBITDA) amounted to EUR 33,557 thousand thousand, a decrease of EUR 120,437 thousand (previous year: EUR 54,264 thousand). (26.69%) on the previous financial year. Earnings before taxes amounted to EUR -76,842 Borussia Dortmund generated a net loss of EUR thousand (previous year: EUR -49,368 thousand), 76,479 thousand during the 2020/2021 financial year while the result from operating activities (EBIT) (previous year: net loss of EUR 49,662 thousand). Sales in percent 0.17 % 7.15 % 2.02 % 32.96 % 57.70 % Transfer deals Conference, catering, miscellaneous TV Marketing Advertising Match operations 54
MANAGEMENT REPORT SALES TREND Borussia Dortmund generated sales of EUR 323,497 miscellaneous, and merchandising activities. thousand in the 2020/2021 financial year. The Income from advertising and TV marketing decline in income by EUR 118,629 thousand (26.83 increased year on year despite the severe percent) was due mainly to the drop in income restrictions as a result of the COVID-19 pandemic. from match operations, conference, catering, Sales in EUR '000 500,000 450,000 123,732 400,000 350,000 23,148 18,010 300,000 6,531 250,000 186,655 169,836 200,000 150,000 100,000 106,609 98,038 50,000 32,510 0 554 2020/2021 2019/2020 Transfer deals Conference, catering, miscellaneo TV Marketing Advertising Match operations 55
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund The performance of the individual sales items is due to the COVID-19 pandemic. Against this described in the following: backdrop, match-day advertising could not be compensated for fully and practically no advertising Income from match operations was shown in hospitality. Income from match operations decreased by EUR 31,956 thousand to EUR 554 thousand in financial The increase was due primarily to the new year 2020/2021. agreements with the two primary sponsors Evonik Industries AG and 1&1 Telecommunication SE as Income from match operations for domestic well as with the equipment supplier Puma SE that competitions declined by EUR 19,875 thousand to were entered into on 1 July 2020. The holder of the EUR 544 thousand. stadium's naming rights, SIGNAL IDUNA, the sleeve While the 2019/2020 season had seen twelve home sponsor, Opel Automobile GmbH, and the ten matches played to almost sell-out crowds at Champion Partners continue to contribute greatly SIGNAL IDUNA PARK, during the 2020/2021 season to income from advertising. Borussia Dortmund the national and regional restrictions put in place also added another sponsor for its youth in response to COVID-19 meant fewer spectators programmes: adesso SE. were permitted in stadiums, and then only for the first Bundesliga fixtures. Of the 17 Bundesliga home Furthermore, advertising income includes bonuses matches hosted by Borussia Dortmund, only three for the third-place Bundesliga finish, which directly (against Borussia Mönchengladbach, SC Freiburg qualified the team for the group stage of the UEFA and FC Schalke 04) were open to spectators, who Champions League in the 2021/2022 season, for were limited in number. reaching the quarter-finals of the UEFA Champions League in financial year 2020/2021, for competing The income from domestic and international cup in the DFL Super Cup at the beginning of the past competitions decreased by EUR 10,648 thousand, and season, and for reaching the final and winning the all of these matches were held behind closed doors. DFB Cup. Borussia Dortmund generated income of EUR 9 Income from TV marketing thousand from friendlies and proceeds generated In financial year 2020/2021, income from TV by the club's other teams in financial year marketing once again represented the highest share 2020/2021 (previous year: EUR 1,442 thousand). of sales (57.70%) and increased by EUR 16,819 Unlike in previous years, the pandemic prevented thousand year on year to EUR 186,655 thousand. the squad from travelling to Asia or the United TV marketing income from both domestic and States for preseason tours. international cup competitions rose. The income from TV broadcasts of Bundesliga matches Income from advertising remained virtually unchanged. In the financial year ended, Borussia Dortmund increased its advertising income by 8.74% to EUR Income from domestic TV marketing amounted to 106,609 thousand (previous year: EUR 98,038 EUR 97,826 thousand, up EUR 139 thousand thousand), representing a 32.96% share of total sales. against the prior-year reporting period. Only 89.83% of the increase in distribution Advertising income increased despite the announced prior to the pandemic actually restrictions on hospitality services and match day materialised at the end of the financial year. The advertising due to the COVID-19 pandemic. Borussia payouts for the 2020/2021 season were made on Dortmund hosted 24 home matches in the season the assumption that match operations would ended, of which 21 were played behind closed doors continue uninterrupted in 2020/2021, the season 56
MANAGEMENT REPORT would come to an orderly close and the marketing In the previous financial year, the players Maximilian partners would pay the budgeted amounts in full Philipp transferred to FC Dynamo Moscow, Abdou and on time. Since the distribution amount Diallo to Paris Saint-Germain, Alexander Isak to Real fluctuated in the 2020/2021 reporting period, DFL Sociedad, Julian Weigl to Benfica Lisbon, Paco Deutsche Fußball Liga GmbH was ultimately forced Alcácer to Villarreal CF, Jacob Bruun Larsen to TSG to reduce the income with respect to the planned Hoffenheim, Sebastian Rode to Eintracht Frankfurt international TV marketing payouts. and Shinji Kagawa to Real Zaragoza. Furthermore, the players Dženis Burnić, Jeremy Toljan, Ömer Income from international TV marketing for Toprak, André Schürrle and Marius Wolf were competing in the UEFA Champions League loaned out. These transfers also generated amounted to EUR 78,698 thousand in the financial subsequent transfer proceeds and loan fees. year (previous year: EUR 67,420 thousand). The increase of EUR 11,278 thousand is due to the Conference, catering and higher performance bonus, since Borussia miscellaneous income Dortmund amassed four wins and one draw in the Conference, catering and miscellaneous income group stage. In the previous year, Borussia amounted to EUR 6,531 thousand (previous year: Dortmund only managed three wins and one draw. EUR 18,010 thousand) and also included sales from In addition, Borussia Dortmund reached the advance booking fees, rental and lease income and quarter-finals of the UEFA Champions League for release fees for national team players. the first time since 2017, although the team was Conference and catering income, which comprises knocked out of the competition following two income generated by the hospitality areas and defeats to Manchester City. events, decreased by EUR 2,067 thousand from EUR 2,258 thousand in the previous year to EUR 191 Unlike in the previous year, Borussia Dortmund thousand. The lack of spectators at 14 of 17 failed to win the DFL Super Cup, its first competitive Bundesliga home matches and fewer hospitality match of the current financial year. Borussia customers at the first three Bundesliga home Dortmund reached the final of the DFB Cup, where fixtures meant that only limited sales were the team chalked up a resounding victory against generated in the hospitality areas. RB Leipzig in Berlin. Income from domestic cup competitions thus amounted to EUR 10,131 In the reporting period from 1 July 2020 to 30 June thousand (previous year: EUR 4,729 thousand). 2021, advance booking fees, postage and miscellaneous income, which includes the Evonik Transfer income Football Academy, rental and lease income and Income from transfer deals declined by EUR BVB TV, decreased by EUR 8,969 thousand to 100,584 thousand to EUR 23,148 thousand (previous EUR4,072 thousand. This was due primarily to the year: EUR 123,732 thousand) lack of advance booking fees due to the restrictions on spectators imposed in response to the This resulted from the transfers of the players Ömer COVID-19 pandemic. Toprak to Werder Bremen and Dženis Burnić to 1. As well as the lack of advance booking fees for FC Heidenheim. In addition, Leonardo Balerdi was match day ticket sales, there was a shortfall in loaned to Olympique Marseille, Jeremy Toljan advance booking fees for season tickets after was loaned to U.S. Sassuolo and Sergio Gómez Borussia Dortmund decided as in the previous year was loaned to SD Huesca. Borussia Dortmund that it would initially suspend season ticket sales also generated subsequent transfer income. at the end of the season given the inability to Furthermore, Mario Götze left to join PSV Eindhoven predict how the pandemic would develop. on a free transfer. Likewise, the Football Academy was prevented 57
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund from running courses (either national or Other operating income decreased by EUR 1,771 international) for months. A further reason for the thousand year on year to EUR 7,327 thousand. As decline in income was the fact that this year's DFL in the previous year, this included primarily income Super Cup was held in Munich. Moreover, unlike from provisions, insurance reimbursements, in the previous year, no (four-part) documentary unclaimed refunds and a reimbursement for series about Borussia Dortmund was marketed granting contractual marketing rights. Other in the past financial year. operating income includes prior-period income in the amount of EUR 1,898 thousand (previous year: The release fees for national team players declined EUR 5,382 thousand). by EUR 443 thousand from EUR 2,711 thousand in the previous year to EUR 2,268 thousand. DEVELOPMENT OF SIGNIFICANT OPERATING EXPENSES Personnel expenses above the figure as at 30 June 2020 and included In financial year 2020/2021, personnel expenses write-downs of EUR 1,591 thousand. amounted to EUR 205,604 thousand (previous year: EUR 203,523 thousand). During the period from 1 July 2020 to 30 June Personnel expenses for the professional squad 2021, intangible fixed assets – which consist increased by 1.07% year on year. The base salary primarily of Borussia Dortmund's player rose by EUR 2,472 thousand. Performance-based registrations – were amortised in the amount of bonuses amounted to EUR 28,742 thousand EUR 98,017 thousand (previous year: EUR 93,093 (previous year: EUR 29,363 thousand) and comprised thousand). annual bonuses and performance-based bonuses for winning the DFB Cup, for finishing third place in Furthermore, EUR 1,591 thousand in write-downs the Bundesliga with 64 points, for reaching the of intangible fixed assets to their fair values were quarter-finals of the UEFA Champions League and recognised (previous year: EUR 1,930 thousand). for qualifying directly for the group stage of the 2021/2022 UEFA Champions League. Depreciation and write-downs of tangible fixed assets remained roughly level at EUR 10,529 In the reporting period, personnel expenses related (previous year: EUR 10,524 thousand). to the retail and administration areas increased by EUR 976 thousand year on year to EUR 19,279 Other operating expenses thousand. Other operating expenses decreased by EUR Personnel expenses in relation to amateur and 101,811 thousand or approximately 52.62% across youth football amounted to EUR 11,398 thousand all items of other operating expenses, from EUR during the current 2020/2021 financial year 193,474 thousand in the previous year to EUR (previous year: EUR 12,144 thousand). 91,663 thousand in the reporting period. Depreciation, amortisation and The largest decrease under this item was seen in write-downs transfer deals, which fell by EUR 70,493 thousand Depreciation, amortisation and write-downs to EUR 9,565 thousand. By contrast to the previous amounted to EUR 110,137 thousand during the year, during which transfer deals resulted in the reporting period. This was EUR 4,590 thousand carrying amounts for the players Maximilian Philipp, 58
MANAGEMENT REPORTLAGEBERICHT Administrative expenses decreased during the Abdou Diallo, Alexander Isak, Julian Weigl, Paco Alcácer, Jacob Bruun Larsen and Sebastian Rode financial year ended by EUR 2,279 thousand to EUR being derecognised, the only carrying amounts 22,815 thousand. A slight increase in IT expenses derecognised this financial year were for the players was offset by significantly lower travel, Ömer Toprak and Dženis Burnić as well as for the representation and event expenses. former trainer Lucien Favre. This item also includes sales-related costs for departures and other Other expenses decreased by EUR 4,106 thousand (subsequent) variable transfer compensation. to EUR 4,816 thousand. This reduction was caused mainly by lower allowances on receivables and Expenses from match operations decreased by EUR lower losses on disposals of fixed assets as well as 8,576 thousand to EUR 41,405 thousand (previous lower expenses for office supplies. year: EUR 49,981 thousand). This was due mainly to lower catering and match day expenses, as only Financial result three home matches were played for the 2020/2021 The financial result for financial year 2020/2021 season, with severely restricted stadium capacity. amounted to EUR -262 thousand (previous year: EUR 1,915 thousand) and breaks down as follows: Advertising expenses decreased by EUR 15,826 Income and expenses from profit and loss transfer thousand. Despite the increase in advertising agreements amounted to EUR 259 thousand. income, the newly signed agency licensing agreement with the marketing firm SPORTFIVE These include the results of BVB Merchandising Germany GmbH made it possible to significantly GmbH, BVB Event & Catering GmbH, BVB Stadion- reduce the agency commission payable. management GmbH and BVB Fußballakademie GmbH and besttravel dortmund GmbH. Income and expenses from profit and loss transfer agreements Net profit/loss Net profit/loss 01/07/2020 to 01/07/2019 to 30/06/2021 30/06/2020 (EUR '000) BVB Stadionmanagement GmbH 42 64 besttravel dortmund GmbH 100 566 BVB Merchandising GmbH -748 2,458 BVB Event & Catering GmbH 725 1,581 BVB Fußballakademie GmbH 140 - 259 4,669 Furthermore, interest income of EUR 121 thousand amounted to EUR 2,934 thousand and comprised was recognised and related to entirely to mainly EUR 1,323 thousand in discounting effects compounding. and EUR 1,452 thousand in financing charges. Interest expenses amounted to EUR 642 thousand and comprised mainly financing charges of EUR 554 Tax on income of EUR 342 thousand were reported thousand and discounting effects of EUR 40 in the 2020/2021 financial year (previous year: thousand. In the previous year, interest expenses had EUR -50 thousand). 59
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund ANALYSIS OF CAPITAL STRUCTURE DEVELOPMENT AND PERFORMANCE OF THE BUSINESS As at 30 June 2021, total assets amounted to EUR June 2020. The additions amounted to EUR 62,091 453,745 thousand, representing a decrease of thousand (of which EUR 58,738 thousand to EUR 65,023 thousand as compared to 30 June 2020. intangible fixed assets) and are attributable to investments. Fixed assets amounted to EUR 398,903 thousand, This was offset by disposals amounting to EUR 4,517 down EUR 52,563 thousand on the figure as at 30 thousand and depreciation amounting to EUR 110,137 BALANCE SHEET of Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund 30/06/2021 30/06/2020 ASSETS EUR '000 Shareholding % EUR '000 Shareholding % A. FIXED ASSETS I. Intangible fixed assets 1. Purchased concessions, industrial and similar rights and assets, and licences in such rights and assets 203,935 45.0 248,880 48.0 2. Prepayments 68 0.0 68 0.0 204,003 45.0 248,948 48.0 II. Tangible fixed assets 1. Land, land rights and buildings including buildings on third-party land 167,784 36.9 172,481 33.3 2. Other equipment, operating and office equipment 14,682 3.2 16,336 3.1 3. Prepayments and assets under construction 259 0.0 1,952 0.4 182,725 40.1 190,769 36.8 III. Long-term financial assets 1. Shares in affiliated companies 12,052 2.6 11,621 2.2 2. Equity investments 96 0.0 96 0.0 3. Other loans 27 0.0 32 0.0 12,175 2.6 11,749 2.2 398,903 87.7 451,466 87.0 B. CURRENT ASSETS I. Inventories Merchandise 67 0.2 46 0.0 II. Receivables and other assets 1. Trade receivables 32,740 7.2 45,563 8.8 2. Receivables from affiliated companies 1,570 0.3 1,511 0.3 3. Other assets 2,303 0.5 1,516 0.3 36,613 8.0 48,590 9.4 III. Cash-in-hand, bank balances 3,466 0.7 3,157 0.6 40,146 8.9 51,793 10.0 C. PREPAID EXPENSES 14,696 3.2 15,509 3.0 453,745 100.0 518,768 100.0 60
MANAGEMENT REPORT thousand. This included EUR 1,591 thousand in attributable to trade receivables, which decreased write-downs. There were no reversals of write-downs. by EUR 12,823 thousand to EUR 32,740 thousand (previous year: EUR 45,563 thousand) due mainly Current assets amounted to EUR 40,146 thousand, to lower transfer receivables and lower receivables down EUR 11,647 thousand from the figure as at from advertising partners. 30 June 2020. This decline was primarily BALANCE SHEET of Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund 30/06/2021 30/06/2020 EQUITY AND LIABILITIES EUR '000 Shareholding % EUR '000 Shareholding % A. EQUITY I. Subscribed capital 92,000 20.3 92,000 17.7 less nominal value of treasury shares -19 0.0 -19 0.0 Issued capital 91,981 20.3 91,981 17.7 II. Capital reserves 144,337 31.8 144,337 27.8 III. Revenue reserves 1. Reserve for treasury shares 19 0.0 19 0.0 2. Other revenue reserves 147,662 32.5 147,662 28.5 147,681 32.5 147,681 28.5 IV. Net income/net loss for the year -126,141 -27.8 -49,662 -9.6 257,858 56.8 334,337 64.4 B. PROVISIONS 1. Provisions for taxes 36 0.0 36 0.0 2. Other provisions 10,265 2.3 8,150 1.6 10,301 2.3 8,186 1.6 C. LIABILITIES 1. Liabilities to banks 58,792 12.9 8,031 1.5 2. Trade payables 97,864 21.6 135,122 26.0 3. Liabilities to affiliated companies 7,367 1.6 4,719 0.9 4. Other liabilities 17,113 3.8 24,675 4.8 of which from taxes: EUR 6,898 thousand (previous year: EUR 9,870 thousand) of which in relation to social security: EUR 38 thousand (previous year: EUR 35 thousand) 181,136 39.9 172,547 33.2 D. DEFERRED INCOME 4,450 1.0 3,698 0.8 453,745 100.0 518,768 100.0 61
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Prepaid expenses remained virtually level, declining Liabilities increased by a total of EUR 8,589 thousand by a mere EUR 813 thousand to EUR 14,696 to EUR 181,136 thousand (previous year: EUR thousand (previous year: EUR 15,509 thousand). 172,547 thousand). Share capital remained level at EUR 92,000 thousand Trade payables declined by EUR 37,258 thousand to as at 30 June 2021. EUR 97,864 thousand (previous year: EUR 135,122 Taking into account net income for the year, Borussia thousand), due primarily to transfer liabilities settled Dortmund's equity amounted to EUR 257,858 in the financial year. However, liabilities to affiliated thousand as at 30 June 2021. This corresponds to companies amounted to EUR 7,367 thousand, up an equity ratio of 56.83% (previous year: 64.45%). EUR 2,648 thousand on the previous year's figure of EUR 4,719 thousand. By contrast, other liabilities Provisions increased by a total of EUR 2,115 decreased by EUR 7,562 thousand to EUR 17,113 thousand to EUR 10,301 thousand (previous year: thousand. Liabilities to banks of EUR 58,792 EUR 8,186 thousand). This increase was attributable thousand were reported at the balance sheet date. in its entirety to the growth in other provisions, which in turn was due primarily to higher staff-related Deferred income remained virtually level at provisions. No provisions for litigation and liability EUR4,450 (previous year: EUR 3,698 thousand). risks relating to legal proceedings were recognised as at 30 June 2021. Tax provisions remained level at EUR 36 thousand. ANALYSIS OF CAPITAL EXPENDITURE In the past financial year, Borussia Dortmund expanded over several phases until 2022. This invested EUR 58,738 thousand in intangible fixed involved acquiring further adjacent land and assets. The entirety of this amount was invested in opening a new fitness area. Other steps are the player base. currently being implemented. Cash payments for tangible fixed assets during the Secondly, Borussia Dortmund is currently same period amounted to EUR 2,918 thousand and designing its new fan and youth centre which will primarily include investments in the Brackel be located on the Strobelallee. The centre will offer training ground in connection with the project to a variety of programmes intended above all to expand BVB's training centre. improve communication with the fans and to establish it as a type of community centre for fans. The focus of future investments will firstly continue There are also plans to further develop and expand to be on the project to expand BVB's training centre. the infrastructure and the areas in and around The training ground and the youth academy will be SIGNAL IDUNA PARK. 62
MANAGEMENT REPORT ANALYSIS OF LIQUIDITY As at 30 June 2021, Borussia Dortmund held EUR 120,000 thousand in overdraft facilities, some unrestricted cash funds of EUR 3,466 thousand. of which had been drawn down as at the balance Borussia Dortmund also had access to an additional sheet date. Cash flows from operating activities amounted to EUR 40,769 thousand and are calculated as follows: EUR '000 2020/2021 2019/2020 Net income/net loss for the period -76,479 -49,662 Depreciation, amortisation and write-downs/reversals of write-downs of fixed assets 110,137 103,915 Non-cash expenses and income 4,156 65,665 Increase/decrease in provisions 2,049 -5,141 Interest expense 642 2,934 Interest income -121 -180 Income taxes -342 50 Loss on disposal of fixed assets 0 106 Decrease in inventories, trade receivables and other assets not attributable to investing or financing activities 12,769 5,687 Increase/decrease in trade payables and other liabilities not attributable to investing or financing activities -11,848 -12,025 Interest paid -602 0 Income taxes received 408 305 Cash flows from operating activities 40,769 111,654 NET ASSETS Borussia Dortmund's total assets decreased from Prepaid expenses declined by EUR 813 thousand to EUR 518,768 thousand to EUR 453,745 thousand. EUR 14,696 thousand, which was due mainly to lower Fixed assets declined by EUR 52,563 thousand. prepaid personnel expenses. Trade receivables and other financial receivables decreased by EUR 11,977 thousand to EUR 36,613 thousand. 63
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund OVERALL ASSESSMENT OF FINANCIAL POSITION AND PERFORMANCE AND BUSINESS DEVELOPMENT Borussia Dortmund ended the 2020/2021 financial The ongoing COVID-19 pandemic continued to year with a net loss for the year of EUR 76,479 weigh heavily on profitability and ultimately thousand. earnings in the 2020/2021 season. The effects of the pandemic are particularly clear in match Taking into account the net loss for the year, the operations and conference, catering and equity ratio is calculated at 56.83%. As at 30 June miscellaneous. The transfer business has also 2021, Borussia Dortmund held unrestricted cash taken a major hit to its sales figures. Given this, funds of EUR 3,466 thousand. As at the balance business development during financial year sheet date, Borussia Dortmund had access to an 2020/2021 was less than satisfactory. additional EUR 120,000 thousand in overdraft facilities, some of which had been drawn down. REMUNERATION REPORT The structure of the management remuneration remuneration. Any additional non-cash or ancillary system is defined and regularly reviewed by the benefits granted relate primarily to insurance Executive Committee of the Advisory Board. The benefits at standard market conditions and the Executive Committee of the Advisory Board of provision of a company car. The Company does not Borussia Dortmund Geschäftsführungs-GmbH is offer any stock option plans or similar incentive also responsible for setting the remuneration of the plans. The remuneration components provided are individual executives and for defining the appro- reasonable both in and of themselves and taken as priate amount of remuneration. The appropriate a whole (see Note 36 to the consolidated financial remuneration level is defined in particular on the statements). basis of the specific executive's responsibilities and performance, as well as on the basis of Borussia Remuneration of the Supervisory Board is gover- Dortmund's financial position, performance and ned by Article 13 of the Articles of Association, pur- future prospects. suant to which each member of the Supervisory Board receives fixed remuneration amounting to Executive remuneration consists of two compo- EUR 24 thousand; the Chairman receives twice that nents: a fixed amount and a variable component. amount and the Deputy Chairman one and a half The fixed component is stipulated by contract, times that amount. Value added tax is reimbursed takes into account the sporting success achieved to the members of the Supervisory Board. and is paid out in twelve equal monthly instal- ments. The variable component is based on the The disclosures required by § 285 no. 9 HGB are business trend and is dependent on net income for included in the notes to the financial statements the year before tax and the managing directors' under the section entitled "General partner". 64
MANAGEMENT REPORT THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM AS IT RELATES TO THE ACCOUNTING PROCESS The key features of the accounting process-related • The departments involved in the accounting internal control and risk management system process fulfil quantitative and qualitative employed by Borussia Dortmund can be described requirements. as follows: • The completeness and accuracy of the • Borussia Dortmund distinguishes itself through accounting data is checked regularly by its clear organisational and corporate structures reviewing samples and conducting plausibility as well as its control and monitoring structures. tests, both manually and by means of software employed for this purpose. • The internal control and risk management systems as they relate to the accounting • The principle of dual control is adhered to at all process form an integral part of operational and points in the Company's accounting-related strategic planning processes. processes. • Responsibilities have been clearly assigned in • The management receives reports at scheduled all areas of the accounting process (such as intervals throughout the process or more financial accounting and management cost frequently if necessary. accounting). • The Supervisory Board deals with the key • Reporting is carried out in monthly, quarterly, accounting issues, risk management and the semi-annual and annual intervals, whereby a audit assignment, among other things. distinction is made between matters requiring immediate action by the Company and those The accounting process-related internal control and involving Company strategy. risk management system, the key features of which are described above, ensures that transactions can • The computer systems used in accounting are be correctly recorded, prepared and accounted for protected against unauthorised access. in the financial statements. • An adequate system of internal guidelines has been established and is updated as needed. 65
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund OPPORTUNITY AND RISK REPORT RISK MANAGEMENT Borussia Dortmund's divisions are exposed to a wide The currency and detail of the regular risk reports variety of risks that are inseparably linked to the given to the governing bodies of Borussia conduct of business. Dortmund keep them informed of the Group's current risk profile. The sections below focus on possible future developments or events which could cause This ensures that the Company's decision-makers Borussia Dortmund to perform either better than have adequate flexibility to be able to monitor and expected (opportunities) or worse than expected manage risks. (risks). The respective impact of opportunities and risks are generally presented separately and are This year, the risk inventory procedure implemented not offset against one other. Generally speaking, with the objective of cataloguing and assessing all risks and opportunities are assessed over a risks has again proven effective as a management mid-length term of two years. All risks of loss to tool. Risks are identified, discussed and reviewed in which the Company is exposed (individual and consideration of current circumstances in cumulative risks) are monitored and managed one-on-one meetings or plenary sessions in order to within the risk management system. assess the current likelihood of their occurring and The consolidated group for risk management their potential consequences. purposes is identical to the consolidated group in the consolidated financial statements Each risk is given a qualitative rating of between 1 and 4, with 1 indicating a low level of risk and 4 A functioning control and monitoring system is indicating a very high level of risk. essential for identifying risks early and for assessing A risk impact assessment is carried out both before and counteracting them. It is the responsibility of the and after the identification and development of internal risk management system to monitor and countermeasures to reduce the risk. The risk impact control such potential risks. assessments are weighted before and after The risk management system is based on countermeasures based on a ratio of 1:2, with principles and guidelines laid out by the weighting prioritising the probability and management. These principles and guidelines are consequences of each risk after countermeasures designed to facilitate the early identification of any take effect. In mathematical terms, the risk impact irregularities so that appropriate countermeasures assessment (before countermeasures) is derived can be taken immediately. In order to ensure the by adding the probability of the risk and its highest possible level of transparency, risk consequences before countermeasures, while the management has been incorporated into the assessment (after countermeasures) is derived by organisational structure of the Group as a whole. adding the probability of the risk and its All departments and divisions are required to consequences, and multiplying this figure by two. immediately report any Company-relevant changes in the risk portfolio to the management. The risk management system is also an integral component of the overarching planning, steering and reporting process. 66
MANAGEMENT REPORT Example Categorisation of risks Before countermeasures: In accordance with the recommendations under Probability 2 2+3=5 5 German Accounting Standard DRS 20, and to Consequences 3 ensure ease of reference, Borussia Dortmund After countermeasures: divides its risks into main categories. The nine Probability 1 defined main categories (strategic risk, personnel Consequences 2 (1+2)x2=6 6 risk, macroeconomic risk, competitive risk, liquidity TOTAL 11 risk, interest rate risk, credit risk, resources risk and ecological risk) are presented and explained in greater detail below. If the assessment of an individual risk falls within the top third of the scale (a score of 17 to 24), All 61 risks that could have a direct impact on the Borussia Dortmund classifies it as a high-priority Company fall within these categories. In risk. Particular attention is paid to such risks, since comparison with the previous year (62 risks), the they are capable of having a material adverse and total number was reduced by one risk that no long-term effect on the Company's assets, longer meets the criterion of materiality. liabilities, financial position and profit or loss. There Three new risks (legal transgressions by are currently 26 (previous year: 23) risks that are professional players, lack of transfers/willingness classified as high priority. to transfer, and IT cyber risks) were added to the 23 The currency and detail of the regular risk reports risks that had been classified as high-priority in the given to the governing bodies of Borussia past period. No high-priority risks were removed. Dortmund keep them informed of the Group's Further to the notes on opportunities and risks in current risk profile. the 2019/2020 Annual Report, the focus during the This ensures that the Company's decision-makers current reporting period (financial year 2020/2021) have adequate flexibility to be able to monitor and was primarily on the persistent impact of the manage risks. COVID-19 pandemic, which continues to impact almost all risk categories. The following is a discussion of the 26 high-priority risks in their respective categories. 67
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Category 1 – strategic risk fails to qualify for any international competition at We define strategic risk as risk arising from all. The objective of a corresponding worst case incorrect business decisions, poor implementation scenario is not to predict the future but rather to of decisions or the inability to adapt to changes in provide an overview of various contingencies and the corporate environment. Strategic risk also their effects and to better assist the management arises from unexpected changes in market in its strategic planning. conditions and the environment in which the Company operates, which bring with them negative Share price performance describes the consequences for the Company's assets, liabilities, performance of a security, an index, shares or a financial position and profit or loss. portfolio, but also the performance of the management of an investment fund with respect to This category includes four high-priority risks: its investment objectives. The Group is very conscious of the risk associated with the The risk that financial planning is dependent on performance of Borussia Dortmund's shares and sporting success describes the risk that failing to continually analyses the Company's value on the achieve planned sporting objectives could led to a capital market and the consequences of it being lack of adequate income or proceeds. To account for undervalued. A key component of this risk is the any and all developments both on and off the pitch, impact of these factors on potential corporate action the Company revises and updates its longstanding in the future and the Company's appeal to business financial and liquidity planning at least three times partners. This risk is countered through continual per year based on the latest premises. It is all the communication with the capital market. The shares more important for planning projections to be have been listed on the Prime Standard segment modified on a permanent basis, especially during the of the Frankfurt Stock Exchange since May 2014 COVID-19 pandemic in which the external conditions and are also admitted to trading on the SDAX. are changing faster than ever before. In addition to During the current financial year, Borussia the income statement and the statement of financial Dortmund again held several roadshows in Europe position, this also includes the development of and the United States, either on site or in virtual Borussia Dortmund's liquidity. It allows the form on account of the COVID-19 pandemic, in an management to monitor the current and future effort to keep existing investors up to date and bring financial position of the Company at all times and to any prospective investors on board. take any necessary action. Due to developments with regard to income from international TV marketing in Borussia Dortmund considers the third risk in this particular, the amount that a club is certain to receive category to be the risk of conflicting goals of for a given subsequent season varies greatly from a sporting and commercial success. It is important second-place finish to a seventh-place finish in the that Borussia Dortmund continues to pursue Bundesliga. Qualifying for the UEFA Champions balanced business policies with the aim of ensuring League guarantees much higher proceeds than that the club remains competitive and also focussed qualifying for the UEFA Europa League or UEFA on meeting the Group's performance indicators. Europa Conference League, let alone if the team Borussia Dortmund will continue to avoid financial 68
MANAGEMENT REPORT loss of system or data integrity (e.g., data corruption risks that could arise on account of uncertain sporting successes. As in previous years, Borussia by means of malware), compromising IT system or Dortmund further counters this risk by setting strict data availability (e.g., internal business interruption, budgets for the individual divisions and undertaking outages in external communications). On the other corporate planning on a revolving basis using hand, IT cyber risks arise from the opportunity for various planning scenarios. Furthermore, the large volumes of information to be disseminated Company also uses planning scenarios to calculate widely, cheaply and at breakneck speed (e.g., e-mail various earnings and liquidity effects potentially campaigns against the Company, calls on social presenting additional opportunities for financial media to boycott the Company) and from social investment or shortfalls. It is of fundamental hacking. Borussia Dortmund seeks to counter these importance to permanently modify the planning IT cyber risks by reducing the risk of occurrence projections and to balance the need to remain through investments in data security and data competitive on the pitch and ensure economic protection. That includes expanding the firewall to stability and success on the one hand with the protect against external attacks and launching corresponding countermeasures that have already Project Security, a general initiative to identify and been taken to reduce the likelihood of the risk address potential security vulnerabilities. occurring on the other, especially during the COVID-19 pandemic in which the external Category 2 – personnel risk conditions are changing faster than ever before. The importance of human resources to companies The transfer business remains a key action area is growing. The Company's success is largely for Borussia Dortmund and is one of the most dependent on the commitment, motivation and important sources of income in the business of skills of both its sporting personnel and football. Achieving high sums for transfers often managerial/administrative staff. involves a loss of sporting quality within the squad, but after carefully weighing up all of the athletic This category currently includes five high-priority and business aspects it is possible that risks: value-driven transfers may also be concluded contrary to the Company's sporting interests. Protecting confidential information is a subject that remains in the public eye. Never before has data A new high-priority risk in this category are IT cyber protection posed so many challenges. In particular, risks, which are closely linked with protecting the increasing internationalisation of day-to-day confidential information. They are generally business operations necessitates a detailed understood as the risks posed while navigating a understanding of the respective data protection digital and interconnected world (cyberspace). In regulations applicable in individual countries. In specific terms, on the one hand IT cyber risks addition, technical progress harbours many pitfalls, involve the possibility of wilful and targeted cyber especially in relation to online data. Hackers stepped attacks on data and IT systems. The consequences up their attacks in recent years, releasing the of these attacks include: compromising data personal data of politicians, celebrities and others. confidentiality (e.g., data losses, data espionage), Action has to be taken to prevent the unauthorised 69
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund access and manipulation of data. Confidential data human life takes precedence – that goes without that is processed, transferred or stored online must saying – but the economic consequences for the be encrypted. The data should remain encrypted businesses involved have also been immense. and protected even if the online application is There thus continues to be a risk of travel and other compromised. The IT security officers, the heads of accidents, terrorist attacks and miscellaneous; the individual application areas and the data therefore, Borussia Dortmund continues to classify protection officers are responsible for initiating the this risk as high priority. data; the developers and administrators are responsible for implementation. To meet the The risk of legal transgressions by professional increased requirements for cyber security and IT in players was newly classified as a high-priority risk general, action was taken to significantly increase this financial year. It covers the risks arising due to staffing levels in IT. misconduct among members of the professional squad, including doping offences, illegal sports The risk of periods during which professional betting or inappropriate conduct on social media. players are unable to play (rest periods) can have The consequences of such misconduct may include a major impact on the Company's success, match suspensions and reputational damage for because they mean that team managers are players and the club, or legal disputes. The action unable to play the best possible team for the entire that Borussia Dortmund takes to mitigate this risk season, putting sporting goals in jeopardy. The includes systematic education and preventative absence of key players in particular is often measures to raise awareness among the difficult to compensate for. The reasons for rest professional squad and help them avoid such periods include personal match bans, injury, misconduct. excessive stress or a COVID-19 virus infection. The systematic implementation of DFL's hygiene Another risk newly classified as high priority is the concept minimises the risk that the professional lack of willingness to transfer. The contracts that squad and the coaching and support staff will players negotiate at Borussia Dortmund are contract the COVID-19 virus. Excessive stress may incredibly lucrative when looking at other arise more frequently going forward, particularly Bundesliga clubs. For players who, for whatever since the coming season will in all likelihood see reason, spend more time on the bench than they a tight schedule of fixtures due to the 2022 World want, this could nevertheless deter them from Cup in Qatar (to be held in the winter) and UEFA's accepting transfers. reform of the Champions League, which from the 2024/2025 season onwards will feature ten group The ongoing COVID-19 pandemic has caused matches instead of the previous six. We deliberately financial difficulties for many clubs in Germany and ensure that back-ups are available for every around the world. This could increasingly lead to position within the squad so that we can absorb situations in which other clubs are unwilling to meet the absence of any individual player. the salary expectations of players whom Borussia Dortmund intends to transfer, making it difficult for The world of sport has witnessed a number of Borussia Dortmund to find a suitable buyer. terrible accidents in recent years. The tragic loss of 70
MANAGEMENT REPORT Category 3 – macroeconomic risk different premises, and is regularly adjusted to Macroeconomic risk arises as a result of Borussia account for current conditions, so that any liquidity Dortmund's dependence on general economic and bottlenecks can be identified early and political developments. appropriate countermeasures designed to secure liquidity can be initiated. This includes the There are currently six high-priority risks that fall extension of the existing overdraft facility. under macroeconomic risks: Borussia Dortmund considers this confirmation that it made the right choice in the previous financial year The COVID-19 pandemic and the resulting restrictions to establish the outbreak of epidemics/pandemics on public life as well as the associated massive as a stand-alone and overarching individual risk so impact this has had on the global economy, including as to account for the consequences of the COVID-19 the football sector, is still being acutely felt in pandemic. Furthermore, this individual risk impacts Germany and throughout the world. Aside from the almost all other existing risks. health consequences, the COVID-19 crisis continues to particularly impact Borussia Dortmund's sales Borussia Dortmund has classified unfavourable categories. The functional health and safety protocol macroeconomic developments accompanied by ensured the continuation of match operations in the high unemployment and slow economic growth or 2020/2021 season and with that the generation of an economic downturn, as a further risk in this TV marketing income. However, the general ban on category. spectators in stadiums meant that income from The Hamburg Institute of International Economics match operations mostly dried up. The COVID-19 (HWWI) has updated its forecast for economic restrictions on hospitality services and match day development in Germany. Following another advertising also impacted advertising income. economic slowdown on the back of the second Conference, catering and miscellaneous income was lockdown imposed in the winter of 2020/2021, the also weighed down due to the lack of both public recovery interrupted in the autumn of 2020 now catering income on match days and events organised looks to be continuing thanks to progress in by BVB Event & Catering GmbH. The global economic vaccinations and the lifting of restrictions. After situation remains tense, and this could continue to economic output contracted by 4.8% in the previous impact the transfer market. While Borussia year, growth of 3% is expected for both 2021 and Dortmund cannot rule out that transfer proceeds for 2022. An improvement is also emerging on the players will continue to decline (temporarily) in labour market, initially driven by a reduction in coming transfer windows, it nevertheless still expects partial furloughs (Kurzarbeit). opportunities to obtain high transfer proceeds for players in individual cases. The risk of right-wing extremism is a societal risk The downturn in proceeds caused by the COVID-19 that continues to increase. Borussia Dortmund pandemic has impacted not only individual sales continues to stand firmly against right-wing categories but also the Group's liquidity. The extremism and discrimination. Borussia Dortmund financial and liquidity planning apparatus that has counters this risk through prevention efforts and been in place at Borussia Dortmund for many disciplinary action, acting in concert with a broad years considers a variety of scenarios and network of cooperation partners. By clearly 71
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund speaking out against racism and discrimination as Passing these costs on to the Bundesliga clubs well as by working to combat right-wing attitudes, would present an earnings and liquidity risk for anti-Semitism and hate speech and to ensure that those clubs, Borussia Dortmund included. the lessons of the past are never forgotten, Borussia Dortmund will continue to fulfil its social The categorisation of social media activities as a responsibility by ensuring that the atmosphere in high-priority risk reflects the fact that new and outside the stadium is welcoming, cosmopolitan technologies not only have potential for and diverse. development, but also harbour risk potential. Social media is no longer used solely for The increased willingness of certain individuals to communicating with fans and followers, but commit violence and defame and insult others at increasingly also serves as an advertising platform stadiums is a risk that will continue to require the for marketing and sponsoring-related activities. utmost attention. Fan violence continued to plague Borussia Dortmund has vastly expanded its digital football in the reporting period, even if the 2020/2021 presence, among other things due to the season was mostly played behind closed doors. restrictions placed on direct contact with fans as a Prevention efforts and security plans put in place in result of the ongoing COVID-19 pandemic. the previous season ensured that potentially violent In order to safeguard the Company's image and groups were identified in advance, helping to prevent prevent the unauthorised disclosure of internal altercations to the greatest extent possible. Borussia information, all Borussia Dortmund employees Dortmund will continue to counter this risk with must adhere to the Company's social media enhanced security checks, camera surveillance, guidelines. stadium bans and criminal complaints. Additional stadium safety measures will continue to include Category 4 – competitive risk specific structural changes to entrances going Competitive risk relates to factors stemming from forward. Furthermore, Borussia Dortmund and competition in the domestic and international other clubs from North Rhine-Westphalia signed up professional football business. to "Stadionallianz gegen Gewalt" in the reporting period, a joint initiative with the police to more This category includes seven high-priority risks: rapidly identify and isolate perpetrators, and bring them to justice. Interruptions to match operations can have immense economic ramifications because nearly In connection with the dispute about who should all of Borussia Dortmund's sales categories are cover the costs of providing security at home dependent on or influenced by match operations. matches, the clubs of the first and second The ongoing COVID-19 pandemic has underscored Bundesliga divisions voted on 3 December 2019 that how economically dependent the club is on a the costs incurred by the Bremen police should be trouble-free season. The 2020/2021 season was borne in full by SV Werder Bremen. The clubs also completed without major scheduling issues resolved that SV Werder Bremen could defer a thanks to the systematic implementation of DFL's partial amount of 50% until a final ruling on the legal health and safety protocol – even if the majority dispute was issued by the Federal Constitutional of matches were played behind closed doors. Court, and to reject a fund model of any kind. 72
MANAGEMENT REPORT The second risk classified as high-priority in this already been disciplined and banned from category is the change in income from TV international competitions for violating Financial marketing. After DFL Deutsche Fußball Liga's Fair Play rules. In the wake of the COVID-19 crisis, auctions for TV rights led to a steady rise in UEFA is currently consulting on potential reforms income from TV marketing in recent years, the to its Financial Fair Play guidelines, which will likely COVID-19 crisis meant that the auction for the be resolved at the end of 2021. 2021/2022 to 2024/2025 seasons did not bring as much income for the clubs of the first and As past experience has demonstrated, the risk of second Bundesliga divisions as in previous rights key players switching clubs can materialise at periods; in total, EUR 4.4 billion will be distributed any time at Borussia Dortmund. The departure of in the coming four years. Future instalments of key players who are part of the club's future plans TV marketing income to be paid by DFL Deutsche would not only weaken the team at certain Fußball Liga to the clubs will continue to depend positions, but also as a whole. Even if success on maintaining match operations. The functional rarely rests on the shoulders of any single player, health and safety protocol for the 2020/2021 the roster should be planned so that any season has shown that it is possible to see a unexpected departures do not leave holes that season through to a trouble-free conclusion would need to be filled at short notice with despite the COVID-19 pandemic. players of equal quality. In an attempt to mitigate the sporting consequences of key players According to UEFA, Financial Fair Play is about switching clubs, Borussia Dortmund plans its improving the overall financial health of European roster well in advance, including by binding club football. The regulations first entered into force players to long-term contracts, uses its high in 2011 and serve as a catalogue of measures for transfer proceeds to reinvest in the squad and clubs competing in UEFA's international club employs a wide network of scouts. competitions. Clubs in breach of the regulations face penalties up to and including bans. In practice, The further risk in this category is the risk of a Financial Fair Play governs the ratio of revenue to potential stadium catastrophe. Stadium catastrophes expenditures. The risk of failing to comply with the can include fire, stampedes, potential terrorist Financial Fair Play rules and potential exclusion attacks or other acts of violence. Going forward, from international competitions or potential the Company will continue to regularly assess the financial sanctions would have serious financial quality and reliability of security staff and consequences for Borussia Dortmund. The now very specifically train them in the prevention of lucrative distributions available from UEFA and the catastrophes. Structural improvements to SIGNAL international prestige derived from taking part in IDUNA PARK for the purposes of enhancing UEFA competitions underscore the importance of security, safeguarding and monitoring the access both qualifying and obtaining the requisite licences roads, and safeguarding the property during visits for international club competitions. To minimise this on non-match days are just some of the risk therefore, compliance with the relevant countermeasures currently being implemented by requirements and target/actual comparisons are the club's Security department to provide security constantly reviewed. Several European clubs have at the stadium. 73
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Borussia Dortmund uses the summer break each which is why sinkholes and similar subsidence year to invest in SIGNAL IDUNA PARK as well as cannot be ruled out. An additional expert opinion for construction work and refurbishments. The has been obtained, which states that there is stadium has been expanded three times since merely a risk of the subsoil subsiding, not of opening in 1974 with a capacity of 54,000. The collapse. This will likely result in lower costs being continual repair and maintenance work – the incurred in the course of the survey and paramount focus of which is always structural reinforcement, since it may be that geogrids will integrity and safety – ensures that the stadium no longer be necessary and fill dirt will instead be meets the latest standards in terms of safety, compressed into the ground to achieve the requisite security and comfort. Compared to many other stability. The construction work is already Bundesliga stadiums that were constructed for underway and will likely be completed in the the 2006 World Cup, SIGNAL IDUNA PARK is one summer of 2021. of the Bundesliga's oldest stadiums in use. Given that Borussia Dortmund regularly invests large Category 5 – liquidity risk sums in SIGNAL IDUNA PARK and in light of the Liquidity risks include all risks in connection with increasing requirements applicable to stadiums, cash flows and financial burdens. including with respect to spectator safety, the club has classified capital expenditures needed This category includes four high-priority risks: for SIGNAL IDUNA PARK as a high-priority risk. The ongoing COVID-19 pandemic and the The loss of significant financial backers and associated economic consequences mean that sponsors due to insolvency could also have a only essential investments are currently being material adverse effect on Borussia Dortmund's made in the stadium. liquidity in the future. Attention continues to be placed on the potential loss of significant financial The risk of consequential damage arising from backers and sponsors and the introduction of mining, which also affects SIGNAL IDUNA PARK, corresponding countermeasures precisely because represents another high-priority risk. Coal mining of the ongoing COVID-19 crisis and the associated has ceased in Germany. While the memories adverse economic consequences for the German remain, so do the pitfalls, because the effects of and global economy. Borussia Dortmund mining never fully disappear. Hardly any other continuously revises its longstanding accounts federal state is faced with as many sinkholes as receivable management system in line with the North Rhine-Westphalia. The state has some prevailing conditions and increasing globalisation. 60,000 abandoned mining shafts and tunnels. The The club also reviewed and implemented other risk exact number is not known because mining in the mitigation measures such as introducing upfront region dates back to the Middle Ages. Only half of payments or changing payment terms. Borussia all pits and tunnels have been recorded. Dortmund is also in close contact with its customers Borussia Dortmund uses the properties adjacent and partners and its sponsoring marketing firm to SIGNAL IDUNA PARK for car parks or to store SPORTFIVE Germany GmbH, and is maintaining a products and equipment needed for match close and trusting relationship with them. This is operations. The southwest container and logistics also evident from the individual solutions that area is located on land with uncertain topography, Borussia Dortmund has found with its partners to 74
MANAGEMENT REPORT compensate for cancelled (hospitality) services. The premises, and is regularly adjusted to account for majority of (hospitality) services that Borussia current conditions. The scenarios calculated Dortmund was unable to render due to the ongoing covered in particular different levels of success COVID-19 pandemic were compensated for by achieved by the team and various external means of other (advertising) services, meaning that conditions attributable to COVID-19 in order to Borussia Dortmund's partners have asserted identify any liquidity bottlenecks early and to initiate practically no compensation claims. appropriate countermeasures designed to secure The fact that new agreements have been entered liquidity. They included extending the existing EUR into with partners despite the ongoing pandemic 60,000 thousand overdraft facility by EUR 60,000 suggests that there will be no major decline in the thousand to EUR 120,000 thousand. willingness of potential sponsors to seek out new opportunities once the crisis is over. In order to keep the risk associated with the volume of player salaries as low as possible, the club Due to the ongoing COVID-19 crisis, the risk of bad budgets personnel expenses with transfer deals in debts due to insolvency remains classified as a mind at the beginning of each season. The primary high-priority risk. focus is on the fixed components of the players' The COVID-19 crisis has caused one of the worst remuneration, since these are independent of the economic downturns for Germany and the world team's performance during a given season. in the post-war period. The ongoing pandemic will Variable remuneration components are also continue to impact the solvency of companies and considered when planning the budget, but generally football clubs alike. Borussia Dortmund anticipates only apply once certain sporting objectives are that problems could arise with regard to transfer achieved that in turn generate additional income. receivables. The primary objective continues to be The personnel expenses incurred are continuously keeping bad debts to a minimum and to ensure that monitored, extrapolated on the basis of current the Company has the liquidity it needs at all times. circumstances, and reported to the management. That is why it is all the more important to follow through on the action already taken, such as The Group is not presently exposed to any conducting credit checks on foreign businesses or high-priority risks in the interest rate risk, credit changing the general contractual framework to risk, resources riskand ecological riskcategories. include high up-front payments. Dunning procedures are likewise particularly vital. Furthermore, additional action was taken to ensure liquidity and counter any potential bad debts. Borussia Dortmund places utmost importance on maintaining its liquidity and, after assessing its risks during the ongoing COVID-19 pandemic, therefore continues to classify the risk associated with this as high priority. The financial and liquidity planning apparatus that has been in place for many years considers a variety of scenarios and different 75
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund OPPORTUNITIES By once again directly qualifying for the UEFA a solid basis for planning and gives those in Champions League, the club again has the positions of responsibility the opportunity to keep opportunity to consolidate its standing as one of building on the strong and trusting relationships Europe's top teams and to once more share in the they already enjoy and to unlock the potential for profits distributed for participating in the lucrative improvement that is there to see. competition. The team coalesced and found its strength in the Borussia Dortmund's approach to its squad is one final third of the 2020/2021 season and delivered of continuity, but it also has an eye to creating new consistent and solid performances to qualify for momentum and structures in its personnel the UEFA Champions League and win the DFB Cup. choices. In December 2020, Borussia Dortmund The team has truly enormous potential, and the parted ways with Lucien Favre, its head coach of challenge now is to tap into this over the entire two-and-a-half years. His erstwhile assistant season. By signing Gregor Kobel, Borussia coach Edin Terzic then led the team to victory in Dortmund has gained a communicative and vocal the DFB Cup and qualification for the UEFA goalkeeper who never failed to put in a strong Champions League. Marco Rose from Bundesliga performance in the past Bundesliga season, rivals Borussia Mönchengladbach will take over whether in goal, in the penalty box or in passing as the new head coach at Borussia Dortmund from play. He will further stabilise the team's defence. the 2021/2022 season. Marco Rose is a team The healthy mix of grit, leadership and young player, and the club wants him to guide Borussia ambition in the squad as well as consistency in its Dortmund back to playing its trademark modern, management is expected to help the team unlock attacking and up-front style of football. its full potential and achieve the greatest possible Edin Terzic has extended his contract through to success on the pitch. 30 June 2025 and will be filling the newly created position of technical director. Going forward, he Borussia Dortmund has an excellent team, a fact will play a permanent part in planning the roster, that is not lost on other top European clubs. win over promising players for Borussia Accordingly, there is always the possibility of Dortmund, act as a go-between for the Youth lucrative transfers. Academy, support players on loan, and report directly to the sporting management, Michael Zorc Borussia Dortmund sees further potential in its and Sebastian Kehl. Borussia Dortmund looks youth setup, where it lays the foundation for its forward to the momentum this will create. sporting success. To this end, the club added new The contract with head of the professional squad offices for the sports management team at the Sebastian Kehl was extended early until 30 June Brackel training ground. This investment will help 2025. He will take over from Michael Zorc as to further consolidate all the areas under the sporting director from 1 July 2022. Borussia direction of the Sports department. Borussia Dortmund also extended the contract with its youth Dortmund hopes the direct proximity to the academy coordinator Lars Ricken early until 30 training ground will help it work with greater June 2025. This long-term focus at level of efficiency and purpose and further optimise its sporting management offers Borussia Dortmund pipeline of talented youngsters for the senior team. 76
MANAGEMENT REPORT For Borussia Dortmund, the potential return of at In the past season, Youssoufa Moukoko, Ansgar Knauff and Steffen Tigges, another three of the least some spectators to SIGNAL IDUNA PARK in club's youth standouts, made the jump to the the 2021/2022 season is a massive opportunity, senior side and helped the team with their youthful in particular to interact directly with fans. Since exuberance. Other talented youngsters are also personal contact has been severely restricted set to make the senior team. during the ongoing COVID-19 pandemic, communicating digitally with fans continues to be Borussia Dortmund maintains close and more important than ever. New digital formats longstanding partnerships with its sponsors. During were and will be created for this reason. This times of crises, this continuity was also a reflection increased focus on digital communications affords of the close and trusting relationships. This is also us the opportunity to strengthen the bonds our evident from the individual solutions that Borussia fans have with the club despite not being able to Dortmund has found with its partners to compensate attend matches, and to grow Borussia Dortmund's for cancelled (hospitality) services. The majority of fan base. This includes the 2021 Virtual Summer (hospitality) services that Borussia Dortmund was Tour, with Borussia Dortmund making virtual stops unable to render due to the ongoing COVID-19 in nine countries across three continents between pandemic were compensated for by means of other 10 and 18 July 2021 to bring the club even closer (advertising) services, meaning that Borussia to and connect with its international fan Dortmund's partners have asserted practically no communities and partners and give all fans (not compensation claims. These good relationships built just) from the nine participating countries the on trust and the solidarity displayed during crises chance to immerse themselves in the world of also provide planning security. Borussia Dortmund. Borussia Dortmund also believes it has good opportunities to adequately replace sponsoring agreements that are set to expire by leveraging its appeal to sign lucrative new contracts. OVERALL ASSESSMENT OF THE RISKS AND OPPORTUNITIES With regard to the risks discussed in this report Thanks to its risk management system, Borussia and the review of the overall risk position, no risks Dortmund is in a position to comply with the were identified in the financial year under review statutory provisions on control and transparency in that could lead to a permanent or material the Company. deterioration in the financial position or financial A review of the risk situation revealed that none of performance of either the Group or its individual the individual risks defined within the risk areas companies. jeopardise the continued existence of Borussia Dortmund. 77
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund REPORT ON EXPECTED DEVELOPMENTS EXPECTED DEVELOPMENT OF THE COMPANY Borussia Dortmund finished the 2020/2021 season As reigning DFB Cup champions, Borussia Dortmund in third place with 64 points, qualifying directly for the will face FC Bayern Munich in this year's DFL Super lucrative group stage of the UEFA Champions League Cup at SIGNAL IDUNA PARK on 17 August 2021. in the coming season. Borussia Dortmund has thus qualified for an international cup competition for the twelfth time in a row since the 2010/2011 season. EXPECTED GENERAL ECONOMIC ENVIRONMENT The expected general economic environment is spectators to return. This will take into account dominated by the ongoing COVID-19 pandemic. The infection rates, which must not exceed 35 cases per strains of the coronavirus already rampant, in 100,000 residents. At anything above this, a particular the delta variant, are hindering efforts maximum of 5,000 spectators will be permitted. to overcome the pandemic. Despite low infection Those who have not been vaccinated or have not rates, progress in vaccinating the population and recovered from COVID-19 must show a negative decisions to roll back restrictions, the pandemic test result. In addition, the health and safety remains ever-present in Germany and around the protocols and social distancing will remain in place. world. Professional football has been heavily Even if these new rules are an improvement on the impacted too, and must continue to play its part to previous season, the partial return of fans to the overcome the crisis. terraces is closely linked to low infection rates. Thus, although higher income is expected than in the DFL Deutsche Fußball Liga GmbH has published its previous year, it will still be a lot lower and plagued fixture calendar for the 2021/2022 season. The new by far more uncertainties than before the pandemic. Bundesliga season will begin in mid-August 2021, and Borussia Dortmund will make its début at home Commercially successful professional football to Eintracht Frankfurt. operations are no longer limited to just regional or national levels. The team's success in these Income from match operations are directly tied to competitions is very much a focus in all plans. allowing spectators to visit SIGNAL IDUNA PARK. Qualifying for the group stage of the UEFA At the beginning of July 2021, Germany's federal Champions League continues to place Borussia states decided to permit a partial return of fans to Dortmund in a better financial position. Playing and stadiums in time for the new season. The resolution, delivering positive performances in the competition which is initially in force until 11 September 2021, not only generates income, it can also widen the permits stadiums to operate at maximum 50% club's media and brand coverage, which promotes capacity, with the total number of spectators initially the club's interaction with existing fans and capped at 25,000. Approval from the competent encourages others to begin following Borussia authorities is required as a basic prerequisite for Dortmund. The club intends to promote these 78
MANAGEMENT REPORT particularly in Germany, has not lost any of its allure. effects with a progressive internationalisation strategy that is regularly tailored to current trends. Borussia Dortmund also maintains close and In light of this, Borussia Dortmund aims to further longstanding partnerships with its sponsors. expand and professionalise its digital presence. Borussia Dortmund remains just as appealing as Borussia Dortmund thereby responds to social ever. As such, Borussia Dortmund will also operate trends and to a large degree leverages the in a demanding market and competitive environment attractiveness of the Borussia Dortmund brand. in the coming season. The growing international awareness of the brand that this gives rise to allows the club to tap foreign Particular focus will be placed on income from TV markets. This includes the 2021 Virtual Summer marketing in connection with the expected general Tour, with Borussia Dortmund making virtual stops economic environment. in nine countries across three continents between 10 and 18 July 2021 to bring the club even closer DFL Deutsche Fußball Liga GmbH has informed the to and connect with its international fan clubs of the first and second Bundesliga divisions communities and partners and give all fans (not about the expected distribution volume for the just) from the nine participating countries the 2021/2022 season. The announced disbursements chance to immerse themselves in the world of of the TV funds will allow for a good degree of Borussia Dortmund. planning. However, these plans may change at any time due to the ongoing COVID-19 pandemic. The Since the 2020/2021 season, Borussia Dortmund amount and timing of the disbursements depends has had two different kit sponsors. The team in particular on partners making due contractual wears kits bearing the logo of Evonik Industries payments and the 2021/2022 season being seen AG in all international club competitions, through to a trouble-free conclusion. friendlies staged abroad and DFB Cup matches, while 1&1 Telecommunication SE is the kit Despite the massive impact of the COVID-19 sponsor for Bundesliga matches. This one- pandemic, DFL Deutsche Fußball Liga GmbH sold of-a-kind sponsorship model was developed as the German media rights for the 2021/2022 to part of the internationalisation strategy and 2024/2025 seasons for an average of promises further sales potential going forward, approximately EUR 1.1 billion per year, with the since it allows the club and its respective partners individual disbursements increasing from season to target specific markets. to season. This corresponds to total income of In the 2021/2022 season, Borussia Dortmund once EUR 4.4 billion, exceeding the billion-euro mark again marketed its virtual advertising boards. once more and continuing the high sales level SIGNAL IDUNA PARK's advertising boards can be seen in previous years. Sky Germany secured the digitally overlaid in the broadcast signal to target rights to all live broadcasts on Saturdays, while the respective TV audiences when broadcasting DAZN will broadcast matches on Fridays and matches abroad. For Borussia Dortmund's Sundays. Football will also return to free-to-air international partners in particular, this is an TV after a 17-year hiatus, with ProSieben/Sat1 attractive and increasingly popular way to reach acquiring the broadcasting rights to a total of nine their customers worldwide. live matches. Even though the agreement fell Despite the ongoing COVID-19 pandemic and the somewhat short of expectations with a decline in ensuing economic declines, professional football, volume of around 5%, in these uncertain times it 79
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund represents the best possible degree of stability income. Consequently, transfer deals are always and an excellent economic foundation for the assessed against the background of the current coming seasons. season. High transfer sums often go hand in hand with a drop in quality within the team, but it cannot The COVID-19 pandemic is also affecting international be ruled out that value-driven transfers will be TV marketing from UEFA competitions. To alleviate concluded contrary to the Company's sporting the financial impact of the pandemic on the clubs, the interests. Given Borussia Dortmund's sustained income shortfall will be spread over five seasons success, its players are increasingly piquing the (from the 2019/2020 to the 2023/2024 season), interest of other top clubs. which will stretch the adverse effects out over a longer period. In specific terms, UEFA will make the The COVID-19 pandemic continues to affect deductions before distributing funds to the clubs. transfers. Based on last year's summer transfer The planned distributions nevertheless remain window, it can be assumed that the economic highly attractive. uncertainty and decline in income experienced by clubs around the world will continue to temporarily Stadium marketing is subject to compliance with reduce the transfer fees received for players. The social distancing and health and safety protocols, summer transfer window is now back to normal but this does enable stadium tours to be offered. and will last from 1 July to 31 August 2021. External events can likewise be held in the Despite the expected potential losses and the hospitality areas, albeit with restricted guest uncertainty as the situation continues to unfold, the numbers. Under the appropriate conditions, football European leagues remain attractive for talented training courses can also be offered. The likely young players. Besides that, Borussia Dortmund restrictions on selling alcoholic beverages and the has an excellent team. An active transfer market limited stadium capacities at home matches will can be expected all the same in the summer of weigh on the profitability of public catering. 2021, with some very lucrative deals in the pipeline. This sales category therefore also remains A notable example is the transfer of Jadon Sancho affected, since it is dictated by political decisions to Manchester United in July 2021. and official stipulations. Transfer deals are an important part of Borussia Dortmund's business and, as in previous years, represent a significant source of income. However, in view of the developments in the economic environment, Borussia Dortmund on principle only takes transfer income into limited account in its planning. The transfer policy nevertheless presents significant opportunities to generate substantial 80
MANAGEMENT REPORT Overall assessment of expected performance The COVID-19 crisis continues to overshadow the economic planning for some time to come. economic activities of German companies, forcing Borussia Dortmund will persevere through these them to confront the major challenge of having to still difficult times thanks to the economically sound operate in a highly uncertain environment. Borussia foundation it has built up and the specific Dortmund also expects to face significant economic countermeasures it has taken. There is a high restrictions in the coming period. Even if infection forecasting risk stemming from the strong rates in Germany are currently at a stable low level dependence on political decisions and the further and progress is being made in the vaccination course of the COVID-19 pandemic. Thus, any campaign, there remains an ever-present risk that statements regarding the future performance of infections will flare up and tougher restrictions will the Company remain subject to a high degree of be imposed to control them. This will shape uncertainty. EXPECTED RESULTS OF OPERATIONS Expected earnings trend Despite the economic uncertainties and a more The ongoing COVID-19 pandemic continues to pose subdued transfer market, Borussia Dortmund major challenges for Germany and the world. The expects there to be some very lucrative transfer number one priority is containing the spread of the deals in the offing, setting up net transfer income COVID-19 virus in all facets of life. Professional as a significant earnings driver. football must also play its part in overcoming the The club traditionally pursues a more conservative crisis. Borussia Dortmund GmbH & Co. KGaA also approach when factoring success on the pitch and remains heavily affected. Therefore, the expectation any associated earnings contributions into the is of further severe adverse effects on the earnings forecast. trend in financial year 2021/2022. In light of the high degree of uncertainty related to The projection is that matches will be played to all sales categories, the management currently limited spectator numbers in the first half of the expects to generate a net loss of between EUR new season, with the second half seeing a return 14,000 thousand and EUR 19,000 thousand in the to full capacity. As a result of the measures to coming 2021/2022 financial year. contain the pandemic, only a limited number of tickets will initially be made available per match, In this planning scenario, the result from operating which will continue to weigh heavily on income from activities (EBIT) will exceed the forecast net loss for match operations and public catering. the year by the financial result and tax expense of 81
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund approximately EUR 2,000 thousand. The operating Expected trend for significant result (EBITDA) would be around EUR 107,000 operating expenses thousand higher than the result from operating Cost management continues to be Borussia activities (EBIT) due to depreciation and Dortmund's highest priority. Operating cost-effectively amortisation and would probably amount to makes a material contribution to earnings, and between EUR 86,000 thousand and EUR 91,000 Borussia Dortmund is unwavering in its efforts to thousand. achieve further optimisation. Personnel expenses account for approximately half Expected sales trend of all operating expenditure. Portions of these In the past financial year, Borussia Dortmund personnel expenses are also dependent upon the generated sales of EUR 323,497 thousand. Sales club's sporting success, because the professional are expected to increase to approximately EUR squad is compensated on the basis of its 484,000 thousand in the coming reporting period, performance, meaning that these expenditures are due primarily to growing transfer income. However, always commensurate with the club's success, which the measures to contain the ongoing COVID-19 itself is a source of income. pandemic will continue to impact nearly all of The other operating expenses are also partly dependent Borussia Dortmund GmbH & Co. KGaA's sales on the number of matches and the club's success on categories. the pitch. Any efforts at cost optimisation aside, there may therefore be an increase in operating expenses that goes hand-in-hand with a material increase in income and corresponding contribution to earnings. EXPECTED DIVIDEND In light of the fact that the Company reports a net loss to propose to the Annual General Meeting any dividend for the financial year, the management does not intend distribution for financial year 2020/2021. EXPECTED FINANCIAL POSITION Capital expenditure and Expected liquidity trend financial planning Due to the assumptions made, Borussia Dortmund The highest priorities for developing the club's core expects cash flows from operating activities in business will be making the club more competitive financial year 2021/2022 to amount to approximately and improving its infrastructure. EUR 58,000 thousand. This figure is subject to change Due to the adverse economic consequences of the due in particular to transfer deals or if actual events ongoing COVID-19 pandemic, Borussia Dortmund differ from the forward-looking statements in the is currently pursuing a rather passive transfer forecast concerning the club's sporting success or policy and is focusing on sensible ways to reinvest on account of the effects of the COVID-19 pandemic. transfer fees already received. Even non-essential Free cash flow is expected to amount to investments in SIGNAL IDUNA PARK are being approximately EUR -31,000 thousand. postponed until further notice. In order to mitigate and avoid financial risk, Borussia Dortmund in principle pursues a conservative and extremely prudent capital expenditure strategy and will not count on any uncertain sporting successes. 82
MANAGEMENT REPORT OVERALL ASSESSMENT OF EXPECTED PERFORMANCE The consequences of the COVID-19 pandemic will despite the net loss for the year, and the continue to have adverse effects in the coming Company's long-term focus, Borussia Dortmund 2021/2022 financial year. Due to the positive considers itself prepared to handle the still results of operations in the financial years prior to uncertain economic situation. The management is the COVID-19 pandemic, stable equity of EUR continuously reassessing the situation as it 257,858 thousand (which corresponds to an equity pertains to the COVID-19 pandemic. ratio of approximately 56.83%) as at 30 June 2021 OTHER DISCLOSURES The notes contain disclosures pursuant to § 160 (1) no. 2 AktG. REPORT IN ACCORDANCE WITH § 289A (1) HGB IN THE VERSION PURSUANT TO ARTICLE 83 (1) SENTENCE 2 EGHGB The following information has been provided by the 1) Ballspielverein Borussia 09 e.V. Dortmund, Company in response to the requirements of § 289 Dortmund, Germany: 14.88% of the voting a (1) sentence 1 nos. 1 to 9 HGB: rights (of which 5.53% held directly and 9.35% held indirectly by including the voting 1. As at 30 June 2021, the share capital of Borussia rights of Bernd Geske, Germany, pursuant Dortmund GmbH & Co. KGaA amounts to EUR to § 22 (2) and henceforth § 34 (2) WpHG) 92,000,000.00 and is divided into 92,000,000 2) Bernd Geske, Meerbusch, Germany: 14.88% no-par value ordinary bearer shares. All of of the voting rights (of which 9.35% held the shares have been admitted to trading on directly and 5.53% held indirectly by the Regulated Market (Prime Standard) of including the voting rights of Ballspielverein the Frankfurt Stock Exchange and to the Borussia 09 e.V. Dortmund, Dortmund, over-the-counter markets (Open Market) in Germany, pursuant to § 34 (2) WpHG) Berlin, Bremen, Stuttgart, Munich, Hamburg and Düsseldorf. Each no-par value share entitles the According to the information available, the holder to one vote at the Annual General Meeting. inclusion of the voting rights in either case The Company has only one class of shares, and is based on a shareholders' agreement all shares carry the same rights and obligations. concluded between Ballspielverein Borussia All other rights and responsibilities attaching to 09 e.V. Dortmund and Bernd Geske currently the Company's shares are determined in for a term until 30 June 2022 (after the original accordance with the German Stock Corporation agreement ending on 30 June 2017 was Act (Aktiengesetz, "AktG"). extended). The material subject matter of said agreement is the stipulation binding the 2. Restrictions affecting the voting rights or transfer parties to exercise their voting rights in favour of the shares, and of Ballspielverein Borussia 09 e.V. Dortmund with regard to Bernd Geske's shares in 3. Interests in the share capital of Borussia Borussia Dortmund GmbH & Co. KGaA, and Dortmund GmbH & Co. KGaA exceeding 10% of that Bernd Geske and Ballspielverein Borussia the voting rights as at 30 June 2021: 09 e.V. Dortmund mutually agree to inform 83
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund one another and vote on any changes to their preferred shares (§ 182 (1) sentence 2 AktG), respective shareholdings in Borussia capital increases involving the disapplication of Dortmund GmbH & Co. KGaA, especially pre-emptive subscription rights (§ 186 (3) AktG), pertaining to the transfer of shares. the creation of conditional capital (§ 193 (1) AktG), the creation of authorised capital (§ 202 (2) AktG) 4. There are no shares with special rights – where appropriate with authorisation to disapply conferring powers of control. pre-emptive subscription rights (§ 203 (2) sentence 2 in conjunction with § 186 (4) AktG) –, 5. There is no control of voting rights in cases in the ordinary or simplified reduction of share which employees are shareholders. capital (§ 222 (1) sentence 2 and § 229 (3) AktG) or a change of legal form (§ 233 (2) and 6. Because of its legal form as a partnership limited § 240 (1) of the German Reorganisation and by shares, Borussia Dortmund GmbH & Co. KGaA Transformation Act [Umwandlungsgesetz, does not have a management board. Instead, "UmwG"]). In addition, capital increases, other management and representation of the Company changes to the Articles of Association and other is the responsibility of the general partner. The decisions of a fundamental nature may only be provisions of Article 6 No. 1 of the Articles of resolved with the approval of the general partner Association stipulate that Borussia Dortmund in accordance with § 285 (2) sentence 1 of the Geschäftsführungs-GmbH, with registered offices AktG. The Supervisory Board is authorised in in Dortmund, is to act as such an executive body accordance with Article 12 No. 5 of the Articles of on a permanent basis and not for a limited period Association to resolve changes to the Articles of of time by virtue of its status as a shareholder. The Association which relate only to the wording appointment and removal of managing directors thereof, in particular in connection with the of Borussia Dortmund Geschäftsführungs-GmbH amount of capital increases from authorised and is governed by § 8 no. 6 of its shareholders' conditional capital. agreement and is the responsibility of the Executive Committee of its Advisory Board, and 7. By virtue of the resolution by the Annual General therefore not of the Supervisory Board of Borussia Meeting on 19 November 2020, the general Dortmund GmbH & Co. KGaA. partner is authorised until 18 November 2025, In principle, changes may be made to the Articles with the approval of the Supervisory Board, to of Association of Borussia Dortmund GmbH & Co. increase the share capital by a maximum of EUR KGaA only by a resolution of its Annual General 18,400,000 in total by issuing new no-par value Meeting, which, in accordance with § 133 (1) of ordinary bearer shares against cash contributions the AktG, must be passed by a simple majority of on one or more occasions (Authorised Capital votes and also, in accordance with Article 15 No. 2020). The previous Authorised Capital 2014 of 3 of the Articles of Association of the Company in EUR 23,000,000 had been subject to an conjunction with § 179 (1) and (2) of the AktG, by authorisation valid until 23 November 2019. This a simple majority of the capital represented on was not utilised and as such the authorised capital the date of the resolution, except to the extent that expired on 23 November 2019. mandatory statutory provisions or the Articles of Association stipulate otherwise. A mandatory 8. The Company is not a party to any material provision of statute requires that a resolution of agreements which are conditional on a change the Annual General Meeting be passed by a of control following a takeover bid for the issued majority of three-quarters of the share capital shares of Borussia Dortmund GmbH & Co. KGaA. represented on the date of the resolution in the event of changes to the Articles of Association 9. The Company is not a party to any compensation relating to the object of the Company (§ 179 (2) agreements that would apply in the event of a sentence 2 AktG), the issuance of non-voting takeover bid. 84
MANAGEMENT REPORT STATEMENT BY THE GENERAL PARTNER ON RELATIONS WITH AFFILIATED COMPANIES The Dependent Company Report prepared by "Based on the circumstances known to us at the time Borussia Dortmund GmbH & Co. KGaA pursuant the transactions were entered into, the Company to § 312 AktG sets out the relations with received appropriate consideration for each of the Ballspielverein Borussia 09 e.V. Dortmund as the transactions set out in the report on relations with controlling entity and its affiliated companies. The affiliated companies in the financial year. In all other general partner – represented by its Managing cases, the Company has been compensated for any Directors – has issued the following concluding disadvantages having arisen. No other measures declaration: within the meaning of § 312 (1) of the AktG were either undertaken or omitted during the financial year." DISCLAIMER This management report contains forward-looking uncertainties. Actual results may differ from the statements. Such statements are based on current statements made in this report. estimates and are by nature subject to risks and Dortmund, 9 August 2021 Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien Borussia Dortmund Geschäftsführungs-GmbH Hans-Joachim Watzke Thomas Treß Carsten Cramer Managing Director (Chairman) Managing Director Managing Director 85
TEMENTS A ANNUAL FINANCIAL ST sia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Borus 86
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund ANNUAL FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 BALANCE SHEET of Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund EUR '000 30/06/2021 30/06/2020 ASSETS A. FIXED ASSETS I. Intangible fixed assets 1. Purchased concessions, industrial and similar rights and assets, and licences in such rights and assets 203,935 248,880 2. Prepayments 68 68 204,003 248,948 II. Tangible fixed assets 1. Land, land rights and buildings including buildings on third-party land 167,784 172,481 2. Other equipment, operating and office equipment 14,682 16,336 3. Prepayments and assets under construction 259 1,952 182,725 190,769 III. Long-term financial assets 1. Shares in affiliated companies 12,052 11,621 2. Equity investments 96 96 3. Other loans 27 32 12,175 11,749 398,903 451,466 B. CURRENT ASSETS I. Inventories Merchandise 67 46 II. Receivables and other assets 1. Trade receivables 32,740 45,563 2. Receivables from affiliated companies 1,570 1,511 3. Other assets 2,303 1,516 36,613 48,590 III. Cash-in-hand, bank balances 3,466 3,157 40,146 51,793 C. PREPAID EXPENSES 14,696 15,509 453,745 518,768 88
ANNUAL FINANCIAL STATEMENTS for the financial year from 1 July 2020 to 30 June 2021 EUR '000 30/06/2021 30/06/2020 EQUITY AND LIABILITIES A. EQUITY I. Subscribed capital 92,000 92,000 less nominal value of treasury shares -19 -19 Issued capital 91,981 91,981 II. Capital reserves 144,337 144,337 III. Revenue reserves 1. Reserve for treasury shares 19 19 2. Other revenue reserves 147,662 147,662 147,681 147,681 IV. Net loss for the year / net accumulated losses -126,141 -49,662 257,858 334,337 B. PROVISIONS 1. Provisions for taxes 36 36 2. Other provisions 10,265 8,150 10,301 8,186 C. LIABILITIES 1. Liabilities to banks 58,792 8,031 2. Trade payables 97,864 135,122 3. Liabilities to affiliated companies 7,367 4,719 4. Other liabilities 17,113 24,675 of which from taxes: EUR 6,898 thousand (previous year: EUR 9,870 thousand) of which in relation to social security: EUR 38 thousand (previous year: EUR 35 thousand) 181,136 172,547 D. DEFERRED INCOME 4,450 3,698 453,745 518,768 89
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund INCOME STATEMENT of Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund EUR '000 01/07/2020 – 01/07/2019 – 30/06/2021 30/06/2020 1. Sales 323,497 442,126 2. Other own work capitalised 0 37 3. Other operating income 7,327 9,098 330,824 451,261 4. Personnel expenses a) Wages and salaries -200,010 -196,889 b) Social security, post-employment and other employee benefit -5,594 -6,634 costs of which for post-employment: EUR 226 thousand (previous year: EUR 285 thousand) -205,604 -203,523 5. Amortisation and write-downs of intangible fixed assets and depreciation and write-downs of tangible fixed assets -110,137 -105,547 6. Other operating expenses -91,663 -193,474 7. Income from profit and loss transfer agreements 1,007 4,669 - all of which from affiliated companies - 8. Expenses from profit and loss transfer agreements -748 0 - all of which from affiliated companies - 9. Other interest and similar income 121 180 of which from compounding: EUR 120 thousand (previous year: EUR 180 thousand) 10. Interest and similar expenses -642 -2,934 of which from discounting: EUR 40 thousand (previous year: EUR 154 thousand) 11. Earnings before taxes -76,842 -49,368 12. Taxes on income 342 -50 13. Earnings after taxes -76,500 -49,418 14. Other taxes 21 -244 15. Net loss for the year -76,479 -49,662 16. Loss/profit carried forward -49,662 20,325 17. Transfer to other revenue reserves 0 -20,325 18. Net accumulated losses -126,141 -49,662 90
ANNUAL FINANCIAL STATEMENTS for the financial year from 1 July 2020 to 30 June 2021 NOTES Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund for the financial year from 1 July 2020 to 30 June 2021 (hereinafter "Borussia Dortmund" or "Borussia Dortmund GmbH & Co. KGaA") GENERAL DISCLOSURES TO THE ANNUAL FINANCIAL STATEMENTS The annual financial statements of Borussia vertical format using the nature of expense method Dortmund GmbH & Co. KGaA for the financial year in accordance with § 275 HGB. from 1 July 2020 to 30 June 2021 have been In some instances, the additional information to be prepared in accordance with the requirements of provided in accordance with the statutory the German Commercial Code (Handelsgesetzbuch, requirements is presented in the notes for reasons "HGB") and the particular accounting requirements of clarity and accessibility. of the German Stock Corporation Act (Aktiengesetz, The annual financial statements are presented in "AktG"). Borussia Dortmund GmbH & Co. KGaA has thousands of euros. its registered office at Rheinlanddamm 207 – 209, 44137 Dortmund, Germany, and is listed in the As a result of the fact that Ballspielverein Borussia commercial register of the Local Court (Amtsgericht) 09 e.V. Dortmund (hereinafter "BV. Borussia 09 e.V. of Dortmund under the number HRB 14217. There Dortmund") holds 100% of the shares in Borussia is an additional obligation in accordance with § 315e Dortmund Geschäftsführungs-GmbH and is therefore (1) HGB to prepare consolidated financial statements regarded indirectly as a controlling company, applying international financial reporting standards Borussia Dortmund GmbH & Co. KGaA qualifies as a (IFRS) as adopted by the EU. dependent company within the meaning of § 17 AktG and accordingly is required to prepare a Dependent The balance sheet classifications comply with the Company Report in accordance with § 312 AktG. This classification format under commercial law in report must also contain the statutory concluding accordance with § 266 HGB, while the income statement required in accordance with § 312 AktG statement has in principle been prepared in the which must be included in the management report. ACCOUNTING POLICIES Fixed assets Intangible fixed assets are measured at cost less Tangible fixed assets are measured at cost less amortisation based on their expected useful lives accumulated depreciation. Depreciation and or at the lower fair value. Player registrations amortisation are based on the economic useful reported in these financial statements are generally lives of assets. Items with a value between EUR measured at cost, taking into account the decisions 150.00 to EUR 1,000.00 were recognised as an of the Federal Fiscal Court (Bundesfinanzhof, "BFH") omnibus item and will be written down over a of 26 August 1992 (I R 24/91) and of 14 December period of five years. 2011 (I R 108/10), the FIFA regulations contained in FIFA circular no. 769 of 24 August 2001, which Long-term financial assets were measured at cost came into force on 21 September 2001, and DFL or the lower fair value in case of permanent circular no. 52 of 20 March 2015, and are amortised impairment; they are not subject to amortisation. on a straight-line basis in accordance with the term of the individual contracts for professional players. Write-downs may arise for assets measured at their lower fair value. 91
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Inventories Deferred taxes Inventories are measured at cost less any Deferred tax assets and liabilities resulting from discounts, subject to the strict lower of cost or differences in the carrying amounts in the financial market principle. accounts and in the tax accounts are netted against each other if certain conditions are met. Irrespective Receivables and other assets of their date of realisation, deferred tax assets were Receivables and other assets are measured at their recognised on loss carryforwards in the amount of nominal amounts. A general valuation allowance is the excess deferred tax liabilities. As in the previous made for the overall credit and interest-rate risk year, deferred taxes are measured using the while separate allowances are recognised for average tax rate of 32.81%. identifiable individual risks. Because transfer receivables must be measured in full on an Deferred income item-by-item basis, general valuation allowances Deferred income is income that was received prior are not recognised for them. to the reporting date but that is not earned until after the reporting date. The amounts are reversed Cash-in-hand and bank balances rateably over the periods to which they relate. Cash-in-hand and bank balances are recognised at their nominal amounts. Foreign currency translation Assets and liabilities denominated in foreign Prepaid expenses currency with a residual term of less than one year Prepaid expenses are future expenses that have are translated at the mean spot rate on the balance been paid prior to the reporting date. These sheet date. primarily relate to prepayments for personnel expenses in connection with contract extensions, and to insurance premiums. The amounts are reversed rateably over the terms/lives of the individual items. Provisions Provisions are recognised for all identifiable uncertain liabilities. They are carried at the settlement amounts deemed necessary as dictated by prudent business judgement. Liabilities Liabilities are recognised at the settlement amount, while foreign-denominated liabilities are accounted for at the hedged exchange rate. 92
ANNUAL FINANCIAL STATEMENTS for the financial year from 1 July 2020 to 30 June 2021 NOTES TO THE BALANCE SHEET Fixed assets As at the balance sheet date, Borussia Dortmund's fixed assets break down as follows: EUR '000 30/06/2021 30/06/2020 Intangible fixed assets 204,003 248,948 Tangible fixed assets 182,725 190,769 Long-term financial assets 12,175 11,749 398,903 451,466 Intangible fixed assets Additions to tangible fixed assets amounted to Intangible fixed assets amounted to EUR 204,003 EUR 2,922 thousand in the financial year, EUR thousand. These consist of purchased player 2,987 thousand less than capital expenditures as registrations (EUR 203,067 thousand; previous at 30 June 2020. Due to the ongoing COVID-19 year: EUR 247,789 thousand), as well as trademark pandemic, investments were made primarily in rights, computer software and prepayments. The the Brackel training ground. Capital expenditures additions recognised in financial year 2020/2021 there amounted to EUR 2,170 thousand. Both the (EUR 58,738 thousand) related in full to player power plant and the sprinting hill were completed registrations. this year. These mainly resulted from the new signings Jude Bellingham and Thomas Meunier as well as the Long-term financial assets trainer Marco Rose and performance-based Long-term financial assets include the 100% subsequent costs. shareholdings in BVB Stadionmanagement GmbH, This was partly offset by amortisation and BVB Merchandising GmbH, BVB Event & Catering write-downs of EUR 99,608 thousand in the GmbH, besttravel dortmund GmbH, BVB reporting period. This included EUR 1,591 Fußballakademie GmbH (newly formed in June thousand in write-downs of assets to fair value. 2020) and BVB Asia Pacific Pte. Ltd., as well as the Due to transfer deals, the carrying amounts for the 33.33% shareholding in Orthomed Medizinisches players Mario Götze, André Schürrle, Ömer Toprak, Leistungs- und Rehabilitationszentrum GmbH. Dženis Burnić and Łukasz Piszczek were Please refer to the list of shareholdings for more derecognised, as was the carrying amount for information. trainer Lucien Favre due to the dissolution of his Long-term financial assets also include loans to contract. employees. The Company has entered into a profit and loss Tangible fixed assets transfer agreement with its subsidiaries BVB Tangible fixed assets amounted to EUR 182,725 Merchandising GmbH, BVB Stadionmanagement thousand as at 30 June 2021. That figure included GmbH, BVB Event & Catering GmbH and besttravel land and buildings amounting to EUR 167,784 dortmund GmbH. thousand, of which EUR 124,104 thousand was attributable to the stadium building. The development of gross fixed assets and of Tangible fixed assets also included EUR 7,505 accumulated depreciation and amortisation for the thousand in fixtures, operating and office individual items of fixed assets are shown in the equipment related to SIGNAL IDUNA PARK. following analysis pursuant to § 284 (3) HGB: 93
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund FIXED ASSETS of Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund EUR '000 Change in cost As at Additions Reclassification Disposals As at 30/06/2020 30/06/2021 I. Immaterielle Vermögensgegenstände 1. Concessions, industrial and similar rights and assets, and licences in such rights and assets 472,653 58,738 0 83,459 447,932 2. Prepayments 68 0 0 0 68 472,721 58,738 0 83,459 448,000 II. Tangible fixed assets 1. Land, land rights and buildings including buildings on third-party land 222,232 165 1,857 0 224,254 2. Other equipment, operating and office equipment 48,228 1,310 1,283 858 49,963 3. Prepayments and assets under construction 1,952 1,447 -3,140 0 259 272,412 2,922 0 858 274,476 III. Long-term financial assets 1. Shares in affiliated companies 11,621 431 0 0 12,052 2. Equity investments 96 0 0 0 96 3. Other loans 32 0 0 5 27 11,749 431 0 5 12,175 756,882 62,091 0 84,322 734,651 94
ANNUAL FINANCIAL STATEMENTS for the financial year from 1 July 2020 to 30 June 2021 Change in depreciation, amortisation and write-downs Carrying amounts As at Additions Write-downs Disposals As at As at As at 30/06/2020 30/06/2021 30/06/2021 30/06/2020 223,773 98,017 1,591 79,384 243,997 203,935 248,880 0 0 0 0 0 68 68 223,773 98,017 1,591 79,384 243,997 204,003 248,948 49,751 6,719 0 0 56,470 167,784 172,481 31,892 3,810 0 421 35,281 14,682 16,336 0 0 0 0 0 259 1,952 81,643 10,529 0 421 91,751 182,725 190,769 0 0 0 0 0 12,052 11,621 0 0 0 0 0 96 96 0 0 0 0 0 27 32 0 0 0 0 0 12,175 11,749 305,416 108,546 1,591 79,805 335,748 398,903 451,466 95
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Current assets Current assets are made up as follows: EUR '000 30/06/2021 30/06/2020 Inventories 67 46 Trade receivables 32,740 45,563 Receivables from affiliated companies 1,570 1,511 Other assets 2,303 1,516 Cash-in-hand, bank balances 3,466 3,157 40,146 51,793 Inventories represent the material value of decorative Trade receivables with a term of more than one year shares in the form of printed physical share amounted to EUR 8,857 thousand (previous year: EUR certificates. 12,093 thousand). The other assets mainly include insurance Trade receivables includes transfer receivables reimbursement claims. amounting to EUR 18,584 thousand (previous year: No bank balances have been pledged as security EUR 32,631 thousand). for loans. Prepaid expenses Prepaid expenses amounted to EUR 14,696 resulting from contract extensions amounting to thousand (previous year: EUR 15,509 thousand) and EUR 9,879 thousand and services amounting to EUR consisted primarily of prepaid personnel expenses 4,285 thousand. Equity EUR '000 30/06/2021 30/06/2020 Issued capital 91,981 91,981 Capital reserves 144,337 144,337 Revenue reserves 147,681 147,681 Net accumulated losses -126,141 -49,662 257,858 334,337 The Company's subscribed capital amounts to EUR Pursuant to a resolution by the Annual General 92,000 thousand and is divided into 92,000,000 no-par Meeting on 16 November 2004, the Company was value shares, each representing a notional share in authorised to acquire own shares amounting to 10% the share capital of EUR 1.00, less the notional value of the share capital on or before 30 April 2006. The of treasury shares of EUR 19 thousand. Equity Company was also authorised to sell its treasury contains a presentation of treasury shares in which shares either on or off the stock market. Off-market the nominal amount of the treasury shares is sales are permitted, among other purposes, for the deducted from equity under subscribed capital on the sale of shares in the form of printed physical share face of the balance sheet. Furthermore, a reserve for certificates which are freely transferable and treasury shares in the same amount is also presented. tradable. In such cases, shareholders' subscription 96
ANNUAL FINANCIAL STATEMENTS for the financial year from 1 July 2020 to 30 June 2021 rights are excluded in accordance with § 71 (1) No.8 reported separately under other operating income. AktG. In the period between the date of admission At the balance sheet date, the Company's holding of the Company's shares to trading (31 October of its own securities consisted of 18,900 no-par 2000) and the end of the reporting period (30 June value shares; no shares were disposed of during 2021), the Company acquired a total of 34,000 the reporting period. no-par value shares and sold 15,100 no-par value shares off-market in the form of printed physical Further disclosures required in accordance with share certificates. The gain on disposal has been §160 AktG are given in the following overview: Transactions in Total own/ Total Share in own/treasury treasury share capital share capital Selling price shares shares EUR in % EUR 07/2020 – 12/2020 0 0.00 As at 31/12/2020 18,900 18,900.00 0.021 01/2021 – 06/2021 0 0.00 As at 30/06/2021 18,900 18,900.00 0.021 By virtue of a resolution by the Annual General increase the share capital by a maximum of Meeting on 19 November 2020, the Company was EUR18,400,000.00 in total by issuing new no-par authorised until 18 November 2025, subject to the value ordinary bearer shares against cash renewed consent of the Supervisory Board, to contributions on one occasion. 97
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund The annual financial statements for the financial reported in the Company's annual financial year from 1 July 2019 to 30 June 2020 were adopted statements for the 2019/2020 financial year was at the Annual General Meeting on 19 November carried forward to new account in financial year 2020. The net loss for the year of EUR 49,662,283.90 2020/2021. Changes in equity were as follows: Changes in equity Additions/ Net loss EUR '000 30/06/2020 Withdrawals Dividend for the year 30/06/2021 Issued capital 91,981 0 0 0 91,981 Capital reserves 144,337 0 0 0 144,337 Revenue reserves 147,681 0 0 0 147,681 Net accumulated losses -49,662 0 0 -76,479 -126,141 334,337 0 0 -76,479 257,858 Provisions EUR '000 30/06/2021 30/06/2020 Provisions for taxes 36 36 Other provisions 10,265 8,150 10,301 8,186 Tax provisions amounted to EUR 36 thousand and obligations (EUR 5,914 thousand) and provisions for other provisions primarily include staff-related outstanding invoices (EUR 3,030 thousand). 98
ANNUAL FINANCIAL STATEMENTS for the financial year from 1 July 2020 to 30 June 2021 Liabilities The maturities and security granted in respect of liabilities reported at 30 June 2021 are shown in the following overview: of which with a residual term of Total less than 1 1 – 5 more than EUR '000 30/06/2021 1 year years 5 years Liabilities to banks 58,792 58,792 0 0 Trade payables 97,864 61,894 35,970 0 Liabilities to affiliated companies 7,367 7,367 0 0 Other liabilities 17,113 17,113 0 0 of which from taxes EUR 6,898 thousand (previous year: EUR 9,870 thousand) of which social security EUR 38 thousand (previous year: EUR 35 thousand) 181,136 145,166 35,970 0 of which with a residual term of Total less than 1 1 – 5 more than EUR '000 30/06/2020 1 year years 5 years Liabilities to banks 8,031 8,031 0 0 Trade payables 135,122 65,495 69,627 0 Liabilities to affiliated companies 4,719 4,719 0 0 Other liabilities 24,675 24,675 0 0 of which from taxes EUR 9,870 thousand (previous year: EUR 7,973 thousand) of which social security EUR 35 thousand (previous year: EUR 36 thousand) 172,547 102,920 69,627 0 Liabilities to banks of EUR 58,792 thousand were residual term of more than one year amounted to reported at the balance sheet date. The full EUR 35,970 thousand (previous year: EUR 69,627 potential overdraft facility is secured against thousand). sponsorship income of EUR 18,465 thousand as Other liabilities consisted mainly of the residual well as a EUR 60,000 thousand registered land credits for prepayments on season tickets for the charge in relation to the stadium. 2019/2020 season, wage and value added tax not As at 30 June 2021, trade payables amounted to yet due and staff-related liabilities not yet due. EUR 97,864 thousand, of which EUR 87,683 They also include liabilities to the general partner thousand (previous year: EUR 120,287 thousand) amounting to EUR 2,132 thousand (previous year: related to transfer deals. Trade payables with a EUR 1,937 thousand). 99
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Deferred income This items primarily includes proceeds from ongoing COVID-19 pandemic, the services under sponsoring agreements relating to the 2021/2022 sponsorship agreements not rendered in the season. The amounts are reversed rateably over 2019/2020 and 2020/2021 seasons were carried the periods to which they relate. Because of the over into subsequent seasons as compensation. Other financial obligations As at the balance sheet date, there were financial obligations including rental, leasing, hereditary lease, licensing and loss assumption obligations resulting from inter-company agreements. The classification by maturity is shown in the following table: of which with a residual term of Total less than 1 - 5 more than EUR '000 30/06/2021 1 year years 5 years Marketing fees 38,700 7,259 31,441 0 Rental and leasing 11,489 3,376 5,184 2,929 Other financial obligations 7,213 1,762 5,167 284 Purchase commitments 16,000 5,500 10,500 0 73,402 17,897 52,292 3,213 Furthermore, there are contingent liabilities from In addition, a total of EUR 33,846 thousand in guarantees related to BVB Merchandising GmbH variable payment obligations under existing (EUR 288 thousand) and to besttravel dortmund agreements with conditions precedent were GmbH (EUR 179 thousand). Based on past reported as at 30 June 2021, of which EUR 18,400 experience, it is unlikely that claims on these thousand had a residual term of less than one year. guarantees will be asserted. NOTES TO THE INCOME STATEMENT Sales EUR '000 2020/2021 2019/2020 Match operations 554 32,510 Advertising 106,609 98,038 TV Marketing 186,655 169,836 Transfer deals 23,148 123,732 Conference, catering, miscellaneous 6,531 18,010 323,497 442,126 100
ANNUAL FINANCIAL STATEMENTS for the financial year from 1 July 2020 to 30 June 2021 Borussia Dortmund's sales declined by EUR 118,629 thousand year on year to EUR 186,655 thousand. thousand to EUR 323,497 thousand in the 2020/2021 TV marketing income from domestic cup and financial year and break down as follows: international competitions rose. Domestic TV marketing income remained at virtually the same Income from match operations decreased by EUR level as in the previous year. 31,956 thousand to EUR 554 thousand in financial Income from domestic TV marketing amounted to year 2020/2021. Due to the ongoing COVID-19 EUR 97,826 thousand, down EUR 139 thousand pandemic, only the three home matches against against the prior-year reporting period. Borussia Mönchengladbach, SC Freiburg and FC Schalke 04 were open to a limited number of Income from international TV marketing amounted spectators. All other matches in the three to EUR 78,698 thousand in the financial year (previous competitions were held behind closed doors. In the year: EUR 67,420 thousand). The EUR 11,278 same period of the previous year, twelve Bundesliga thousand increase resulted from the group stage, matches, one DFB Cup match and four UEFA which Borussia Dortmund finished with four wins Champions League matches had been played before and one draw, as well as from qualifying for the UEFA a live audience at SIGNAL IDUNA PARK prior to the Champions League quarter-final in financial year suspension of match operations in March 2020. 2020/2021. In the previous year, Borussia Dortmund was knocked out in the round of 16. Despite the restrictions on hospitality services and match day advertising due to the COVID-19 Unlike in the previous year, Borussia Dortmund did pandemic, advertising income increased by EUR not win the DFL Super Cup, its first competitive 8,571 thousand to EUR 106,609 thousand in financial match of the current financial year, although it did year 2020/2021. This represents a 8.74% increase take home the title in the domestic cup competition. and a 32.96% share of total sales. This increase was Income from domestic cup competitions thus due primarily to the new agreements with the two amounted to EUR 10,131 thousand (previous year: primary sponsors Evonik Industries AG and 1&1 EUR 4,729 thousand). Telecommunication SE as well as with the Income from transfer deals declined by EUR 100,584 equipment supplier PUMA International Sports thousand to EUR 23,148 thousand (previous year: Marketing B.V. that went into effect on 1 July 2020. EUR 123,732 thousand) It resulted from the transfers The holder of the stadium's naming rights, SIGNAL of Dženis Burnić to 1. FC Heidenheim and Ömer IDUNA Holding AG, the sleeve sponsor, Opel Toprak to SV Werder Bremen, as well as from Automobile GmbH, and the ten Champion Partners income from subsequent transfer deals. continue to contribute greatly to income from In the previous financial year, the players Maximilian advertising. Borussia Dortmund also added another Philipp transferred to FC Dynamo Moscow, Abdou sponsor for its youth programmes: adesso SE. Diallo to Paris Saint-Germain, Alexander Isak to Real Sociedad, Julian Weigl to Benfica Lisbon, Paco In addition to basic fees, advertising income also Alcácer to Villarreal CF, Jacob Bruun Larsen to TSG includes bonuses for taking third place in the table Hoffenheim, Sebastian Rode to Eintracht Frankfurt at the end of the season and the resulting automatic and Shinji Kagawa to Real Zaragoza. qualification for the group stage of the 2021/2022 Conference, catering and miscellaneous income UEFA Champions League, for reaching the knockout declined by EUR 11,479 thousand to EUR 6,531 stages in the UEFA Champions League, and for thousand (previous year: EUR 18,010 thousand) The winning the DFB Cup in the 2020/2021 financial year. COVID-19 pandemic and the resulting absence of spectators on match days had a negative impact on In financial year 2020/2021, income from TV income from hospitality and catering as well as on marketing once again represented the highest share advance booking fees for match day and season of sales (57.70%) and increased by EUR 16,819 ticket sales. 101
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund In the reporting period, miscellaneous income, which as well as this year’s DFL Super Cup in Munich. In includes rental and lease income and BVB TV, the previous year, a four-part documentary series decreased by EUR 7,190 thousand to EUR 4,097 about Borussia Dortmund had also been marketed. thousand. This was due primarily to the spin-off of The release fees for national team players decreased BVB Fußballakademie GmbH as at 1 October 2020 by EUR 443 thousand to EUR 2,268 thousand. Other operating income Other operating income decreased by EUR 1,771 In the previous year, this item had included income thousand year on year to EUR 7,327 thousand. from the reversal of provisions, insurance During the current financial year, this consisted reimbursements and from the waiver of mainly of insurance reimbursements, income reimbursement claims as well as to reversals of from the reversal of provisions and income from write-downs. the reimbursement for granting contractual The share of prior-period income in other operating marketing rights. income amounted to EUR 1,898 thousand (previous year: EUR 5,382 thousand). Personnel expenses In financial year 2020/2021, personnel expenses amounted to EUR 205,604 thousand (previous year: EUR203,523 thousand). EUR '000 2020/2021 2019/2020 Match operations 146,185 143,713 Retail and Administration 19,279 18,303 Amateur and youth football 11,398 12,144 176,862 174,160 Furthermore, the professional squad received Bundesliga with 64 points, winning the DFB Cup, performance-based bonuses of EUR 28,742 reaching the quarter-final of the UEFA Champions thousand in financial year 2020/2021 (previous League, thereby automatically qualifying for the year: EUR 29,363 thousand). This was due to the group stage of the competition in the coming team finishing in third-place finish in the 2021/2022 season. Other operating expenses EUR '000 2020/2021 2019/2020 Match operations 41,405 49,981 Advertising 11,366 27,192 Transfer deals 9,565 80,058 Retail 1,696 2,227 Administration 22,815 25,094 Other 4,816 8,922 91,663 193,474 102
ANNUAL FINANCIAL STATEMENTS for the financial year from 1 July 2020 to 30 June 2021 day expenses, as only three home matches were Other operating expenses decreased by EUR 101,811 thousand or approximately 52.62% across played for the 2020/2021 season, with severely all items of other operating expenses, from EUR restricted stadium capacity. 193,474 thousand in the previous year to EUR 91,663 thousand in the reporting period. Advertising expenses decreased by EUR 15,826 thousand. Despite the increase in advertising The largest decrease under this item was seen in income, the newly signed agency licensing transfer deals, which fell by EUR 70,493 thousand agreement with the marketing firm SPORTFIVE to EUR 9,565 thousand. By contrast to the previous Germany GmbH made it possible to significantly year, during which transfer deals resulted in the reduce the agency commission payable. carrying amounts for the players Maximilian Philipp, Abdou Diallo, Alexander Isak, Julian Weigl, Administrative expenses decreased during the Paco Alcácer, Jacob Bruun Larsen and Sebastian financial year ended by EUR 2,279 thousand to Rode being derecognised, the only carrying EUR 22,815 thousand. A slight increase in IT amounts derecognised this financial year were for expenses was offset by significantly lower travel, the players Ömer Toprak and Dženis Burnić as well representation and event expenses. as for the former trainer Lucien Favre. This item also includes sales-related costs for departures Other expenses decreased by EUR 4,106 thousand and other (subsequent) variable transfer to EUR 4,816 thousand. This reduction was caused compensation. mainly by lower allowances on receivables and lower losses on disposals of fixed assets as well as Expenses from match operations decreased by EUR lower expenses for office supplies. 8,576 thousand to EUR 41,405 thousand (previous The share of prior-period expenses in other year: EUR 49,981 thousand). This was due mainly operating expenses amounted to EUR 604 thousand to lower catering expenses as well as lower match (previous year: EUR 651 thousand). Financial result The financial result for financial year 2020/2021 year: EUR 4,669 thousand). These include the amounted to EUR -262 thousand (previous year: results of BVB Merchandising GmbH, BVB Event & EUR 1,915 thousand) and breaks down as follows: Catering GmbH, BVB Stadionmanagement Income and expenses from profit and loss transfer GmbH, besttravel dortmund GmbH and BVB agreements totalled EUR 259 thousand (previous Fußballakademie GmbH. Income from profit and loss transfer agreements Net profit/loss Net profit/loss 01/07/2020 to 30/06/2021 01/07/2019 to 30/06/2020 EUR '000 BVB Stadionmanagement GmbH 42 64 besttravel dortmund GmbH 100 566 BVB Merchandising GmbH -748 2,458 BVB Event & Catering GmbH 725 1,581 BVB Fußballakademie GmbH 140 - Total 259 4,669 103
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Furthermore, interest income of EUR 121 thousand was recognised and related to entirely to compounding. Interest expenses amounted to EUR 642 thousand and comprised mainly financing charges of EUR 554 thousand and discounting effects of EUR 40 thousand. Taxes on income EUR 342 thousand in tax income (previous year: tax expense of EUR 50 thousand) was reported under taxes on income. This was due primarily to the receipt of trade tax reimbursements. OTHER DISCLOSURES Corporate Governance The management and Supervisory Board of Borussia Dortmund GmbH & Co. KGaA issued the Declaration of Conformity with the German Corporate Governance Code required by § 161 of the German Stock Corporation Act (Aktiengesetz, "AktG") on 7 September 2020 and made it permanently available to shareholders on the website at https://aktie.bvb.de/eng/Corporate-Governance/Statement-of-Compliance. General partner The general partner is Borussia Dortmund Dortmund, HRB No. 14206. The managing directors Geschäftsführungs-GmbH, whose registered office of this company are Hans-Joachim Watzke is in Dortmund and which does not have an interest (Chairman), Thomas Treß (each of whom has sole in the Company's share capital. Its share capital power of representation) and Carsten Cramer (joint amounts to EUR 30 thousand. Borussia Dortmund power of representation). Geschäftsführungs-GmbH is exempt from the In the most recent financial year, the members of restrictions contained in § 181 of the German Civil management received the following amounts for Code (Bürgerliches Gesetzbuch, "BGB") and is listed their activities, including responsibilities relating to in the commercial register of the Local Court of subsidiary companies: EUR '000 2020/2021 2019/2020 Dipl.-Kfm. Hans-Joachim Watzke (Chairman) Fixed components Fixed remuneration 1,905 1,802 Other r emuneration 41 40 Dipl.-Kfm. Thomas Treß Fixed components Fixed remuneration 905 860 Other r emuneration 61 72 Carsten Cramer Fixed components Fixed remuneration 873 864 Other remuneration 33 42 3,818 3,680 The management did not receive any performance-based remuneration for the 2020/2021 financial year or the previous year. 104
ANNUAL FINANCIAL STATEMENTS for the financial year from 1 July 2020 to 30 June 2021 SUPERVISORY BOARD The members of the Company's Supervisory Board waived 33.33% of their Supervisory Board remuneration in financial year 2020/2021. Their names, occupations and their further responsibilities on other management bodies are listed below: SUPERVISORY BOARDof Borussia Dortmund GmbH & Co. KGaA Gerd Christian Bernd Peer Ulrich Bjørn Dr. Reinhold Silke Bodo Judith Pieper Kullmann Geske Steinbrück Leitermann Gulden Lunow Seidel Löttgen Dommermuth Chairman Deputy Chairman (until (since 19 November 2020) 19 November 2020) FULL REMUNERATION PAYABLE FOR 2020/2021(EUR '000) 48 36 24 9 24 24 24 24 24 15 OCCUPATIONS(as at 30 June 2021) Retired; former Chairman of Managing Senior Advisor Chairman of the Chief Executive Medical Director Senior Executive Chair of the CDU Managing Managing the Executive partner of to the Manage- Managing Boards Officer of of Praxisklinik at Dortmunder parliamentary partner of JUVIA Director of Board of Evonik Bernd Geske ment Board of of group parent PUMA SE, Bornheim, Stadtwerke AG group in the state Verwaltungs Stadt- Industries AG, Lean ING-DiBa AG, companies of the Herzogenaurach Bornheim and Managing parliament of GmbH, Cologne Parfümerie Essen Communication, Frankfurt am SIGNAL IDUNA Director of North Rhine- Pieper GmbH, Meerbusch Main Group, Dortmund Hohenbuschei Westphalia, Herne (SIGNAL Kran- Beteiligungsge- detective chief kenversicherung sellschaft mbH, inspector Kriminalhaupt- a.G., Dortmund; Westfalentor 1 ( SIGNAL IDUNA GmbH and kommissar) Lebensversiche- Dortmund Logi- (ret.), public rung a.G., stik GmbH, all in administration Hamburg; Dortmund graduate SIGNAL IDUNA Unfallversiche- rung a.G., Dortmund; SIGNAL IDUNA Allgemeine Ver- sicherung AG, Dortmund) OTHER FUNCTIONS on statutory supervisory boards and comparable German or foreign supervisory bodies of commercial enterprises (as at 30 June 2021) Member of the Chairman of the Member and Chairman of the Member of the Advisory Board Supervisory Chairman of the Board Salling Advisory Board of Borussia Board of Clear- Supervisory Group A/S, of Borussia Dortmund VAT Aktiengesell- Board of Braband, Dortmund Geschäfts- schaft, Berlin Dortmunder Denmark (since Geschäfts- führungs-GmbH, Volksbank eG, 6 March 2020); führungs GmbH, Dortmund Dortmund; Member of the Dortmund Member and Supervisory Chairman of the Board of Tchibo Supervisory GmbH, Hamburg Board of Sana Kliniken AG, Ismaning 105
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Employees The average number of employees during the year was 462 (previous year: 517): Average number of salaried employees 2020/2021 2019/2020 Total 462 517 of which in the Athletics Department 233 273 of which trainees 2 4 of which other 227 240 List of shareholdings The following table gives summarised information relating to companies in which the Company has a shareholding of more than 20%: Registered Share capital Shareholding Equity Net profit/loss office (EUR '000) % (EUR '000) (EUR '000) as at 01/07/2020 to 30/06/2021 30/06/2021 Shares in affiliated companies BVB Stadionmanagement GmbH* Dortmund 52 100.00 66 42 besttravel dortmund GmbH* Dortmund 50 100.00 144 100 BVB Merchandising GmbH* Dortmund 75 100.00 10,881 -748 BVB Event & Catering GmbH* Dortmund 25 100.00 25 725 BVB Asia Pacific Pte. Ltd. Singapur 66 100.00 220 27 BVB Fußballakademie GmbH* Dortmund 50 100.00 431 140 Equity investments Orthomed Medizinisches Leistungs- und Rehabilitationszentrum GmbH** Dortmund 52 33.33 1,027 81 * Profit and loss transfer agreements are in force. Profit/loss of the Company under HGB prior to transfer to/absorption by the consolidated tax group parent. ** Profit/loss of Orthomed Medizinisches Leistungs- und Rehabilitationszentrum GmbH for financial year 2020 and equity as at 31 December 2020. The companies are included in the consolidated financial statements of Borussia Dortmund GmbH & Co. KGaA, Dortmund. The consolidated financial statements are published in the electronic Federal Gazette. Related-party disclosures The general partner in Borussia Dortmund GmbH thus rests with BV. Borussia 09 e.V., Dortmund, in & Co. Kommanditgesellschaft auf Aktien is its capacity as the sole shareholder in Borussia Borussia Dortmund Geschäftsführungs-GmbH. Dortmund Geschäftsführungs-GmbH. Both The latter is responsible for the management and Borussia Dortmund Geschäftsführungs-GmbH and legal representation of Borussia Dortmund GmbH BV. Borussia 09 e.V. Dortmund, as well as all & Co. Kommanditgesellschaft auf Aktien. The companies associated therewith hence are power to appoint and remove members of staff deemed to be related parties. 106
ANNUAL FINANCIAL STATEMENTS for the financial year from 1 July 2020 to 30 June 2021 Auditors’ fee assessment in individual cases. The auditors were KPMG AG audited the annual and consolidated financial statements of Borussia Dortmund GmbH & also tasked with conducting a limited assurance Co. KGaA and conducted further statutory and engagement on the separate non-financial Group voluntary audits at subsidiaries. The auditors report. For details of the auditors' fees, please see reviewed the interim consolidated financial the notes to the consolidated financial statements. statements and carried out mandatory audits and The disclosures are not made in this report due to reviews as part of the DFL licensing procedure the exemption under § 285 no. 17 HGB for entities pursuant to the DFL licensing regulations. KPMG also preparing consolidated financial statements. provided tax advisory services covering advice and Notifiable shareholdings (under § 160 (1) no. 8 AktG in conjunction with § 33 (1) and (2) WpHG) Of the shareholdings in our Company, the following to 4.99% on 16 February 2021 (4,599,900 voting were notified to us pursuant to § 33 (1) of the German rights or shares) and that all of their voting rights Securities Trading Act (Wertpapierhandelsgesetz, were held directly by PUMA SE in accordance with "WpHG") and published with the following content § 33 WpHG. pursuant to § 40 (1) WpHG in financial year 2020/2021: Mr Ralph Dommermuth notified us on 8 February 2021 that his voting interest in Borussia Dortmund On 26 February 2021, Mr François Henri Joseph GmbH & Co. KGaA amounted to 4.99% on 8 February Pinault and Mr François Jean-Henri Pinault notified 2021 (4,599,000 voting rights/shares) and that all us that their voting rights in Borussia Dortmund GmbH of these voting rights were attributable to him & Co. KGaA amounted to 0.0% as at 16 May 2018 (0 (Mr Ralph Dommermuth) pursuant to § 34 WpHG voting rights or shares); that their notification was via Ralph Dommermuth Beteiligungen GmbH, and submitted due to the discontinuation of the jointly furthermore that the chain of subsidiaries is as attributed controlling position in relation to PUMA SE, follows, beginning with the ultimate controlling as a consequence of which no voting rights stemming person or entity: from shares in Borussia Dortmund GmbH & Co. KGaA - Ralph Dommermuth were attributable to Kering S.A., Artémis S.A. or - Ralph Dommermuth Verwaltungs GmbH Financière Pinault S.C.A. - Ralph Dommermuth GmbH & Co. KG PUMA SE, Herzogenaurach, Germany, notified us Beteiligungsgesellschaft on 17 February 2021, that its share of voting rights - Ralph Dommermuth Beteiligungen GmbH with a in Borussia Dortmund GmbH & Co. KGaA amounted voting interest of 4.99% Shareholdings by members of governing bodies As at 30 June 2021, one member of management Members of management and the Supervisory Board held 7,045 no-par value shares in the Company. As hold a total of 8,609,054 no-par-value shares, which at the same date, the members of the Supervisory corresponds to more than 1% of the shares issued Board held a total of 8,602,009 no-par value shares. by Borussia Dortmund GmbH & Co. KGaA. Expected dividend In light of the fact that the Company reports a net loss to propose to the Annual General Meeting any dividend for the financial year, the management does not intend distribution for financial year 2020/2021. 107
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Report on post-balance sheet date events Transfer deals Match operations Borussia Dortmund has reached an agreement with On 4 December 2020, the DFB Executive Committee top English club Manchester United regarding the adopted the new fixture calendar for the 2021/2022 transfer of player Jadon Sancho. As part of this season. This stipulated that Bundesliga matches agreement, Borussia Dortmund will receive a fixed would start on the weekend of 13 to 15 August 2021. transfer fee of EUR 85.0 million, which is expected The 34th and final Bundesliga match day is to have a positive effect of around EUR 56.0 million scheduled for 14 May 2022. on the key earnings figures (EBITDA, EBIT) for the 2021/2022 financial year. The DFB Cup will start with the first round one week before the Bundesliga from 6 August 2021. Borussia Dortmund has now reached an agreement with French club Olympique Marseille on the The DFL Super Cup between Borussia Dortmund and permanent transfer of Leonardo Balerdi, who had Bayern Munich will be played on 17 August 2021. already spent the 2020/2021 season on loan there. The dates for the UEFA Champions League have also already been set: the first match day of the group Capital expenditure stage will be played on 14/15 September 2021. Borussia Dortmund has signed Dutch international Donyell Malen from PSV Eindhoven. The 22-year-old signed a contract that runs until 30 June 2026. Dortmund, 9 August 2021 Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien Borussia Dortmund Geschäftsführungs-GmbH Hans-Joachim Watzke Thomas Treß Carsten Cramer Managing Director (Chairman) Managing Director Managing Director 108 41009946 1376911
ANNUAL FINANCIAL STATEMENTS for the financial year from 1 July 2020 to 30 June 2021 Note: This is a translation of the German original. Solely the original text in German language is authoritative. INDEPENDENT AUDITOR'S REPORT To Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund REPORT ON THE AUDIT OF THE ANNUAL FINANCIAL STATEMENTS AND OF THE MANAGEMENT REPORT Opinions that are not provided for by law and which are We have audited the annual financial statements of marked as unaudited. Our audit opinion does not Borussia Dortmund GmbH & Co. Kommanditgesell- extend to the cross-references and the information schaft auf Aktien, Dortmund ("Company" or "Borussia to which the cross-references refer. Dortmund"), which comprise the balance sheet as of June 30, 2021 and thestatement of profit and loss Pursuant to Section 322 (3) sentence 1 HGB for the financial year from July 1, 2020 to June 30, [Handelsgesetzbuch: German Commercial Code], we 2021, and notes to the financial statements, declare that our audit has not led to any reservations including the recognition and measurement policies relating to the legal compliance of the annual presented therein. In addition, we have audited the financial statements and of the management report. management report of Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien for the Basis for the Opinions financial year from July 1, 2020 to June 30, 2021. We conducted our audit of the annual financial statements and of the management report in In our opinion, on the basis of the knowledge obtained accordance with Section 317 HGB and the EU Audit in the audit, Regulation No. 537/2014 (referred to subsequently as "EU Audit Regulation") and in compliance with – the accompanying annual financial statements German Generally Accepted Standards for comply, in all material respects, with the Financial Statement Audits promulgated by the requirements of German commercial law Institut der Wirtschaftsprüfer [Institute of Public applicable to business corporations and give a Auditors in Germany] (IDW). Our responsibilities true and fair view of the assets, liabilities and under those requirements and principles are financial position of the Company as of June 30, further described in the "Auditor's Responsibilities 2021, and of its financial performance for the for the Audit of the Annual Financial Statements financial year from July 1, 2020 to June 30, 2021, and of the Management Report" section of our in compliance with German Legally Required auditor's report. We are independent of the Accounting Principles, and Company in accordance with the requirements of – the accompanying management report as a European law and German commercial and whole provides an appropriate view of the professional law, and we have fulfilled our Company's position. In all material respects, this other German professional responsibilities in management report is consistent with the annual accordance with these requirements. In addition, financial statements, complies with German legal in accordance with Article 10 (2)(f) of the EU Audit requirements and appropriately presents the Regulation, we declare that we have not provided opportunities and risks of future development. non-audit services prohibited under Article 5 (1) Our opinion on the management report does not of the EU Audit Regulation. We believe that the cover the content of those components of the evidence we have obtained is sufficient and management report specified in the "Other appropriate to provide a basis for our opinions on Information" section of the auditor's report. The the annual financial statements and on the management report contains cross-references management report. 109
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Key Audit Matters in the Audit of the Annual the financial year from July 1, 2020, to June 30, Financial Statements 2021. These matters were addressed in the context Key audit matters are those matters that, in our of our audit of the annual financial statements as a professional judgment, were of most significance whole, and in forming our opinion thereon, we do in our audit of the annual financial statements for not provide a separate opinion on these matters. Measurement of player registrations as well as the completeness and measurement of liabilities from transfers We refer to the information in the notes to the OUR AUDIT APPROACH financial statements on accounting policies as well By examining material transfer and agent as to the explanatory notes to the balance sheet agreements for new players, we assessed player (Sections: Intangible assets and Liabilities). registrations in terms of how the acquisition costs and related liabilities were determined. THE FINANCIAL STATEMENT RISK Player registrations in the amount of EUR 203.1 As part of subsequent measurement, we checked million are presented under intangible assets in the material transfer and agent agreements to assess annual financial statements of Borussia Dortmund. whether conditions had occurred in financial year Player registrations decreased to EUR 203.1 million 2020/2021 triggering subsequent acquisition costs in the financial year ended due to additions of and additional liabilities from transfers and whether EUR58.7 million, reclassifications of EUR 0 million, these were recognized accordingly in the financial disposals of EUR 4.1 million, write-downs of statements. EUR99.6 million and reversals of write-downs of EUR 0 million. Trade payables include transfer Furthermore, we examined material contract liabilities of EUR 87.7 million. modifications or contract renewals for subsequent acquisition costs and additional liabilities and The acquisition cost of player registrations is whether the adjustments to useful lives were determined based on individual and complex reasonable. transfer agreements between the transferring and receiving clubs as well as any agreements with OUR OBSERVATIONS players' agents concluded in this context. Due to the Transfer and agent agreements were appropriately heterogeneity and complexity of the contract assessed in terms of measuring player registrations provisions, there is generally the risk that the and measuring the completeness of the related intangible asset and the related transfer liability are transfer liabilities. not measured appropriately on initial recognition in the financial statements. Furthermore, there is generally the risk of inappropriate subsequent measurement of the intangible assets and transfer liabilities, as well as of the completeness of transfer liabilities that may arise if conditional contractual components or contract modifications materialize. 110
ANNUAL FINANCIAL STATEMENTS for the financial year from 1 July 2020 to 30 June 2021 Completeness and accuracy of personnel expenses of the professional squad We refer to the information in the explanatory employment contracts with their remuneration notes to the income statement (Section: Personnel components and amounts as well as individual expenses). termination agreements. We checked the consistency of contracts deliberately selected THE FINANCIAL STATEMENT RISK according to certain risk criteria with the Among other expenses, the salaries of the corresponding salary calculations. For the professional squad are disclosed under personnel selected contracts, we checked to what extent expenses in the financial statements of Borussia contractually agreed conditions now apply for the Dortmund. These include, besides the base salaries, variable remuneration components. Furthermore, also performance-related remuneration, such as we examined whether events had occurred that appearance bonuses and annual performance would have resulted in higher expenses. In terms bonuses, as well as individual special payments. Due of agreed special or one-off payments, we to individually agreed remuneration components and examined whether personnel expenses were remuneration amounts, there is generally the risk for recognized in the proper period regardless of the the financial statements that the personnel expenses payment date. of the professional squad were not completely reported or not reported at the correct amount. OUR OBSERVATIONS The individually agreed remuneration components OUR AUDIT APPROACH and compensation amounts were appropriately Our audit procedures in particular included an recognized as personnel expenses of the inspection and assessment of the currently valid professional squad. 111
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Other information Management and/or the Supervisory Board are/is Our opinions on the annual financial statements responsible for the other information. The other and on the management report do not cover the information comprises the following components other information, and consequently we do not of the management report, whose content was not express an opinion or any other form of assurance audited: conclusion thereon. – the non-financial statement referred to in the management report, In connection with our audit, our responsibility is to – the corporate governance statement referred read the aforementioned other information and, in to in the management report, so doing, to consider whether the other information – is materially inconsistent with the annual The other information also includes the remaining financial statements, with the management parts of the annual report made available to us after report information audited for content or our the date of the independent auditor's report. The other knowledge obtained in the audit, or information does not include the annual financial – otherwise appears to be materially misstated. statements, the management report information audited for content and our auditor's report thereon. Responsibilities of Management and the Supervisory Board for the Annual Financial Statements and the Management Report Management is responsible for the preparation of Furthermore, management is responsible for the the annual financial statements that comply, in all preparation of the management report that as a material respects, with the requirements of German whole provides an appropriate view of the commercial law applicable to business corporations, Company's position and is, in all material respects, and that the annual financial statements give a true consistent with the annual financial statements, and fair view of the assets, liabilities, financial complies with German legal requirements, and position and financial performance of the Company appropriately presents the opportunities and risks in compliance with German Legally Required of future development. In addtion, management is Accounting Principles. In addition, management is responsible for such arrangements and measures responsible for such internal control as they, in (systems) as they have considered necessary to accordance with German Legally Required Accounting enable the preparation of a management report that Principles, have determined necessary to enable the is in accordance with the applicable German legal preparation of annual financial statements that are requirements, and to be able to provide sufficient free from material misstatement, whether due to appropriate evidence for the assertions in the fraud or error. management report. In preparing the annual financial statements, The supervisory board is responsible for overseeing management is responsible for assessing the the Company's financial reporting process for the Company's ability to continue as a going concern. They preparation of the annual financial statements and also have the responsibility for disclosing, as applicable, of the management report. matters related to going concern. In addition, they are responsible for financial reporting based on the going concern basis of accounting, provided no actual or legal circumstances conflict therewith. 112
ANNUAL FINANCIAL STATEMENTS for the financial year from 1 July 2020 to 30 June 2021 Auditor's Responsibilities for the Audit of the Annual Financial Statements and of the Management Report Our objectives are to obtain reasonable assurance statements and of arrangements and measures about whether the annual financial statements as a (systems) relevant to the audit of the whole are free from material misstatement, whether management report in order to design audit due to fraud or error, and whether the management procedures that are appropriate in the report as a whole provides an appropriate view of circumstances, but not for the purpose of the Company's position and, in all material respects, expressing an opinion on the effectiveness of is consistent with the annual financial statements these systems. and the knowledge obtained in the audit, complies – Evaluate the appropriateness of accounting with the German legal requirements and policies used by management and the appropriately presents the opportunities and risks reasonableness of estimates made by of future development, as well as to issue an auditor's management and related disclosures. report that includes our opinions on the annual – Conclude on the appropriateness of management's financial statements and on the management report. use of the going concern basis of accounting and, based on the audit evidence obtained, whether a Reasonable assurance is a high level of assurance, material uncertainty exists related to events or but is not a guarantee that an audit conducted in conditions that may cast significant doubt on the accordance with Section 317 HGB and the EU Audit Company's ability to continue as a going concern. Regulation and in compliance with German If we conclude that a material uncertainty exists, Generally Accepted Standards for Financial we are required to draw attention in the auditor's Statement Audits promulgated by the Institut der report to the related disclosures in the annual Wirtschaftsprüfer (IDW) will always detect a material financial statements and in the management misstatement. Misstatements can arise from fraud report or, if such disclosures are inadequate, to or error and are considered material if, individually modify our respective opinions. Our conclusions or in the aggregate, they could reasonably be are based on the audit evidence obtained up to expected to influence the economic decisions of the date of our auditor's report. However, future users taken on the basis of these annual financial events or conditions may cause the Company to statements and this management report. cease to be able to continue as a going concern. – Evaluate the overall presentation, structure and We exercise professional judgment and maintain content of the annual financial statements, professional skepticism throughout the audit. including the disclosures, and whether the We also: annual financial statements present the – Identify and assess the risks of material underlying transactions and events in a manner misstatement of the annual financial statements that the annual financial statements give a true and of the management report, whether due to and fair view of the assets, liabilities, financial fraud or error, design and perform audit position and financial performance of the procedures responsive to those risks, and obtain Company in compliance with German Legally audit evidence that is sufficient and appropriate Required Accounting Principles. to provide a basis for our opinions. The risk of – Evaluate the consistency of the management not detecting a material misstatement resulting report with the annual financial statements, its from fraud is higher than for one resulting from conformity with [German] law, and the view of error, as fraud may involve collusion, forgery, the Company's position it provides. intentional omissions, misrepresentations, or – Perform audit procedures on the prospective the override of internal controls. information presented by management in the – Obtain an understanding of internal control management report. On the basis of sufficient relevant to the audit of the annual financial appropriate audit evidence we evaluate, in 113
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund particular, the significant assumptions used by We also provide those charged with governance with management as a basis for the prospective a statement that we have complied with the relevant information, and evaluate the proper derivation independence requirements, and communicate with of the prospective information from these them all relationships and other matters that may assumptions. We do not express a separate reasonably be thought to bear on our independence, opinion on the prospective information and on and where applicable, the related safeguards. the assumptions used as a basis. There is a substantial unavoidable risk that future events From the matters communicated with those will differ materially from the prospective charged with governance, we determine those information. matters that were of most significance in the audit of the annual financial statements of the current We communicate with those charged with period and are therefore the key audit matters. We governance regarding, among other matters, the describe these matters in our auditor's report planned scope and timing of the audit and significant unless law or regulation precludes public disclosure audit findings, including any significant deficiencies about the matter. in internal control that we identify during our audit. OTHER LEGAL AND REGULATORY REQUIREMENTS Report on Assurance in accordance with Section 317 (3b) HGB on the Electronic Reproduction of the Annual Financial Statements and the Management Report Prepared for Publication Purposes We have performed assurance work in accordance conversion of the information contained in the with Section 317 (3b) HGB to obtain reasonable annual financial statements and the management assurance about whether the reproduction of the report into the ESEF format and therefore relates annual financial statements and the management neither to the information contained in this report (hereinafter the “ESEF documents”) reproduction nor any other information contained contained in the file that can be downloaded by the in the above-mentioned electronic file. issuer from the electronic client portal with access protection “ESEF-Prüfung.zip”; [SHA256-hash value: In our opinion, the reproduction of the annual b26c9a4b8c1eba0ab33724ffda6c252b44c79c8d26 financial statements and the management report b12b131d03789eabd7619f] and prepared for contained in the above-mentioned electronic file publication purposes complies in all material and prepared for publication purposes complies in respects with the requirements of Section 328 (1) all material respects with the requirements of HGB for the electronic reporting format (“ESEF Section 328 (1) HGB for the electronic reporting format”). In accordance with German legal format. We do not express any opinion on the requirements, this assurance only extends to the information contained in this reproduction nor on 114
ANNUAL FINANCIAL STATEMENTS for the financial year from 1 July 2020 to 30 June 2021 any other information contained in the above- audited annual financial statements and audited mentioned file beyond this reasonable assurance management report as well as other documents opinion and our audit opinion on the accompanying to be published to the operator of the German annual financial statements and the accompanying Federal Gazette [Bundesanzeiger]. management report for the financial year from July 1, 2020 to June 30, 2021 contained in the “Report The supervisory board is responsible for overseeing on the Audit of the Annual Financial Statements and the preparation of the ESEF documents as part of of the Management Report” above. the financial reporting process. We conducted our assurance work of the Our objective is to obtain reasonable assurance reproduction of the annual financial statements about whether the ESEF documents are free from and the management report contained in the material intentional or unintentional non-compliance above-mentioned electronic file in accordance with with the requirements of Section 328 (1) HGB. We Section 317 (3b) HGB and the Exposure Draft of exercise professional judgement and maintain the IDW Assurance Standard: Assurance in professional scepticism throughout the assurance accordance with Section 317 (3b) HGB on the work. We also: Electronic Reproduction of Financial Statements – Identify and assess the risks of material and Management Reports Prepared for Publication intentional or unintentional non-compliance Purposes (ED IDW AsS 410). Accordingly, our with the requirements of Section 328 (1) HGB, responsibilities are further described below. Our design and perform assurance procedures audit firm has applied the IDW Standard on Quality responsive to those risks, and obtain Management 1: Requirements for Quality assurance evidence that is sufficient and Management in Audit Firms (IDW QS 1). appropriate to provide a basis for our assurance opinion. The Company’s management is responsible for the – Obtain an understanding of internal control preparation of the ESEF documents including the relevant to the assessment of the ESEF electronic reproduction of the annual financial documents in order to design assurance statements and the management report in accordance procedures that are appropriate in the with Section 328 (1) sentence 4 item 1 HGB. circumstances, but not for the purpose of expressing an assurance opinion on the In addition, the Company’s management is effectiveness of these controls. responsible for the internal controls they consider – Evaluate the technical validity of the ESEF necessary to enable the preparation of ESEF documents, i.e. whether the electronic file documents that are free from material intentional containing the ESEF documents meets the or unintentional non-compliance with the requirements of Commission Delegated requirements of Section 328 (1) HGB for the Regulation (EU) 2019/815 on the technical electronic reporting format. specification for this electronic file. – Evaluate whether the ESEF documents enable The Company’s management is also responsible an XHTML reproduction with content equivalent for the submission of the ESEF documents to the audited annual financial statements and together with the auditor’s report and the attached the audited management report. 115
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund FURTHER INFORMATION PURSUANT TO ARTICLE 10 OF THE EU AUDIT REGULATION We were elected as group auditor at the annual We declare that the opinions expressed in this general meeting on November 19, 2020. We were auditor's report are consistent with the additional engaged by the supervisory board on January 18, report to the audit committee pursuant to Article 11 2021. We have audited Borussia Dortmund GmbH of the EU Audit Regulation (long-form audit report). & Co. Kommanditgesellschaft auf Aktien, Dortmund, without interruption since financial year 2009/2010. GERMAN PUBLIC AUDITOR RESPONSIBLE FOR THE ENGAGEMENT The German Public Auditor responsible for the engagement is Ralph Fischer. Dortmund, 9 August 2021 KPMG AG Wirtschaftsprüfungsgesellschaft [Original German version signed by] gez. Fischer gez. Huperz Wirtschaftsprüfer Wirtschaftsprüfer [German Public Auditor] [German Public Auditor] 116
ANNUAL FINANCIAL STATEMENTS for the financial year from 1 July 2020 to 30 June 2021 RESPONSIBILITY STATEMENT To the best of our knowledge, and in accordance includes a fair review of the development and with the applicable reporting principles, the annual performance of the business and the position of financial statements give a true and fair view of the the Company, together with a description of the assets, liabilities, financial position and profit or principal opportunities and risks associated with loss of the Company, and the management report the expected development of the Company. Dortmund, 9 August 2021 Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien Borussia Dortmund Geschäftsführungs-GmbH Hans-Joachim Watzke Thomas Treß Carsten Cramer Managing Director (Chairman) Managing Director Managing Director 117
GEMENT REPORT GROUP MANA sia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Borus 118118
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BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund GROUP MANAGEMENT REPORT Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund for the 2020/2021 financial year (hereinafter also "Borussia Dortmund" or the "Group") BUSINESS TREND LOOKING BACK ON FINANCIAL YEAR 2020/2021 Athletic Performance COVID-19 pandemic UEFA Champions League The COVID-19 pandemic meant fewer spectators Borussia Dortmund advanced from the group stage at games in the first Bundesliga division. Borussia to the round of 16 of the UEFA Champions League Dortmund's first match of the season was against after finishing top of group F with four wins, one Borussia Mönchengladbach to a crowd of 6,918 on draw and one loss. The team celebrated a 3:2 victory 19 September 2020, followed by home fixtures in the first leg against Sevilla FC before drawing 2:2 against SC Freiburg (10,548 spectators) and FC at home to reach the quarter-finals, where it Schalke 04 (272 spectators). As the pandemic suffered close defeats to Manchester City in both progressed, the rest of the season was played legs and was knocked out of the competition. behind closed doors. DFB Cup Bundesliga The team faced MSV Duisburg, Eintracht Borussia Dortmund chalked up 64 points in the Braunschweig, SC Paderborn 07 and Borussia 2020/2021 Bundesliga season to finish in third Mönchengladbach on its way to resounding place and qualify directly for the group stage of the victories against Holstein Kiel in the semi-final and UEFA Champions League in the 2021/2022 season. RB Leipzig in the final. This was the fifth time that Borussia Dortmund has lifted the DFB Cup, and the team qualified for the DFL Super Cup in the 2021/2022 season. DFB cup 1st round 1st match day 14 September 2020 19 September 2020 MSV Duisburg - BVB 0:5 BVB - Bor. M’gladbach 3:0 120 120
GROUP MANAGEMENT REPORT PERFORMANCE INDICATORS Various financial and non-financial indicators are reflect the Group's earnings power and as a source used to measure performance. Borussia Dortmund of funding for ordinary activities. uses these internally-defined performance indicators to guide its entrepreneurial actions and The result from operating activities (EBIT) and net to select the focus of its internal reporting. profit or loss for the year are also used to manage the Company. These financial performance Financial performance indicators indicators play a key role in preparing the budget for From a wide range of possible financial indicators, the coming financial year(s), in interim controlling Borussia Dortmund focuses on those specific with respect to the earnings performance and when indicators that in the past few years were primarily looking back on a particular financial year. used to steer the Company. Another key performance indicator is the operating result (EBITDA). This is due to the considerable level First and foremost is revenue. Management uses of investment activity and the associated increase this indicator to internally manage the Company, in depreciation, amortisation and write-downs. As knowing full well that this indicator alone is not a result, EBITDA (EBIT adjusted for depreciation, sufficiently meaningful. Nevertheless, it provides amortisation and write-downs) has been selected a clear indication of the Company's economic to better benchmark the Company's annual strength, especially when compared against that performance. of competitors or when monitoring the Company's long-term revenue trend. These indicators are rounded out by cash flows from operating activities and free cash flow, both A further financial performance indicator is of which the Company uses for internal planning consolidated total operating proceeds. These are purposes. calculated as total revenue plus the gross transfer Free cash flow is defined as cash flows from proceeds generated. This indicator is used to operating activities plus cash flows from investing 2ndmatch day DFL-Supercup 26 September 2020 30 September 2020 FC Augsburg - BVB 2:0 Bayern München - BVB 3:2 121 121
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund activities and is a key indicator used to ensure that The number of criteria varies and they are thus cash flows from operating activities are sufficient exchangeable. While any one factor may be of to cover investments. Because Borussia Dortmund's relevance during a given season, this may not strategic objective is to maximize sporting success necessarily be the case in subsequent years. New without incurring new debt, free cash flow is a key media in particular constantly provides new value indicator for the club. In light of steadily growing drivers: for instance, the number of Facebook fans or transfer sums, free cash flow is thus becoming page impressions represent relatively new indicators. increasingly important. Furthermore, it is an indicator used to determine whether Borussia Measurable criteria include, for example, the Dortmund has sufficient funds to finance the steady number of season tickets sold, attendance figures dividend payments to its shareholders. Therefore, and television broadcast hours. Borussia Dortmund strives to continuously optimise free cash flow. Awards, surveys and studies represent possible criteria that cannot be measured quantitatively. Non-financial performance indicators Another "soft" criterion is the deliberate selection Borussia Dortmund's only non-financial performance of sponsors whose products and brand images are indicator is the reach of its brand. aligned with the Borussia Dortmund brand. While it is impossible to measure the reach of Borussia Dortmund's decision-makers receive Borussia Dortmund's brand, it is determined by a reports about all criteria on a regular basis. number of criteria that, when taken together, are Furthermore, taken as a whole, these are an indicator representative of the brand's reach. of the success of the Company's strategic alignment. Some of these criteria are measureable, while others are not. Nevertheless, they are a reflection Compared to the previous year, there were no of the Company's appeal. changes to Borussia Dortmund's control system. 3rdmatch day 4th match day 3 October 2020 17 October 2020 BVB - Sportclub Freiburg 4:0 TSG Hoffenheim - BVB 0:1 122 122
GROUP MANAGEMENT REPORT DEVELOPMENT OF THE MARKET AND COMPETITIVE ENVIRONMENT Sponsorships restrictions on match-day advertising and the Since the beginning of the 2020/2021 season, contractual claims of hospitality clients in particular Borussia Dortmund has had two kit sponsors. The could not be met in full. As a result, Borussia team wears kits bearing the logo of Evonik Industries Dortmund saw its revenue here decline. AG in all international club competitions, friendlies staged abroad and DFB Cup matches, while 1&1 Telecommunication SE is the kit sponsor for Transfer deals Bundesliga matches. Five players left Borussia Dortmund in the summer of 2020. After loaning Ömer Toprak for Borussia Dortmund's newest official Premium the past financial year, SV Werder Bremen Partner for the next five years is DEW21 Dortmunder exercised its buy option to permanently secure the Energie- und Wasserversorgung GmbH. Both defender's services. Mario Götze joined Dutch companies will leverage their proximity to one first-division club PSV Eindhoven in the 2020/2021 another to further strengthen their social and season after his contract with Borussia Dortmund cultural outreach efforts in the city of Dortmund. was not extended at the end of the previous season. Achraf Hakimi's loan spell also ended on adesso SE is now the new primary and kit sponsor 30 June 2020, at which time he, too, departed for Borussia Dortmund's youth squads. The Borussia Dortmund bound for Inter Milan. Dženis Dortmund-based IT service provider will remain a Burnić made the switch to 1. FC Heidenheim in the sponsor until 2023, and from the 2021/2022 season second Bundesliga division. André Schürrle signed onwards will also be the official kit sponsor for a rescission agreement with the club and ended Borussia Dortmund's new women's team. his football career. Borussia Dortmund extended its contract with its Three other players left Borussia Dortmund on loan Champion Partner ROWE Marketing GmbH early to other clubs: Leonardo Balerdi was loaned to until 30 June 2025. Olympique Marseille in France's Ligue 1. After signing an early contract extension with Borussia In the 2020/2021 season, Borussia Dortmund also Dortmund until 30 June 2022, Immanuel Pherai added Bybit (Wechain Fintech Pte. Ltd.) as a new was loaned to PEC Zwolle for the current season. Champion Partner. Both loan agreements are set to expire on 30 June 2021. At the start of October 2020, Marius The COVID-19 pandemic continued to impact Wolf was loaned to 1. FC Cologne until the end of sponsoring in the 2020/2021 season. The fact that the season. matches were mostly held without spectators placed 1st match day UCL 5th match day 20 October 2020 24 October 2020 Lazio Rom - BVB 3:1 BVB - FC Schalke 3:0 123 123
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Sergio Gómez had spent both the 2019/2020 and Hitz sign an early contract extension until 2023. 2020/2021 seasons on loan to Spanish side SD Steffen Tigges and Ansgar Knauff, two of Borussia Huesca, and Borussia Dortmund has now reached Dortmund's talented youngsters, signed their first an agreement to transfer him to Belgian professional contracts and joined the senior squad. championship record-holders RSC Anderlecht on a permanent basis as at 1 July 2021. His contract, Borussia Dortmund signed Soumaila Coulibaly, a which was most recently extended until 2022, will 17-year-old centre back from Paris Saint-Germain. be terminated as part of the transfer. At the end of May 2021, Borussia Dortmund signed Jeremy Toljan also spent the past two seasons on goalkeeper Gregor Kobel from Bundesliga rivals VfB loan, plying his trade at Italian Serie A side U.S. Stuttgart ahead of the new season. The 23-year-old Sassuolo. Certain conditions have triggered the signed a contract that runs until 30 June 2026. purchase option in his contract, resulting in a permanent transfer effective 1 July 2021. TV Marketing The call for tenders concerning the centralised Investments in the professional squad marketing strategy for distributing the national Borussia Dortmund signed three new players in and international TV marketing income for the the summer of 2020. Thomas Meunier departed 2021/2022 to 2024/2025 seasons has been Paris Saint-Germain for Borussia Dortmund on a concluded for the time being. The distribution of free transfer. Borussia Dortmund signed Jude the TV marketing income was resolved in Bellingham from Birmingham City and loaned December 2020. Greater stability and more Brazil U23 international Reinier Jesus Carvalho solidarity are the objectives. In light of the decline from Real Madrid until 30 June 2022. in income from national media rights, the consolidation being seen on international markets Felix Passlack returned to Borussia Dortmund and the significant decrease in revenue at the club following his loan to Fortuna Sittard. The level due to the COVID-19 pandemic, the objective 22-year-old's contract was set to expire at the end of the future distribution system is primarily to of the season, and in May 2021 it was extended by ensure stability during this period of uncertainty, two years until 2023. while setting the course for the future and promoting solidarity at the same time. This offers In November 2020, Giovanni Reyna signed an early Bundesliga clubs planning certainty during the contract extension until 2025. February saw Marwin current difficult situation. 2ndmatch day UCL 6th match day 28 October 2020 31 October 2020 BVB - St. Petersburg 2:0 Arminia Bielefeld - BVB 0:2 124
GROUP MANAGEMENT REPORT Nevertheless, a season without interruptions and the season. All subsequent home matches had to be timely payments by partners in line with their played behind closed doors due to the pandemic. contracts are essential for ensuring the amount and This had a massive impact on the earnings potential timing of the distribution payouts. of match operations. The COVID-19 pandemic is also affecting marketing As one season draws to a close it is customary for income in UEFA club competitions. In order to limit season tickets go on sale for the next season, but as the financial impact of losses caused by the pandemic in the previous year this had to be put on hold due on the clubs participating in UEFA club competitions to the continuing uncertainties surrounding stadium in the 2019/2020 season, UEFA has decided to capacity in 2021/2022 in the wake of COVID-19. compensate for the income shortfall by cutting future payouts to participating clubs over five seasons (from the 2019/2020 to the 2023/2024 season). Other For the 2024/2025 season, the UEFA Champions In December 2020, Borussia Dortmund parted ways League will follow a new format. A total of 36 teams with head coach Lucien Favre after two and a half will compete in a single league, signalling a years. His assistant coach Edin Terzic took over as departure from the current format's 32-team group interim head coach until the end of the season. He stage. This will likely further boost the international was assisted by Sebastian Geppert, who until then TV marketing income generated from competing in had coached the U17 squad, and Otto Addo, who the UEFA Champions League. coaches BVB's top talents. From the 2021/2022 season onwards, Marco Rose Match oper ations from Bundesliga rivals Borussia Mönchengladbach Due to the functional health and safety protocol, will take over as new head coach at Borussia there were no interruptions to the past 2020/2021 Dortmund, while Edin Terzic has extended his season. contract through to 30 June 2025 and will be assuming the newly created role of technical In contrast to the original regulation, under which director. spectators were excluded from matches until 31 October 2020, Borussia Dortmund was able to Borussia Dortmund remains committed to continuity welcome back a limited number of spectators for its among its sporting management and extended the home matches against Borussia Mönchengladbach, contract with its head of the professional squad FC Schalke 04 and SC Freiburg at the beginning of Sebastian Kehl early until 30 June 2025. Sebastian 3rdmatch day UCL 7th match day 4 November 2020 7 November 2020 FC Brügge - BVB 0:3 BVB - Bayern München 2:3 125
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Kehl will take over from Michael Zorc as sporting On the other hand, Thomas Treß and Carsten director from 1 July 2022. Borussia Dortmund also Cramer, whose contracts were set to expire on 30 extended the contract with its youth academy June 2022, each signed early extensions until 30 director Lars Ricken early until 30 June 2025. June 2025. Thomas Treß will remain responsible for "Finance", "Organisation", "Legal" and "Investor Beginning in the 2021/2022 season, Borussia Relations". Carsten Cramer is responsible for the Dortmund will have a women's team. Instead of "Sales & Marketing" and "Digitisation" areas. acquiring the licence of another professional club we are organically developing and promoting Twelve of Europe's top clubs launched a new women's football from within our club. breakaway "Super League" to compete with the UEFA Champions League, only to cancel this project A total of ten players from Borussia Dortmund's mere days later. professional squad were called up to their respective national teams for the European In early September 2020, Borussia Dortmund Championship, including Germany internationals started live streaming on BVB's official Twitch Mats Hummels and Emre Can. channel. YouTube star Erné "FeelFIFA" Embeli hosts the interactive program. Borussia Dortmund lifted the DFB Cup for the fifth time after victories in 1965, 1989, 2012 and 2017. In the past financial year, Borussia Dortmund The team put on a sensational performance to published its fourth Sustainability Report entitled defeat RB Leipzig 4:1 in the final, which was held at "United in solidarity. No matter what." at Berlin's Olympiastadion. https://verantwortung.bvb.de/2020/en/home-en/.* Borussia Dortmund extended the contracts of its * The content accessible via the link does not constitute part of this management report. In accordance with the statutory managing directors. Hans-Joachim Watzke will requirements, KPMG AG Wirtschaftsprüfungsgesellschaft has continue to serve as CEO until 31 December 2025 neither audited the cross-references nor the information to and remains responsible for setting the Company's which the cross-references refer. strategic course, as well as for the areas of "Sports", "Communications" and "Human Resources". 8th match day 4th match day UCL 21 November 2020 24 November 2020 Hertha BSC - BVB 2:5 BVB - FC Brügge 3:0 126 126
GROUP MANAGEMENT REPORT GENERAL INFORMATION ABOUT THE COMPANY GROUP STRUCTURE AND BUSINESS OPERATIONS In addition to its core activities of playing football Pacific Pte. Ltd. (100.00%), besttravel dortmund and marketing SIGNAL IDUNA PARK, Borussia GmbH (100.00%), BVB Fußballakademie GmbH Dortmund has established football-related lines of (100.00%) and Orthomed Medizinisches Leistungs- business. The Company currently holds indirect and und Rehabilitationszentrum GmbH (Orthomed direct equity investments in the following GmbH) (33.33%). companies: BVB Stadionmanagement GmbH (100.00%), BVB Merchandising GmbH (100.00%), Some of these companies have concluded profit and BVB Event & Catering GmbH (100.00%), BVB Asia loss transfer agreements with the parent. Borussia Dortmund GmbH & Co. KGaA 100 % 100 % 100 % 100 % 100 % 100 % 33.33 % BVB Stadion- BVB Merchandising BVB Event & Catering besttravel dortmund BVB Fußballakademie BVB Asia Pacific Orthomed GmbH management GmbH GmbH GmbH GmbH GmbH Pte. Ltd. Consolidated tax group 66.67 % Orthomed Management 9th match day 5th match day UCL 28 November 2020 2 December 2020 BVB - 1. FC Köln 1:2 BVB - Lazio Rom 1:1 127 127
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund ORGANISATION OF MANAGEMENT AND CONTROL Borussia Dortmund Geschäftsführungs-GmbH, the The following chart shows the structures and general partner of Borussia Dortmund GmbH & Co. responsibilities as between Ballspielverein KGaA, is responsible for management and Borussia 09 e.V. Dortmund, Borussia Dortmund representation of the latter. Borussia Dortmund GmbH & Co. KGaA and Borussia Dortmund Geschäftsführungs-GmbH is for its part represented Geschäftsführungs-GmbH: by Managing Directors Hans-Joachim Watzke (Chairman), Thomas Treß and Carsten Cramer; its sole shareholder is Ballspielverein Borussia 09 e.V. Dortmund. Ballspielverein Borussia09e.VV.. Dortmund Executive Council of Board Economic Affairrss Borussia Dortmund elelectsects appointsappoints elelectsects Geschäftsführungs-GmbH Members’ Meeting (General Partner) appoints and monitappoints and monitororss Advisory Board Managing Directorrss Borussia Dortmund GmbH & Co. KGaA (Consisting of members of the Executive Board and Council of Economic Affairs and non-voting, associated members) Supervisory Board No right of appointment, onllyy right of supervision elel ectsects Annual General Meeting The Supervisory Board of Borussia Dortmund Supervisory Board authorised to adopt internal GmbH & Co. KGaA, which is appointed by the rules of procedure or to define a list of transactions Annual General Meeting, has limited rights and requiring its consent on behalf of the general duties. It has no authority with respect to matters partner. Rather, such rights and duties are vested involving personnel, i.e., no authority to appoint in the governing bodies of Borussia Dortmund and dismiss managing directors at Borussia Geschäftsführungs-GmbH, namely its Advisory Dortmund Geschäftsführungs-GmbH or to Board and the Executive Committee created by the stipulate the terms of their contracts. Nor is the Advisory Board. 10th match day 6th match day UCL 5 December 2020 8 December 2020 Eintracht Frankfurt - BVB 1:1 St. Petersburg - BVB 1:2 128
GROUP MANAGEMENT REPORT The members of the Company's Supervisory Board waived 33.33% of their Supervisory Board remuneration in financial year 2020/2021. Their names, occupations and their further responsibilities on other management bodies are listed below: SUPERVISORY BOARDof Borussia Dortmund GmbH & Co. KGaA Gerd Christian Bernd Peer Ulrich Bjørn Dr. Reinhold Silke Bodo Judith Pieper Kullmann Geske Steinbrück Leitermann Gulden Lunow Seidel Löttgen Dommermuth Chairman Deputy Chairman (until (since 19 November 2020) 19 November 2020) FULL REMUNERATION PAYABLE FOR 2020/2021(EUR '000) (received by the members after waiving all remuneration in accordance with IAS 24.17 (a) in the 2020/2021 financial year). 48 36 24 9 24 24 24 24 24 15 OCCUPATIONS(as at 30 June 2021) Retired; former Chairman of Managing Senior Advisor Chairman of the Chief Executive Medical Director Senior Executive Chair of the CDU Managing Managing the Executive partner of to the Manage- Managing Boards Officer of of Praxisklinik at Dortmunder parliamentary partner of JUVIA Director of Board of Evonik Bernd Geske ment Board of of group parent PUMA SE, Bornheim, Stadtwerke AG group in the state Verwaltungs Stadt- Industries AG, Lean ING-DiBa AG, companies of the Herzogenaurach Bornheim and Managing parliament of GmbH, Cologne Parfümerie Essen Communication, Frankfurt am SIGNAL IDUNA Director of North Rhine- Pieper GmbH, Meerbusch Main Group, Dortmund Hohenbuschei Westphalia, Herne (SIGNAL Kran- Beteiligungsge- detective chief kenversicherung sellschaft mbH, inspector Kriminalhaupt- a.G., Dortmund; Westfalentor 1 ( SIGNAL IDUNA GmbH and kommissar) Lebensversiche- Dortmund Logi- (ret.), public rung a.G., stik GmbH, all in administration Hamburg; Dortmund graduate SIGNAL IDUNA Unfallversiche- rung a.G., Dortmund; SIGNAL IDUNA Allgemeine Ver- sicherung AG, Dortmund) OTHER FUNCTIONS on statutory supervisory boards and comparable German or foreign supervisory bodies of commercial enterprises (as at 30 June 2021) Member of the Chairman of the Member and Chairman of the Member of the Advisory Board Supervisory Chairman of the Board Salling Advisory Board of Borussia Board of Clear- Supervisory Group A/S, of Borussia Dortmund VAT Aktiengesell- Board of Braband, Dortmund Geschäfts- schaft, Berlin Dortmunder Denmark (since Geschäfts- führungs-GmbH, Volksbank eG, 6 March 2020); führungs GmbH, Dortmund Dortmund; Member of the Dortmund Member and Supervisory Chairman of the Board of Tchibo Supervisory GmbH, Hamburg Board of Sana Kliniken AG, Ismaning 11th match day 12th match day 12 December 2020 15 December 2020 BVB - VFB Stuttgart 1:5 Werder Bremen - BVB 1:2 129
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Within Borussia Dortmund GmbH & Co. KGaA there "Human Resources", "Organisation", "Finance" and are seven independent functional areas below the "Legal & IR". The responsible employees and the management level, namely, "Sports", "Sales, functional organisational areas of which they are Marketing & Digitalisation", "Communications", in charge are shown in the chart below: Functional areas of Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund STRATEGY MANAGEMENT CORPORATE & CULTURE SECURITY Hans-Joachim Watzke(Chairman) Thomas Treß Carsten Cramer CORPORATE STRATEGY, CORPORATE COMMUNICATIONS, SPORTS, FINANCE, ORGANISATION, LEGAL & IR SALES, MARKETING, DIGITALIZATION COMMUNICATIONS, HUMAN RESOURCES WOMEN’S FOOTBALL Michael Zorc Sascha Fligge Corinna Borgmann Dr. Christian Hockenjos Mark Stahlschmidt Dr. Robin Steden SPORT COMMUNICATIONS HUMAN RESOURCES ORGANISATION FINANCE LEGAL & IR Professional Communications Recruiting Match Organisation Accounting Investor Marketing & Brand Football Strategy Relations Scouting Corporate Employer Security Payroll Legal Digital, CRM & E-Business Communications Branding Amateurs Sport Onboarding Accreditation Financial Compliance International & New Business Communications &Offboarding Control Youth International HR Development Associations Financial Corporate Responsibility and National PR Reporting Youth Academy Publications HR Management Event Management Risk Ticketing – Match Operations Management Editing Occupational Safety Fan Services Equity Merchandising and Content & Health Protection Investments Management Reception Insurance BVB TV Fleet Management Property Event & Catering Management IT 13th match day DFB cup 2nd round 18 December 2020 22 December 2020 Union Berlin - BVB 2:1 Eintr. Braunschweig - BVB 0:2 130 130
GROUP MANAGEMENT REPORT INTERNAL MANAGEMENT AND CONTROL SYSTEM Sports management categories of match operations, advertising, TV Going forward, we will continue to focus on achieving marketing and net transfer income, as well as success on the pitch under a budget tuned for operating expenses, which can be lowered through performance. To accomplish this objective, Borussia disciplined management. Dortmund will continue to put together a competitive team in the future with an emphasis on young, A key goal of the management of Borussia Dortmund promising players. is to achieve a lasting increase in profitability along with bolstering its financial strength. In addition to Our sporting objectives will be aligned with our steadily improving the operating result (EBITDA) and financial circumstances, meaning that the makeup the result from operating activities (EBIT), a positive of the squad and its cost structure will continue to free cash flow is therefore the most important depend on calculable variables on the income side. financial objective of our Company. We seek to Qualifying for and participating in international optimise these cash flows. competitions has provided the financial flexibility to reinforce the squad – with the goal of also In the coming years, Borussia Dortmund will establishing a presence in European competitions concentrate on generating steady revenue growth going forward. while limiting operating expenditure. The decisive factor in this respect will be qualifying for Financial management international competitions. Borussia Dortmund uses the result from operating activities and the operating result as indicators for Capital management measuring the economic success of the Company. The capital management responsibilities of the Borussia Dortmund derives its result from operating Company's management involve stabilising and activities from earnings before interest and taxes increasing the equity of Borussia Dortmund. One of (EBIT) and its operating result from earnings before the main ways in which we will reach these objectives interest, taxes and depreciation and amortisation is by improving the operating result and making (EBITDA). The Company continuously monitors both effective investments. the operating result (EBITDA) and the result from The management uses the result from operating operating activities (EBIT) of the segments on the activities (EBIT), the operating result (EBITDA) and basis of monthly comparisons of the budgeted and the net profit/loss for the year to manage the actual figures. To optimise these indicators, the main Company. factors to be leveraged are revenue, which can be additionally improved in the major revenue 14th match day 15th match day 3 January 2021 9 January 2021 BVB - VfL Wolfsburg 2:0 RB Leipzig - BVB 1:3 131 131
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund CORPORATE STRATEGY Borussia Dortmund pursues the objective of • Germany continues to be one of Europe's largest defending its position in the top flight of the football markets, although it lags behind certain Bundesliga and sees itself well on the way to other European markets, such as the UK, in accomplishing that goal. terms of media exploitation rights. This means that Germany has major growth potential. As the first listed German football company, we have expanded our financial base by exclusively marketing All financial activities of Borussia Dortmund are the rights to SIGNAL IDUNA PARK as well as by geared towards the target groups relevant to a utilising and maintaining the Borussia Dortmund football club: its fans, members and business brand more effectively. The Company will continue partners. Products and services should be tailored to focus heavily on its core business of professional to these groups as closely as possible. Borussia football and the sport's classic revenue pillars: TV Dortmund intends to use the brand potential at its marketing, advertising, match operations, transfer disposal to take full advantage of the commercial deals, conference, catering and miscellaneous opportunities inherent in professional club football activities, and merchandising. Borussia Dortmund is at an international level. confident that it will be able to further stabilise and expand its position for the following reasons: Its current business strategy can principally be summarised as follows: • Borussia Dortmund is in sporting terms one of the most successful, well known and popular • Sustainably adjusting athletic prospects German football clubs with an outstanding fan • Intensifying the promotion of up-and-coming base that gives it one of the highest average talent spectator numbers compared to other European • Increasing fan involvement football clubs. • Utilising and maintaining the Borussia • A football enterprise can only be financially Dortmund brand successful if it enjoys sporting success over the long term. In order to make its financial performance less dependent on short-term sporting success in the future, Borussia Dortmund will push ahead further with the national and international marketing of its brand name. 16th match day 17th match day 16 January 2021 19 January 2021 BVB - 1. FSV Mainz 05 1:1 Bayer Leverkusen - BVB 2:1 132
GROUP MANAGEMENT REPORT Financial performance and business development Advertising plays a key role in this context. Over are dependent on footballing success. Since the years, advertising has grown to become one footballing success is difficult to plan, the best of the Company's largest income categories. In that management can do is to create a solid contrast to central TV marketing, where foundation for success. Investments, particularly distribution is already clearly defined in advance, in the professional squad, are therefore a Company management is itself able to determine necessary prerequisite for achieving footballing the requirements for and direction of sponsoring objectives such as qualifying for the UEFA activities and, if necessary, modify the strategy Champions League. However, in order to meet implemented as circumstances change. The key financial objectives, planned investments and figures for the sponsoring segment were already decisions must under certain circumstances be budgeted for the coming years based on postponed to the extent these would only be commitments from SIGNAL IDUNA Group (ending possible by incurring new debt. Moreover, a player 2026) and PUMA International Sports Marketing might be sold based on financial considerations B.V. (ending 2028), the Company's chief partners, in cases where this would not have happened had as well as the two primary sponsors 1&1 the decision been made purely on the basis of Telecommunication SE and Evonik Industries AG sporting criteria. (both ending 2025). Thus a conflict arises between the pursuit of Revenues from international competitions are more financial interests and sporting interests, i.e., a difficult to budget for, since they depend solely on situation in which sporting considerations and the team’s athletic performance. financial considerations may be at odds with each other, particularly if the club continually falls short of its sporting goals. In such cases, management weighs the opportunities and risks to find a solution that does adequate justice to the Company's strategic objectives. 18th match day 19th match day 22 January 2021 30 January 2021 Borussia M’gladbach - BVB 4:2 BVB - FC Augsburg 3:1 133
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund DIVIDEND POLICY Two key indicators are assessed to shape Borussia In order to remain competitive, Borussia Dortmund Dortmund's dividend policy. intends to use its net income for the year and cash On the one hand, Borussia Dortmund assesses its and cash equivalents primarily for investments. earnings situation, and in the financial years before The primary focus is on strengthening the COVID-19 it generated a net profit. The Company professional squad, modernising SIGNAL IDUNA reported a net loss for the current financial year, PARK and expanding the training ground in in particular on account of the continuing effects Dortmund-Brackel. Despite these investments, it of the COVID-19 pandemic. is Borussia Dortmund's aim to continue distributing On the other hand, free cash flow is used to ensure a dividend to its shareholders every year, provided that cash flows from operating activities are it generates a net profit. sufficient to cover investments. Dividend distribution 30,000 20,000 10,000 2019/2020 0 2015/2016 2016/2017 2017/2018 2018/2019 -10,000 -20,000 -30,000 -40,000 -50,000 Net income/loss for the year (EUR ’000) Dividend distributed (EUR ’000) DFB cup 1/8 final 20th match day 2 February 2021 6 February 2021 BVB - FC Paderborn 3:2 n. V. Sportclub Freiburg - BVB 2:1 134
GROUP MANAGEMENT REPORT SEPARATE NON-FINANCIAL GROUP REPORT Please see the 2020/2021 Sustainability Report the meaning of §§ 315b, 315c in conjunction with with regard to the disclosures within the meaning §§ 289c to 289e HGB, which was subject to a limited of §§ 289b, 315b of the German Commercial Code assurance engagement. As at 29 October 2021, the (Handelsgesetzbuch, "HGB"). The Sustainability Sustainability Report will be published online at Report includes the Group's non-financial https://verantwortung.bvb.de/en.* statement for the 2020/2021 financial year within CORPORATE GOVERNANCE DECLARATION PURSUANT TO § 289F HGB Pursuant to § 289f of the German Commercial Code In accordance with § 289b (2) sentence 2 HGB, (Handelsgesetzbuch, "HGB"), listed German stock Borussia Dortmund GmbH & Co. KGaA is exempt corporations (Aktiengesellschaften) must prepare a from preparing a non-financial statement. corporate governance declaration. This declaration includes the declaration of conformity with the The separate non-financial Group report is published German Corporate Governance Code, and presents online at https://aktie.bvb.de/eng/Corporate-Governance/ the corporate governance practices and the working sustainability-report.* principles of the management and the Supervisory Board and its committees. The corporate governance declaration is not included in the management * In accordance with the statutory requirements, KPMG AG Wirtschaftsprüfungsgesellschaft has neither substantively report and is instead published online at audited the cross-references nor the information to which the https://aktie.bvb.de/eng/Corporate-Governance/ cross-references refer. Corporate-Governance-Declaration. * 21th match day 1/8 final, first leg UCL 13 February 2021 17 February 2021 BVB - TSG Hoffenheim 2:2 FC Sevilla - BVB 2:3 135
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund POSITION OF THE COMPANY DEVELOPMENT OF PERFORMANCE INDICATORS Development of financial performance indicators In the 2020/2021 financial year, Borussia Result from operating activities (EBIT) Dortmund's financial performance indicators – In the past financial year, the result from operating revenue, consolidated total operating proceeds, activities amounted to EUR -72,093 thousand and result from operating activities (EBIT), operating the net loss for the year totalled EUR 72,810 result (EBITDA), net profit/net loss for the year, cash thousand. The report on expected developments flows from operating activities and free cash flow dated 30 June 2020 forecast a net loss for the year – were as follows: of between approximately EUR 70,000 thousand and EUR 75,000 thousand. The result from Revenue operating activities (EBIT) for the full 2020/2021 Revenue amounted to EUR 334,171 thousand in the financial year was forecast to exceed the net loss reporting period. In its Annual Report as at 30 June for the year by approximately EUR 2,000 thousand. 2020, Borussia Dortmund forecast that revenue would decline by approximately 5% for financial Cash flows year 2020/2021 overall, based on the comparative Cash flows from operating activities amounted to figure for financial year 2019/2020. EUR 15,947 thousand in the 2020/2021 financial year. Consolidated total operating proceeds Borussia Dortmund forecasted as at 30 June 2020 Consolidated total operating proceeds (total revenue that it would generate cash flows from operating plus gross transfer proceeds generated) amounted activities of approximately EUR 34,000 thousand for to EUR 358,577 thousand in the reporting period. the full 2020/2021 financial year. As at 30 June 2020, Borussia Dortmund had forecast that consolidated total operating proceeds Free cash flow would amount to approximately EUR 388,000 Free cash flow in the 2020/2021 financial year thousand in financial year 2020/2021. amounted to EUR -46,075 thousand. The report on expected developments for the 2020/2021 financial Operating result (EBITDA) year dated 30 June 2020 had forecast free cash flow EBITDA amounted to EUR 38,950 thousand in the past of EUR -34,000 thousand. financial year; the forecast for the full 2020/2021 financial year in the Annual Report dated 30 June 2020 had projected EBITDA to exceed the result from operating activities (EBIT) by approximately EUR 100,000 thousand. 22th match day 23th match day 20 February 2021 27 February 2021 FC Schalke 04 - BVB 0:4 BVB - Arminia Bielefeld 3:0 136
GROUP MANAGEMENT REPORT Borussia Dortmund Group (IFRS) EUR '000 2020/2021 2019/2020 Revenue 334,171 370,196 Consolidated total operating proceeds 358,577 486,884 Operating result (EBITDA) 38,950 62,992 Result from operating activities (EBIT) -72,093 -43,138 Net profit/net loss for the year -72,810 -43,953 Cash flows from operating activities 15,947 -362 Free cash flow -46,075 -51,131 Development of non-financial performance indicators Borussia Dortmund's strategic corporate governance At the same time, BVB is a big proponent of engaging is centred around its fans, and their active with its fans via its numerous digital platforms, such involvement is fundamental to the club's business as the fan podcast, virtual Fan Council meetings and strategy. Especially in times of uncertainty and BVB's official Twitch channel. social isolation, it is crucial that we maintain and BVB wants to focus more closely on youth work strengthen communication with our most important going forward, and develop specific activities and stakeholder group: our fans. initiatives for young people across various educational levels. In addition, the club will We discussed the current situation with fans, fan continuously set aside tickets for young people clubs and fan groups on many occasions in the past that are awarded in a transparent manner. season. These talks demonstrated how much our fans continue to value the sport, the club and most Progress is also being made in developing the of all the footballing community. club's girl's and women's football programme. Doing things "the Dortmund way", the ambitious BVB wants to understand the impact that the goal is for the BVB women's team to leave local pandemic is having on Borussia Dortmund's fan league football behind as they aim higher. The culture. To this end, an academic study was carried team around the team is already in place. World out in March which gave fans the opportunity to champion and Olympic gold medallist Annike share their perception of the current status of the Krahn and ex-BVB pro Christian Timm are on club, its fan community and professional football board in an advisory capacity, while Thomas in general. Sulewski has been named coach for the new team. DFB cup quarter final 24th match day 2 March 2021 6 March 2021 Borussia M’gladbach - BVB 0:1 Bayern München - BVB 4:2 137
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund True to the guiding principle "Borussia unites!", programmes for football fans run by Borussia BVB once again underscored its continuing Dortmund and Feyenoord. The project's closing commitment to combating discrimination by meeting is planned for September 2021. adopting the International Holocaust Remembrance Alliance's (IHRA) working definition of anti-Semitism This year will see BVB restart the historical and in October 2020, an important step in the fight political educational trips that it has run for fans against anti-Semitism. On 27 January 2021, DAZN since 2008 and for employees since 2011. They had broadcast episode 5 "Never forget" of its been suspended for a year due to the COVID-19 documentary series "BVB 09 – Stories who we are". pandemic. The episode poignantly demonstrates Borussia In addition to being a socially responsible club, Dortmund's commitment to important social Borussia Dortmund also takes its environmental issues by championing projects that promote a responsibility seriously. With this in mind, the club remembrance culture and historical and political formed additional cross-disciplinary project groups education. This also includes the club's active role that will increasingly tackle the issues related to in the "Changing the Chants" project, which is the use of resources in match operations and funded by the European Union. Over the past two mobility. In cooperation with Dortmund's municipal years, Borussia Dortmund has worked with utilities authority (DSW21), BVB is expanding its Feyenoord Rotterdam, Fare Network and the Anne KombiTicket combined match/transport ticket for Frank House to devise and strengthen strategies both individual matches and season tickets. They that football clubs can use to educate fans about will now cover the entire state of North anti-Semitic behaviour in stadiums. Changing the Rhine-Westphalia, thereby increasing the use of Chants revolves around two separate educational public transport and helping to cut CO2 emissions. 1/8 final, second leg UCL 25th match day 9 March 2021 13 March 2021 BVB - FC Sevilla 2:2 BVB - Hertha BSC 2:0 138
GROUP MANAGEMENT REPORT The tickets had previously only been valid within During the pandemic, BVB has opted not to reduce the VRR transport authority region. Borussia its employees' working hours and, during the Dortmund is also helping make employees' daily lockdowns, provided job rotation opportunities commute more environmentally friendly by within its various fields of activity. You can find all offering the chance to lease a bicycle via BVB on you need to know about sustainable development a subsidised basis. at BVB in our 2020/2021 Sustainability Report, which will be available from 29 October 2021 at The beginning of 2021 also saw the launch of https://verantwortung.bvb.de/en.* "Sustainable Merchandising", a project to develop a sustainability concept for BVB merchandising based on a prototype product. It will cover the * The content accessible via the link does not constitute part of this Group management report. In accordance with the statutory prototype's entire production chain, from materials, requirements, KPMG AG Wirtschaftsprüfungsgesellschaft has through processing, down to logistics and re-use. neither audited the cross-references nor the information to which the cross-references refer. In addition, BVB has launched further projects to promote environmental protection and biodiversity, first and foremost using the club mascot, Emma, in educational programmes for children and young people. Examples include the BVB educational garden in the allotments behind SIGNAL IDUNA PARK and designing a nature trail in cooperation with SIGNAL IDUNA and the City of Dortmund on land belonging to the SIGNAL IDUNA Group. 26th match day 27th match day 20 March 2021 3 April 2021 1. FC Köln - BVB 2:2 BVB - Eintracht Frankfurt 1:2 139
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund RESULTS OF OPERATIONS During the reporting period (1 July 2020 to 30 June the result from operating activities (EBIT) amounted 2021), Borussia Dortmund generated revenue of EUR to EUR -72,093 thousand (previous year: EUR -43,138 334,171 thousand (previous year: EUR 370,196 thousand). thousand), EUR 36,025 thousand less than in the During the current reporting year, the operating result previous year. Net transfer income amounted to EUR (EBITDA) amounted to EUR 38,950 thousand (previous 15,401 thousand (previous year: EUR 40,160 thousand). year: EUR 62,992 thousand). Borussia Dortmund generated a net loss of EUR Earnings before taxes amounted to EUR -73,152 72,810 thousand during the 2020/2021 financial year thousand (previous year: EUR -46,583 thousand); (previous year: net loss of EUR 43,953 thousand). Borussia Dortmund Group– Revenue in percent 0.17 % 2.31 % 9.77 % 31.89 % 55.86 % Conference, catering, miscellaneous TV Marketing Match operations Merchandising Advertising Quarter final, first leg UCL 28th match day 6 April 2021 10 April 2021 Manchester City - BVB 2:1 VfB Stuttgart - BVB 2:3 140
GROUP MANAGEMENT REPORT REVENUE TREND Borussia Dortmund generated revenue of EUR severe restrictions as a result of the COVID-19 334,171 thousand in the 2020/2021 financial year, pandemic. By contrast, income from match representing a decrease of EUR 36,025 thousand operations, merchandising, and conference, or 9.73%. Income from advertising and TV catering and miscellaneous decreased in financial marketing increased year on year despite the year 2020/2021. Borussia Dortmund Group– Revenue in EUR '000 400,000 36,553 350,000 7,745 32,640 33,292 300,000 250,000 186,655 169,836 200,000 150,000 100,000 106,577 98,005 50,000 32,510 0 554 2020/2021 2019/2020 Conference, catering, miscellaneous TV Marketing Match operations Merchandising Advertising Quarter final, second leg UCL 29th match day 14 April 2021 18 April 2021 BVB - Manchester City 1:2 BVB - Werder Bremen 4:1 141
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund The performance of the individual revenue items is Income from advertising described in the following: In the financial year ended, Borussia Dortmund Income from match operations increased its advertising revenue by 8.75% to EUR 106,577 thousand (previous year: EUR 98,005 Income from match operations decreased by EUR thousand), representing a share of 31.89% of total 31,956 thousand to EUR 554 thousand in financial revenue. year 2020/2021. Advertising income increased despite the Income from match operations for domestic restrictions on hospitality services and match day competitions declined by EUR 19,875 thousand to advertising due to the COVID-19 pandemic. Borussia EUR 544 thousand. Dortmund hosted 24 home matches in the season While the 2019/2020 season had seen twelve home ended, of which 21 were played behind closed doors matches played to almost sell-out crowds at due to the COVID-19 pandemic. Against this SIGNAL IDUNA PARK, during the 2020/2021 season backdrop, match-day advertising could not be the national and regional restrictions put in place compensated for fully and practically no advertising in response to COVID-19 meant fewer spectators was shown in hospitality. were permitted in stadiums, and then only for the first Bundesliga fixtures. Of the 17 Bundesliga home The increase was due primarily to the new matches hosted by Borussia Dortmund, only three agreements with the two primary sponsors Evonik (against Borussia Mönchengladbach, SC Freiburg Industries AG and 1&1 Telecommunication SE as and FC Schalke 04) were open to spectators, who well as with the equipment supplier Puma SE that were limited in number. were entered into on 1 July 2020. The holder of the stadium's naming rights, SIGNAL IDUNA, the sleeve The income from domestic and international cup sponsor, Opel Automobile GmbH, and the ten competitions decreased by EUR 10,648 thousand, Champion Partners continue to contribute greatly and all of these matches were held behind closed to income from advertising. Borussia Dortmund also doors. added another sponsor for its youth programmes: adesso SE. Borussia Dortmund generated income of EUR 9 thousand from friendlies and proceeds generated Furthermore, advertising income includes by the club's other teams in financial year bonuses for the third-place Bundesliga finish, 2020/2021 (previous year: EUR 1,442 thousand). which directly qualified the team for the group Unlike in previous years, the pandemic prevented stage of the UEFA Champions League in the the squad from travelling to Asia or the United 2021/2022 season, for reaching the quarter-finals States for preseason tours. of the UEFA Champions League in financial year 30th match day 31th match day 21 April 2021 24 April 2021 BVB - Union Berlin 2:0 VfL Wolfsburg - BVB 0:2 142 142
GROUP MANAGEMENT REPORT 2020/2021, for competing in the DFL Super Cup year (previous year: EUR 67,420 thousand). The at the beginning of the past season, and for increase of EUR 11,278 thousand is due to the reaching the final and winning the DFB Cup. higher performance bonus, since Borussia Dortmund amassed four wins and one draw in the Income from TV marketing group stage. In the previous year, Borussia Dortmund only managed three wins and one draw. In financial year 2020/2021, income from TV In addition, Borussia Dortmund reached the marketing once again represented the highest quarter-finals of the UEFA Champions League for share of revenue (55.86%) and increased by EUR the first time since 2017, although the team was 16,819 thousand year on year to EUR 186,655 knocked out of the competition following two thousand. TV marketing income from both domestic defeats to Manchester City. and international cup competitions rose. The income from TV broadcasts of Bundesliga matches Unlike in the previous year, Borussia Dortmund remained virtually unchanged. failed to win the DFL Super Cup, its first competitive match of the current financial year. Borussia Income from domestic TV marketing amounted to Dortmund reached the final of the DFB Cup, where EUR 97,826 thousand, up EUR 139 thousand against the team chalked up a resounding victory against the prior-year reporting period. RB Leipzig in Berlin. Income from domestic cup competitions thus amounted to EUR 10,131 Only 89.83% of the increase in distribution thousand (previous year: EUR 4,729 thousand). announced prior to the pandemic actually materialised at the end of the financial year. The Merchandising payouts for the 2020/2021 season were made on the assumption that match operations would Income from merchandising decreased by 1.96% continue uninterrupted in 2020/2021, the season to EUR 32,640 thousand in the past 2020/2021 would come to an orderly close and the marketing financial year. In the previous year, EUR 33,292 partners would pay the budgeted amounts in full thousand had been recognised for this item. The and on time. Since the distribution amount decrease in this revenue stream was only moderate fluctuated in the 2020/2021 reporting period, DFL despite the months-long closure of the fan shop in Deutsche Fußball Liga GmbH was ultimately forced compliance with the statutory provisions put in to reduce the income with respect to the planned place to contain the spread of the COVID-19 international TV marketing payouts. pandemic. The highest revenue growth was recorded at the online shop in Germany, which Income from international TV marketing for many customers visited as an alternative to making competing in the UEFA Champions League purchases in person. amounted to EUR 78,698 thousand in the financial DFB cup semifinal 32th match day 1 May 2021 8 May 2021 B Leipzig 3:2 BVB - Holstein Kiel 5:0 BVB - R 143 143
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Conference, catering and miscellaneous income, which includes the Evonik miscellaneous income Football Academy, rental and lease income and BVB TV, decreased by EUR 9,431 thousand to EUR Conference, catering and miscellaneous income 3,201 thousand. This was due primarily to the lack amounted to EUR 7,745 thousand (previous year: of advance booking fees due to the restrictions on EUR 36,553 thousand) and also included revenue spectators imposed in response to the COVID-19 from advance booking fees, rental and lease income pandemic. As well as the lack of advance booking and release fees for national team players. fees for match day ticket sales, there was a shortfall in advance booking fees for season tickets Conference and catering income, which comprises after Borussia Dortmund decided as in the income generated by the hospitality areas, public previous year that it would initially suspend season catering services and events, decreased by EUR ticket sales at the end of the season given the 12,655 thousand from EUR 13,316 thousand in the inability to predict how the pandemic would previous year to EUR 661 thousand. The lack of develop. Likewise, the Football Academy was spectators at 21 of 24 home matches and fewer prevented from running courses (either national customers at the first three Bundesliga home or international) for months. A further reason for fixtures meant that only limited revenue was the decline in income was the fact that this year's generated, both in public and hospitality catering. DFL Super Cup was held in Munich. Moreover, In addition, most private events outside of match unlike in the previous year, no (four-part) operations such as private celebrations, corporate documentary series about Borussia Dortmund was events or trade fairs were cancelled in the past marketed in the past financial year. financial year. Where permitted, stadium tours were restricted to a small number of visitors. The release fees for national team players declined by EUR 443 thousand from EUR 2,711 In the reporting period from 1 July 2020 to 30 June thousand in the previous year to EUR 2,268 2021, advance booking fees, postage and thousand. DFB cup final 33th match day 13 May 2021 16 May 2021 RB Leipzig - BVB 1:4 1. FC Mainz 05 - BVB 1:3 144 144
GROUP MANAGEMENT REPORT Income from fees for players on loan and training In the previous financial year, the players Maximilian compensation decreased by EUR 6,279 thousand Philipp transferred to FC Dynamo Moscow, Abdou year on year to EUR 1,615 thousand. This mainly Diallo to Paris Saint-Germain, Alexander Isak to Real related to the loans of the players Leonardo Sociedad, Julian Weigl to Benfica Lisbon, Paco Balerdi to Olympique Marseille, Jeremy Toljan to Alcácer to Villarreal CF, Jacob Bruun Larsen to TSG U.S. Sassuolo and Sergio Gómez to SD Huesca. Hoffenheim, Sebastian Rode to Eintracht Frankfurt The players Dženis Burnić, Jeremy Toljan, Ömer and Shinji Kagawa to Real Zaragoza. These Toprak, André Schürrle and Marius Wolf had been transfers also generated subsequent transfer loaned out in the previous year. proceeds and loan fees. Net transfer income The residual carrying amounts and transfer costs amounted to EUR 9,005 thousand (previous year: Net transfer income declined by EUR 24,759 EUR 76,528 thousand). thousand to EUR 15,401 thousand. Other operating income Transfer proceeds amounted to EUR 24,406 thousand (previous year: EUR 116,688 thousand). Other operating income increased by EUR 1,182 thousand year on year to EUR 10,377 thousand. As This resulted from the transfers of Jeremy Toljan in the previous year, this included primarily income to U.S. Sassuolo, Ömer Toprak to Werder Bremen from provisions, insurance reimbursements, and Dženis Burnić to 1. FC Heidenheim. Borussia unclaimed refunds, a reimbursement for granting Dortmund also generated subsequent transfer contractual marketing rights, and subsidies. Other income. Furthermore, Mario Götze left to join PSV operating income includes prior-period income in Eindhoven on a free transfer. the amount of EUR 2,608 thousand (previous year: EUR 5,033 thousand). 34th match day 22 May 2021 BVB - Bayer Leverkusen 3:1 145 145
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund DEVELOPMENT OF SIGNIFICANT OPERATING EXPENSES Cost of materials In the reporting period, personnel expenses related to the retail and administration areas decreased by Cost of materials decreased by EUR 2,803 thousand EUR 612 thousand year on year to EUR 29,325 to EUR 19,589 thousand. thousand. This figure included the cost of goods sold for both BVB Event & Catering GmbH and BVB Merchandising Personnel expenses in relation to amateur and GmbH. The decline is due mainly to BVB youth football amounted to EUR 11,398 thousand Merchandising GmbH's decrease in revenue. BVB during the current 2020/2021 financial year Event & Catering GmbH's cost of materials likewise (previous year: EUR 12,144 thousand). continued to decline due to the prohibition on events imposed during the pandemic. Depreciation, amortisation and write-downs Personnel expenses Depreciation, amortisation and write-downs rose In financial year 2020/2021, personnel expenses by EUR 4,913 thousand to EUR 111,043 thousand amounted to EUR 215,650 thousand (previous year: in the reporting period. EUR 215,157 thousand). During the period from 1 July 2020 to 30 June 2021, Personnel expenses for the professional squad intangible assets – which consist primarily of increased by 1.07% year on year. The base salary Borussia Dortmund's player registrations – were rose by EUR 2,472 thousand. Performance-based amortised in the amount of EUR 97,440 thousand bonuses amounted to EUR 28,742 thousand (previous year: EUR 88,285 thousand). (previous year: EUR 29,363 thousand) and comprised annual bonuses and performance-based Furthermore, EUR 4,810 thousand in write-downs bonuses for winning the DFB Cup, for finishing third of intangible assets to their fair values were place in the Bundesliga with 64 points, for reaching recorded (previous year: EUR 3,903 thousand). the quarter-finals of the UEFA Champions League and for qualifying directly for the group stage of the Depreciation and write-downs of property, plant and 2021/2022 UEFA Champions League. equipment declined from EUR 13,942 thousand to EUR 13,603 thousand. 146 146
GROUP MANAGEMENT REPORT Other operating expenses Financial result Other operating expenses decreased by EUR 33,250 The financial result for financial year 2020/2021 thousand from EUR 119,010 thousand in the amounted to EUR -1,059 thousand (previous year: previous year to EUR 85,760 thousand in the EUR -3,445 thousand) and breaks down as follows: reporting period. The investment income amounted to EUR 81 Expenses from match operations decreased by EUR thousand (previous year: EUR -1 thousand). 10,255 thousand to EUR 36,956 thousand (previous year: EUR 47,211 thousand). This was due mainly Interest income amounted to EUR 287 thousand to lower catering and match day expenses, as only (previous year: EUR 287 thousand) and related three home matches were played for the 2020/2021 primarily to compounding and restatements season, with severely restricted stadium capacity. relating to subsequent measurement in accordance with IFRS 9. Advertising expenses decreased by EUR 16,281 thousand. Despite the increase in advertising income, Interest expenses amounted to EUR 1,427 thousand the newly signed agency licensing agreement with (previous year: EUR 3,731 thousand) and comprised the marketing firm SPORTFIVE Germany GmbH mainly financing charges of EUR 559 thousand and made it possible to significantly reduce the agency EUR 772 thousand in restatements connected with commission payable. remeasurements in accordance with IFRS 16. Transfer expenses declined by EUR 450 thousand to EUR 4,204 thousand. These expenses primarily Tax expense include loan and training compensation. Administrative expenses decreased during the EUR 342 thousand in tax income (previous year: tax financial year ended by EUR 2,545 thousand to EUR income of EUR 2,630 thousand) was reported under 22,807 thousand. A slight increase in IT expenses was taxes on income in the financial year. This related offset by significantly lower travel, representation and primarily to trade tax reimbursements received. In event expenses. the previous year, this item included gains on the recognition of unutilised loss carryforwards. Other expenses decreased by EUR 3,742 thousand to EUR 4,599 thousand. This reduction was caused mainly by lower allowances on receivables and lower losses on disposals of fixed assets as well as lower expenses for office supplies. 147 147
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund ANALYSIS OF CAPITAL STRUCTURE DEVELOPMENT AND PERFORMANCE OF THE BUSINESS As at 30 June 2021, total assets amounted to EUR to assets held for sale (EUR 2,341 thousand) and 450,519 thousand, representing a decrease of amortisation and write-downs (EUR 92,630 EUR67,448 thousand as compared to 30 June 2020. thousand). Non-current assets decreased by EUR 51,652 Property, plant and equipment increased by EUR thousand to EUR 389,903 thousand as follows: 4,465 thousand. The additions were offset by EUR 445 thousand in disposals and EUR 13,603 The EUR 36,233 thousand decrease in intangible thousand in depreciation. The additions were assets is due to additions to player registrations attributable mainly to the investments to expand (EUR 58,738 thousand) less disposals and the training ground and in the stadium. reclassifications of non-current intangible assets CONSOLIDATED STATEMENT OF FINANCIAL POSITION of Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund 30/06/2021 30/06/2020 ASSETS EUR '000 in % EUR '000 in % Non-current assets Intangible assets 193,434 42.9 229,667 44.3 Property, plant and equipment 183,454 40.7 193,037 37.3 Investments accounted for using the equity method 402 0.1 321 0.1 Financial assets 27 0.0 32 0.0 Trade and other financial receivables 10,392 2.3 12,680 2.4 Prepaid expenses 2,094 0.5 5,718 1.1 389,803 86.5 441,455 85.2 Current assets Inventories 6,806 1.5 6,754 1.3 Trade and other financial receivables 29,936 6.7 36,520 7.1 Tax assets 85 0.0 375 0.1 Cash and cash equivalents 1,725 0.4 3,317 0.6 Prepaid expenses 12,708 2.8 9,901 1.9 Assets held for sale 9,456 2.1 19,645 3.8 60,716 13.5 76,512 14.8 450,519 100.0 517,967 100.0 148
GROUP MANAGEMENT REPORT Trade receivables and other financial receivables Assets held for sale declined by EUR 10,189 decreased by EUR 8,872 thousand to EUR 40,328 thousand to EUR 9,456 thousand (previous year: thousand. This is due primarily to net proceeds EUR 19,645 thousand). received from transfers and lower receivables from advertising partners. Inventories remained virtually unchanged at EUR 6,806 thousand (previous year: EUR 6,754). Cash and cash and cash equivalents amounted to EUR 1,725 thousand as at the end of the reporting Prepaid expenses decreased by EUR 817 thousand period (previous year: EUR 3,317 thousand). to EUR 14,802 thousand (previous year: EUR 15,619 thousand). CONSOLIDATED STATEMENT OF FINANCIAL POSITION of Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund 30/06/2021 30/06/2020 EQUITY AND LIABILITIES EUR '000 in % EUR '000 in % Equity Subscribed capital 92,000 20.4 92,000 17.8 Reserves 140,750 31.2 213,560 41.2 Treasury shares -113 0.0 -113 0.0 Equity attributable to the owners of the parent company 232,637 51.6 305,447 59.0 Non-current liabilities Lease liabilities 16,819 3.7 20,054 3.9 Trade payables 37,250 8.3 69,627 13.4 Other financial liabilities 208 0.1 0 0.0 Deferred tax liabilities 0 0.0 0 0.0 Deferred income 0 0.0 230 0.0 54,277 12.1 89,911 17.3 Current liabilities Financial liabilities 56,900 12.6 8,031 1.6 Provisions 2,333 0.5 0 0.0 Lease liabilities 4,241 1.0 4,350 0.8 Trade payables 64,103 14.2 67,432 13.0 Other financial liabilities 30,901 6.9 39,115 7.6 Tax liabilities 40 0.0 40 0.0 Deferred income 5,087 1.1 3,641 0.7 163,605 36.3 122,609 23.7 450,519 100.0 517,967 100.0 149
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund As at 30 June 2021, Borussia Dortmund's equity trade payables also fell, declining by EUR 3,329 amounted to EUR 232,637 thousand. This thousand to EUR 64,103 thousand. This was mainly corresponds to an equity ratio of 51.64% (previous attributable to liabilities for transfer deals that year: 58.97%). Subscribed capital remained level were settled in the financial year. at EUR 92,000 thousand. Other financial liabilities decreased by EUR 8,214 Changes in current and non-current liabilities thousand to EUR 30,901 thousand. The decrease were as follows: was due primarily to paying variable remuneration to the professional squad. Borussia Dortmund reported liabilities of EUR 217,882 thousand as at 30 June 2021 (previous Tax liabilities remained level at EUR 40 thousand. year: EUR 212,520). This represents an increase of EUR 5,362 thousand. Deferred income decreased by EUR 1,216 thousand to EUR 5,087 (previous year: EUR 3,871 Changes in total current and non-current liabilities thousand). were as follows: As at the end of the reporting period, Borussia Lease liabilities decreased from EUR 24,404 Dortmund reported EUR 56,900 thousand in thousand to EUR 21,060 thousand in the reporting overdraft facilities, which it had drawn down, period. The repayments of lease liabilities of EUR under current financial liabilities. 4,386 thousand were partly offset by moderate The EUR 2,333 thousand (previous year: EUR 0 increases relating to the fan shop and vehicle fleet. thousand) in provisions recognised as at 30 June 2021 included provisions for litigation and liability Non-current trade payables decreased by EUR risks relating to legal proceedings, and was 32,377 thousand to EUR 37,250 thousand. Current expensed. ANALYSIS OF CAPITAL EXPENDITURE In the past financial year, Borussia Dortmund enhanced in stages over the period up to 2022. This invested EUR 58,738 thousand in intangible assets. involved acquiring further adjacent land and The entirety of this amount was invested in the opening a new fitness area. Other steps are player base. currently being implemented. Cash payments for property, plant and equipment Secondly, Borussia Dortmund is currently designing during the same period amounted to EUR 3,414 its new fan and youth centre which will be located thousand and primarily include investments in the on the Strobelallee. The centre will offer a variety Brackel training ground in connection with the of programmes intended above all to improve project to expand BVB's training centre. communication with the fans and to establish it as a type of community centre for fans. The focus of future investments will firstly continue There are also plans to further develop and expand to be on the project to expand BVB's training centre. the infrastructure and the areas in and around The training ground and youth academy will be SIGNAL IDUNA PARK. 150
GROUP MANAGEMENT REPORT ANALYSIS OF LIQUIDITY As at 30 June 2021, Borussia Dortmund held drawn down as at the end of the reporting period. unrestricted cash funds of EUR 1,725 thousand. Borussia Dortmund also had access to an Cash flows from operating activities amounted to additional EUR 120,000 thousand in overdraft EUR 15,947 thousand (previous year: EUR -362 facilities, of which EUR 56,900 thousand had been thousand). NET ASSETS Borussia Dortmund's total assets decreased from Trade receivables and other financial receivables EUR 517,967 thousand to EUR 450,519 thousand. decreased by EUR 8,872 thousand to EUR 40,328 Fixed assets declined by EUR 45,740 thousand to thousand. EUR 377,317 thousand. Prepaid expenses decreased by EUR 817 thousand to EUR 14,802 thousand. OVERALL ASSESSMENT OF FINANCIAL POSITION AND PERFORMANCE AND BUSINESS DEVELOPMENT Borussia Dortmund ended the 2020/2021 financial The ongoing COVID-19 pandemic continued to year with a net loss for the year of EUR 72,810 weigh heavily on profitability and ultimately thousand. earnings in the 2020/2021 season. The effects of the pandemic are particularly clear in match Taking into account the net loss for the year, the operations and conference, catering and equity ratio is calculated at 51.64%. As at 30 June miscellaneous. The transfer business has also 2021, Borussia Dortmund held unrestricted cash taken a major hit. Given this, business development funds of EUR 1,725 thousand. At the end of the during financial year 2020/2021 was less than reporting period, Borussia Dortmund had access satisfactory. to an additional EUR 120,000 thousand in overdraft facilities, some of which had been drawn down. 151
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund REMUNERATION REPORT The structure of the management remuneration remuneration. Any additional non-cash or ancillary system is defined and regularly reviewed by the benefits granted relate primarily to insurance Executive Committee of the Advisory Board. The benefits at standard market conditions and the Executive Committee of the Advisory Board of provision of a company car. The Company does not Borussia Dortmund Geschäftsführungs-GmbH is offer any stock option plans or similar incentive also responsible for setting the remuneration of plans. The remuneration components provided are the individual executives and for defining the reasonable both in and of themselves and taken as appropriate amount of remuneration. The a whole (see Note 36 to the consolidated financial appropriate remuneration level is defined in statements). particular on the basis of the specific executive's responsibilities and performance, as well as on the Remuneration of the Supervisory Board is basis of Borussia Dortmund's financial position, governed by Article 13 of the Articles of Association, performance and future prospects. pursuant to which each member of the Supervisory Board receives fixed remuneration amounting to Executive remuneration consists of two EUR 24 thousand; the Chairman receives twice that components: a fixed amount and a variable amount and the Deputy Chairman one and a half component. The fixed component is stipulated by times that amount. Value added tax is reimbursed contract, takes into account the sporting success to the members of the Supervisory Board. achieved and is paid out in twelve equal monthly instalments. The variable component is based on The disclosures required by § 285 no. 9 HGB are the business trend and is dependent on net income included in the notes to the consolidated financial for the year before tax and the managing directors' statements under Notes 37 and 39. 152
GROUP MANAGEMENT REPORT THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM AS IT RELATES TO THE ACCOUNTING PROCESS The key features of the accounting process-related • The departments involved in the accounting internal control and risk management system process fulfil quantitative and qualitative employed by Borussia Dortmund can be described requirements. as follows: • The completeness and accuracy of the • Borussia Dortmund distinguishes itself through accounting data is checked regularly by its clear organisational and corporate reviewing samples and conducting plausibility structures as well as its control and monitoring tests, both manually and by means of software structures. employed for this purpose. • The internal control and risk management • The principle of dual control is adhered to at all systems as they relate to the accounting points in the Company's accounting-related process form an integral part of operational and processes. strategic planning processes. • The management receives reports at scheduled • Responsibilities have been clearly assigned in intervals throughout the process or more all areas of the accounting process (such as frequently if necessary. financial accounting and management cost accounting). • The Supervisory Board deals with the key accounting issues, risk management and the • Reporting is carried out in monthly, quarterly, audit assignment, among other things. semi-annual and annual intervals, whereby a distinction is made between matters requiring The accounting process-related internal control and immediate action by the Company and those risk management system, the key features of which involving Company strategy. are described above, ensures that transactions can be correctly recorded, prepared and accounted for • The computer systems used in accounting are in the financial statements. protected against unauthorised access. • An adequate system of internal guidelines has been established and is updated as needed. 153
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund OPPORTUNITY AND RISK REPORT RISK MANAGEMENT Borussia Dortmund's divisions are exposed to a The currency and detail of the regular risk reports wide variety of risks that are inseparably linked to given to the governing bodies of Borussia the conduct of business. Dortmund keep them informed of the Group's current risk profile. The sections below focus on possible future developments or events which could cause Borussia This ensures that the Company's decision-makers Dortmund to perform either better than expected have adequate flexibility to be able to monitor and (opportunities) or worse than expected (risks). The manage risks. respective impact of opportunities and risks are generally presented separately and are not offset This year, the risk inventory procedure implemented against one other. Generally speaking, risks and with the objective of cataloguing and assessing all opportunities are assessed over a mid-length term risks has again proven effective as a management of two years. All risks of loss to which the Company tool. Risks are identified, discussed and reviewed is exposed (individual and cumulative risks) are in consideration of current circumstances in monitored and managed within the risk one-on-one meetings or plenary sessions in order management system. to assess the current likelihood of their occurring The consolidated group for risk management and their potential consequences. purposes is identical to the consolidated group in the consolidated financial statements. Each risk is given a qualitative rating of between 1 and 4, with 1 indicating a low level of risk and 4 A functioning control and monitoring system is indicating a very high level of risk. essential for identifying risks early and for assessing A risk impact assessment is carried out both before and counteracting them. It is the responsibility of the and after the identification and development of internal risk management system to monitor and countermeasures to reduce the risk. The risk control such potential risks. impact assessments are weighted before and after The risk management system is based on principles countermeasures based on a ratio of 1:2, with and guidelines laid out by the management. These weighting prioritising the probability and principles and guidelines are designed to facilitate the consequences of each risk after countermeasures early identification of any irregularities so that take effect. In mathematical terms, the risk impact appropriate countermeasures can be taken assessment (before countermeasures) is derived immediately. In order to ensure the highest possible by adding the probability of the risk and its level of transparency, risk management has been consequences before countermeasures, while the incorporated into the organisational structure of the assessment (after countermeasures) is derived by Group as a whole. All departments and divisions are adding the probability of the risk and its required to immediately report any Company-relevant consequences, and multiplying this figure by two. changes in the risk portfolio to the management. The risk management system is also an integral component of the overarching planning, steering and reporting process. 154
GROUP MANAGEMENT REPORT Example Categorisation of risks Before countermeasures: In accordance with the recommendations under Probability 2 2+3=5 5 German Accounting Standard DRS 20, and to ensure Consequences 3 ease of reference, Borussia Dortmund divides its After countermeasures: risks into main categories. The nine defined main Probability 1 categories (strategic risk, personnel risk, Consequences 2 (1+2)x2=6 6 macroeconomic risk, competitive risk, liquidity risk, TOTAL 11 interest rate risk, credit risk, resources risk and ecological risk) are presented and explained in greater detail below. If the assessment of an individual risk falls within All 61 risks that could have a direct impact on the the top third of the scale (a score of 17 to 24), Company fall within these categories. In comparison Borussia Dortmund classifies it as a high-priority with the previous year (62 risks), the total number risk. Particular attention is paid to such risks, since was reduced by one risk that no longer meets the they are capable of having a material adverse and criterion of materiality. long-term effect on the Company's assets, liabilities, Three new risks (legal transgressions by professional financial position and profit or loss. There are players, lack of transfers/willingness to transfer, and currently 26 (previous year: 23) risks that are IT cyber risks) were added to the 23 risks that had classified as high priority. been classified as high-priority in the past period. No The currency and detail of the regular risk reports high-priority risks were removed. given to the governing bodies of Borussia Further to the notes on opportunities and risks in Dortmund keep them informed of the Group's the 2019/2020 Annual Report, the focus during the current risk profile. current reporting period (financial year 2020/2021) This ensures that the Company's decision-makers was primarily on the persistent impact of the have adequate flexibility to be able to monitor and COVID-19 pandemic, which continues to impact manage risks. almost all risk categories. The following is a discussion of the 26 high-priority risks in their respective categories. 155
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Category 1 – strategic risk fails to qualify for any international competition at We define strategic risk as risk arising from all. The objective of a corresponding worst case incorrect business decisions, poor implementation scenario is not to predict the future but rather to of decisions or the inability to adapt to changes in provide an overview of various contingencies and the corporate environment. Strategic risk also their effects and to better assist the management arises from unexpected changes in market in its strategic planning. conditions and the environment in which the Company operates, which bring with them negative Share price performance describes the consequences for the Company's assets, liabilities, performance of a security, an index, shares or a financial position and profit or loss. portfolio, but also the performance of the management of an investment fund with respect to This category includes four high-priority risks: its investment objectives. The Group is very The risk that financial planning is dependent on conscious of the risk associated with the sporting success describes the risk that failing to performance of Borussia Dortmund's shares and achieve planned sporting objectives could led to a continually analyses the Company's value on the lack of adequate income or proceeds. To account capital market and the consequences of it being for any and all developments both on and off the undervalued. A key component of this risk is the pitch, the Company revises and updates its impact of these factors on potential corporate action longstanding financial and liquidity planning at in the future and the Company's appeal to business least three times per year based on the latest partners. This risk is countered through continual premises. It is all the more important for planning communication with the capital market. The shares projections to be modified on a permanent basis, have been listed on the Prime Standard segment especially during the COVID-19 pandemic in which of the Frankfurt Stock Exchange since May 2014 the external conditions are changing faster than and are also admitted to trading on the SDAX. ever before. In addition to the income statement During the current financial year, Borussia and the statement of financial position, this also Dortmund again held several roadshows in Europe includes the development of Borussia Dortmund's and the United States, either on site or in virtual liquidity. It allows the management to monitor the form on account of the COVID-19 pandemic, in an current and future financial position of the effort to keep existing investors up to date and bring Company at all times and to take any necessary any prospective investors on board. action. Due to developments with regard to income from international TV marketing in particular, the Borussia Dortmund considers the third risk in this amount that a club is certain to receive for a given category to be the risk of conflicting goals of subsequent season varies greatly from a sporting and commercial success. It is important second-place finish to a seventh-place finish in the that Borussia Dortmund continues to pursue Bundesliga. Qualifying for the UEFA Champions balanced business policies with the aim of League guarantees much higher proceeds than ensuring that the club remains competitive and qualifying for the UEFA Europa League or UEFA also focussed on meeting the Group's performance Europa Conference League, let alone if the team indicators. Borussia Dortmund will continue to 156
GROUP MANAGEMENT REPORT avoid financial risks that could arise on account of loss of system or data integrity (e.g., data corruption uncertain sporting successes. As in previous years, by means of malware), compromising IT system or Borussia Dortmund further counters this risk by data availability (e.g., internal business interruption, setting strict budgets for the individual divisions outages in external communications). On the other and undertaking corporate planning on a revolving hand, IT cyber risks arise from the opportunity for basis using various planning scenarios. large volumes of information to be disseminated Furthermore, the Company also uses planning widely, cheaply and at breakneck speed (e.g., e-mail scenarios to calculate various earnings and campaigns against the Company, calls on social liquidity effects potentially presenting additional media to boycott the Company) and from social opportunities for financial investment or shortfalls. hacking. Borussia Dortmund seeks to counter these It is of fundamental importance to permanently IT cyber risks by reducing the risk of occurrence modify the planning projections and to balance the through investments in data security and data need to remain competitive on the pitch and protection. That includes expanding the firewall to ensure economic stability and success on the one protect against external attacks and launching hand with the corresponding countermeasures Project Security, a general initiative to identify and that have already been taken to reduce the address potential security vulnerabilities. likelihood of the risk occurring on the other, especially during the COVID-19 pandemic in which Category 2 – personnel risk the external conditions are changing faster than The importance of human resources to companies ever before. The transfer business remains a key is growing. The Company's success is largely action area for Borussia Dortmund and is one of dependent on the commitment, motivation and the most important sources of income in the skills of both its sporting personnel and business of football. Achieving high sums for managerial/administrative staff. transfers often involves a loss of sporting quality within the squad, but after carefully weighing up This category currently includes five high-priority all of the athletic and business aspects it is possible risks: that value-driven transfers may also be concluded contrary to the Company's sporting interests. Protecting confidential information is a subject that remains in the public eye. Never before has data A new high-priority risk in this category are IT cyber protection posed so many challenges. In particular, risks, which are closely linked with protecting the increasing internationalisation of day-to-day confidential information. They are generally business operations necessitates a detailed understood as the risks posed while navigating a understanding of the respective data protection digital and interconnected world (cyberspace). In regulations applicable in individual countries. In specific terms, on the one hand IT cyber risks addition, technical progress harbours many pitfalls, involve the possibility of wilful and targeted cyber especially in relation to online data. Hackers stepped attacks on data and IT systems. The consequences up their attacks in recent years, releasing the of these attacks include: compromising data personal data of politicians, celebrities and others. confidentiality (e.g., data losses, data espionage), Action has to be taken to prevent the unauthorised 157
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund access and manipulation of data. Confidential data human life takes precedence – that goes without that is processed, transferred or stored online must saying – but the economic consequences for the be encrypted. The data should remain encrypted businesses involved have also been immense. and protected even if the online application is There thus continues to be a risk of travel and other compromised. The IT security officers, the heads of accidents, terrorist attacks and miscellaneous; the individual application areas and the data therefore, Borussia Dortmund continues to classify protection officers are responsible for initiating the this risk as high priority. data; the developers and administrators are responsible for implementation. To meet the The risk of legal transgressions by professional increased requirements for cyber security and IT in players was newly classified as a high-priority risk general, action was taken to significantly increase this financial year. It covers the risks arising due to staffing levels in IT. misconduct among members of the professional squad, including doping offences, illegal sports The risk of periods during which professional betting or inappropriate conduct on social media. players are unable to play (rest periods) can have The consequences of such misconduct may include a major impact on the Company's success, because match suspensions and reputational damage for they mean that team managers are unable to play players and the club, or legal disputes. The action the best possible team for the entire season, putting that Borussia Dortmund takes to mitigate this risk sporting goals in jeopardy. The absence of key includes systematic education and preventative players in particular is often difficult to compensate measures to raise awareness among the for. The reasons for rest periods include personal professional squad and help them avoid such match bans, injury, excessive stress or a COVID-19 misconduct. virus infection. The systematic implementation of DFL's hygiene concept minimises the risk that the Another risk newly classified as high priority is the professional squad and the coaching and support lack of willingness to transfer. The contracts that staff will contract the COVID-19 virus. Excessive players negotiate at Borussia Dortmund are stress may arise more frequently going forward, incredibly lucrative when looking at other Bundesliga particularly since the coming season will in all clubs. For players who, for whatever reason, spend likelihood see a tight schedule of fixtures due to the more time on the bench than they want, this could 2022 World Cup in Qatar (to be held in the winter) nevertheless deter them from accepting transfers. and UEFA's reform of the Champions League, which from the 2024/2025 season onwards will The ongoing COVID-19 pandemic has caused feature ten group matches instead of the previous financial difficulties for many clubs in Germany six. We deliberately ensure that back-ups are and around the world. This could increasingly lead available for every position within the squad so that to situations in which other clubs are unwilling we can absorb the absence of any individual player. to meet the salary expectations of players whom Borussia Dortmund intends to transfer, The world of sport has witnessed a number of making it difficult for Borussia Dortmund to find terrible accidents in recent years. The tragic loss of a suitable buyer. 158
GROUP MANAGEMENT REPORT Category 3 – macroeconomic risk considers a variety of scenarios and different Macroeconomic risk arises as a result of Borussia premises, and is regularly adjusted to account for Dortmund's dependence on general economic and current conditions, so that any liquidity bottlenecks political developments. can be identified early and appropriate countermeasures designed to secure liquidity can There are currently six high-priority risks that fall be initiated. This includes the extension of the under macroeconomic risks: existing overdraft facility. Borussia Dortmund considers this confirmation that The COVID-19 pandemic and the resulting restrictions it made the right choice in the previous financial year on public life as well as the associated massive to establish the outbreak of epidemics/pandemics impact this has had on the global economy, including as a stand-alone and overarching individual risk so the football sector, is still being acutely felt in as to account for the consequences of the COVID-19 Germany and throughout the world. Aside from the pandemic. Furthermore, this individual risk impacts health consequences, the COVID-19 crisis continues almost all other existing risks. to particularly impact Borussia Dortmund's streams of revenue. The functional health and safety protocol Borussia Dortmund has classified unfavourable ensured the continuation of match operations in the macroeconomic developments accompanied by 2020/2021 season and with that the generation of high unemployment and slow economic growth or TV marketing income. However, the general ban on an economic downturn, as a further risk in this spectators in stadiums meant that income from category. match operations mostly dried up. The COVID-19 The Hamburg Institute of International Economics restrictions on hospitality services and match day (HWWI) has updated its forecast for economic advertising also impacted advertising income. development in Germany. Following another Conference, catering and miscellaneous income was economic slowdown on the back of the second also weighed down due to the lack of both public lockdown imposed in the winter of 2020/2021, the catering income on match days and events organised recovery interrupted in the autumn of 2020 now by BVB Event & Catering GmbH. The global economic looks to be continuing thanks to progress in situation remains tense, and this could continue to vaccinations and the lifting of restrictions. After impact the transfer market. While Borussia economic output contracted by 4.8% in the previous Dortmund cannot rule out that transfer proceeds for year, growth of 3% is expected for both 2021 and players will continue to decline (temporarily) in 2022. An improvement is also emerging on the coming transfer windows, it nevertheless still expects labour market, initially driven by a reduction in opportunities to obtain high transfer proceeds for partial furloughs (Kurzarbeit). players in individual cases. The downturn in proceeds caused by the COVID-19 The risk of right-wing extremism is a societal risk pandemic has impacted not only individual revenue that continues to increase. Borussia Dortmund streams but also the Group's liquidity. The financial continues to stand firmly against right-wing and liquidity planning apparatus that has been in extremism and discrimination. Borussia Dortmund place at Borussia Dortmund for many years counters this risk through prevention efforts and 159
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund disciplinary action, acting in concert with a broad resolved that SV Werder Bremen could defer a network of cooperation partners. By clearly partial amount of 50% until a final ruling on the legal speaking out against racism and discrimination as dispute was issued by the Federal Constitutional well as by working to combat right-wing attitudes, Court, and to reject a fund model of any kind. anti-Semitism and hate speech and to ensure that Passing these costs on to the Bundesliga clubs the lessons of the past are never forgotten, Borussia would present an earnings and liquidity risk for Dortmund will continue to fulfil its social those clubs, Borussia Dortmund included. responsibility by ensuring that the atmosphere in and outside the stadium is welcoming, cosmopolitan The categorisation of social media activities as a and diverse. high-priority risk reflects the fact that new technologies not only have potential for development, The increased willingness of certain individuals to but also harbour risk potential. commit violence and defame and insult others at Social media is no longer used solely for stadiums is a risk that will continue to require the communicating with fans and followers, but utmost attention. Fan violence continued to plague increasingly also serves as an advertising platform football in the reporting period, even if the for marketing and sponsoring-related activities. 2020/2021 season was mostly played behind closed Borussia Dortmund has vastly expanded its digital doors. Prevention efforts and security plans put in presence, among other things due to the restrictions place in the previous season ensured that placed on direct contact with fans as a result of the potentially violent groups were identified in advance, ongoing COVID-19 pandemic. helping to prevent altercations to the greatest extent In order to safeguard the Company's image and possible. Borussia Dortmund will continue to prevent the unauthorised disclosure of internal counter this risk with enhanced security checks, information, all Borussia Dortmund employees camera surveillance, stadium bans and criminal must adhere to the Company's social media complaints. Additional stadium safety measures guidelines. will continue to include specific structural changes to entrances going forward. Furthermore, Borussia Category 4 – competitive risk Dortmund and other clubs from North Competitive risk relates to factors stemming from Rhine-Westphalia signed up to "Stadionallianz gegen competition in the domestic and international Gewalt" in the reporting period, a joint initiative with professional football business. the police to more rapidly identify and isolate perpetrators, and bring them to justice. This category includes seven high-priority risks: In connection with the dispute about who should Interruptions to match operations can have cover the costs of providing security at home immense economic ramifications because nearly matches, the clubs of the first and second all of Borussia Dortmund's streams of revenue are Bundesliga divisions voted on 3 December 2019 that dependent on or influenced by match operations. the costs incurred by the Bremen police should be The ongoing COVID-19 pandemic has underscored borne in full by SV Werder Bremen. The clubs also how economically dependent the club is on a 160
GROUP MANAGEMENT REPORT trouble-free season. The 2020/2021 season was UEFA competitions underscore the importance of completed without major scheduling issues thanks both qualifying and obtaining the requisite licences to the systematic implementation of DFL's health for international club competitions. To minimise this and safety protocol – even if the majority of matches risk therefore, compliance with the relevant were played behind closed doors. requirements and target/actual comparisons are constantly reviewed. Several European clubs have The second risk classified as high-priority in this already been disciplined and banned from category is the change in income from TV international competitions for violating Financial marketing. After DFL Deutsche Fußball Liga's Fair Play rules. In the wake of the COVID-19 crisis, auctions for TV rights led to a steady rise in income UEFA is currently consulting on potential reforms from TV marketing in recent years, the COVID-19 to its Financial Fair Play guidelines, which will likely crisis meant that the auction for the 2021/2022 to be resolved at the end of 2021. 2024/2025 seasons did not bring as much income for the clubs of the first and second Bundesliga As past experience has demonstrated, the risk of divisions as in previous rights periods; in total, EUR key players switching clubs can materialise at any 4.4 billion will be distributed in the coming four time at Borussia Dortmund. The departure of key years. Future instalments of TV marketing income players who are part of the club's future plans would to be paid by DFL Deutsche Fußball Liga to the clubs not only weaken the team at certain positions, but will continue to depend on maintaining match also as a whole. Even if success rarely rests on the operations. The functional health and safety protocol shoulders of any single player, the roster should be for the 2020/2021 season has shown that it is planned so that any unexpected departures do not possible to see a season through to a trouble-free leave holes that would need to be filled at short conclusion despite the COVID-19 pandemic. notice with players of equal quality. In an attempt to mitigate the sporting consequences of key According to UEFA, Financial Fair Play is about players switching clubs, Borussia Dortmund plans improving the overall financial health of European its roster well in advance, including by binding club football. The regulations first entered into force players to long-term contracts, uses its high in 2011 and serve as a catalogue of measures for transfer proceeds to reinvest in the squad and clubs competing in UEFA's international club employs a wide network of scouts. competitions. Clubs in breach of the regulations face penalties up to and including bans. In practice, The further risk in this category is the risk of a Financial Fair Play governs the ratio of revenue to potential stadium catastrophe. Stadium expenditures. The risk of failing to comply with the catastrophes can include fire, stampedes, potential Financial Fair Play rules and potential exclusion terrorist attacks or other acts of violence. Going from international competitions or potential forward, the Company will continue to regularly financial sanctions would have serious financial assess the quality and reliability of security staff consequences for Borussia Dortmund. The now very and specifically train them in the prevention of lucrative distributions available from UEFA and the catastrophes. Structural improvements to SIGNAL international prestige derived from taking part in IDUNA PARK for the purposes of enhancing 161
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund number is not known because mining in the region security, safeguarding and monitoring the access roads, and safeguarding the property during visits dates back to the Middle Ages. Only half of all pits on non-match days are just some of the and tunnels have been recorded. countermeasures currently being implemented by Borussia Dortmund uses the properties adjacent to the club's Security department to provide security SIGNAL IDUNA PARK for car parks or to store at the stadium. products and equipment needed for match operations. The southwest container and logistics Borussia Dortmund uses the summer break each area is located on land with uncertain topography, year to invest in SIGNAL IDUNA PARK as well as which is why sinkholes and similar subsidence for construction work and refurbishments. The cannot be ruled out. An additional expert opinion stadium has been expanded three times since has been obtained, which states that there is merely opening in 1974 with a capacity of 54,000. The a risk of the subsoil subsiding, not of collapse. This continual repair and maintenance work – the will likely result in lower costs being incurred in the paramount focus of which is always structural course of the survey and reinforcement, since it may integrity and safety – ensures that the stadium be that geogrids will no longer be necessary and fill meets the latest standards in terms of safety, dirt will instead be compressed into the ground to security and comfort. Compared to many other achieve the requisite stability. The construction Bundesliga stadiums that were constructed for the work is already underway and will likely be 2006 World Cup, SIGNAL IDUNA PARK is one of the completed in the summer of 2021. Bundesliga's oldest stadiums in use. Given that Borussia Dortmund regularly invests large sums Category 5 – liquidity risk in SIGNAL IDUNA PARK and in light of the Liquidity risks include all risks in connection with increasing requirements applicable to stadiums, cash flows and financial burdens. including with respect to spectator safety, the club has classified capital expenditures needed for This category includes four high-priority risks: SIGNAL IDUNA PARK as a high-priority risk. The ongoing COVID-19 pandemic and the associated The loss of significant financial backers and sponsors economic consequences mean that only essential due to insolvency could also have a material adverse investments are currently being made in the stadium. effect on Borussia Dortmund's liquidity in the future. Attention continues to be placed on the potential loss The risk of consequential damage arising from of significant financial backers and sponsors and the mining, which also affects SIGNAL IDUNA PARK, introduction of corresponding countermeasures represents another high-priority risk. Coal mining precisely because of the ongoing COVID-19 crisis and has ceased in Germany. While the memories the associated adverse economic consequences for remain, so do the pitfalls, because the effects of the German and global economy. Borussia Dortmund mining never fully disappear. Hardly any other continuously revises its longstanding accounts federal state is faced with as many sinkholes as receivable management system in line with the North Rhine-Westphalia. The state has some 60,000 prevailing conditions and increasing globalisation. abandoned mining shafts and tunnels. The exact The club also reviewed and implemented other risk 162
GROUP MANAGEMENT REPORT Furthermore, additional action was taken to ensure mitigation measures such as introducing upfront payments or changing payment terms. Borussia liquidity and counter any potential bad debts. Dortmund is also in close contact with its customers and partners and its sponsoring marketing firm Borussia Dortmund places utmost importance on SPORTFIVE Germany GmbH, and is maintaining a maintaining its liquidity and, after assessing its risks close and trusting relationship with them. This is also during the ongoing COVID-19 pandemic, therefore evident from the individual solutions that Borussia continues to classify the risk associated with this Dortmund has found with its partners to compensate as high priority. The financial and liquidity planning for cancelled (hospitality) services. The majority of apparatus that has been in place for many years (hospitality) services that Borussia Dortmund was considers a variety of scenarios and different unable to render due to the ongoing COVID-19 premises, and is regularly adjusted to account for pandemic were compensated for by means of other current conditions. The scenarios calculated (advertising) services, meaning that Borussia covered in particular different levels of success Dortmund's partners have asserted practically no achieved by the team and various external compensation claims. conditions attributable to COVID-19 in order to The fact that new agreements have been entered identify any liquidity bottlenecks early and to initiate into with partners despite the ongoing pandemic appropriate countermeasures designed to secure suggests that there will be no major decline in the liquidity. They included extending the existing EUR willingness of potential sponsors to seek out new 60,000 thousand overdraft facility by EUR 60,000 opportunities once the crisis is over. thousand to EUR 120,000 thousand. Due to the ongoing COVID-19 crisis, the risk of bad In order to keep the risk associated with the volume debts due to insolvency remains classified as a of player salaries as low as possible, the club high-priority risk. budgets personnel expenses with transfer deals in The COVID-19 crisis has caused one of the worst mind at the beginning of each season. The primary economic downturns for Germany and the world focus is on the fixed components of the players' in the post-war period. The ongoing pandemic will remuneration, since these are independent of the continue to impact the solvency of companies and team's performance during a given season. Variable football clubs alike. Borussia Dortmund anticipates remuneration components are also considered that problems could arise with regard to transfer when planning the budget, but generally only apply receivables. The primary objective continues to be once certain sporting objectives are achieved that keeping bad debts to a minimum and to ensure that in turn generate additional income. The personnel the Company has the liquidity it needs at all times. expenses incurred are continuously monitored, That is why it is all the more important to follow extrapolated on the basis of current circumstances, through on the action already taken, such as and reported to the management. conducting credit checks on foreign businesses or changing the general contractual framework to The Group is not presently exposed to any include high up-front payments. Dunning high-priority risks in the interest rate risk, credit procedures are likewise particularly vital. risk, resources riskand ecological riskcategories. 163
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund OPPORTUNITIES By once again directly qualifying for the UEFA sporting management offers Borussia Dortmund Champions League, the club again has the a solid basis for planning and gives those in opportunity to consolidate its standing as one of positions of responsibility the opportunity to keep Europe's top teams and to once more share in the building on the strong and trusting relationships profits distributed for participating in the lucrative they already enjoy and to unlock the potential for competition. improvement that is there to see. Borussia Dortmund's approach to its squad is one The team coalesced and found its strength in the of continuity, but it also has an eye to creating new final third of the 2020/2021 season and delivered momentum and structures in its personnel consistent and solid performances to qualify for the choices. In December 2020, Borussia Dortmund UEFA Champions League and win the DFB Cup. The parted ways with Lucien Favre, its head coach of team has truly enormous potential, and the two-and-a-half years. His erstwhile assistant challenge now is to tap into this over the entire coach Edin Terzic then led the team to victory in season. By signing Gregor Kobel, Borussia Dortmund the DFB Cup and qualification for the UEFA has gained a communicative and vocal goalkeeper Champions League. From the 2021/2022 season, who never failed to put in a strong performance in Marco Rose from Bundesliga rivals Borussia the past Bundesliga season, whether in goal, in the Mönchengladbach will take over as the new head penalty box or in passing play. He will further coach at Borussia Dortmund. Marco Rose is a team stabilise the team's defence. The healthy mix of grit, player, and the club wants him to guide Borussia leadership and young ambition in the squad as well Dortmund back to playing its trademark modern, as consistency in its management is expected to help attacking and up-front style of football. the team unlock its full potential and achieve the Edin Terzic has extended his contract through to greatest possible success on the pitch. 30 June 2025 and will be filling the newly created position of technical director. Going forward, he Borussia Dortmund has an excellent team, a fact will play a permanent part in planning the roster, that is not lost on other top European clubs. win over promising players for Borussia Accordingly, there is always the possibility of Dortmund, act as a go-between for the Youth lucrative transfers. Academy, support players on loan, and report directly to the sporting management, Michael Zorc Borussia Dortmund sees further potential in its and Sebastian Kehl. Borussia Dortmund looks youth setup, where it lays the foundation for its forward to the momentum this will create. sporting success. To this end, the club added new The contract with head of the professional squad offices for the sports management team at the Sebastian Kehl was extended early until 30 June Brackel training ground. This investment will help 2025. He will take over from Michael Zorc as to further consolidate all the areas under the sporting director from 1 July 2022. Borussia direction of the Sports department. Borussia Dortmund also extended the contract with its youth Dortmund hopes the direct proximity to the academy coordinator Lars Ricken early until 30 training ground will help it work with greater June 2025. This long-term focus at level of efficiency and purpose and further optimise its 164
GROUP MANAGEMENT REPORT agreements that are set to expire by leveraging its pipeline of talented youngsters for the senior team. In the past season, Youssoufa Moukoko, Ansgar appeal to sign lucrative new contracts. Knauff and Steffen Tigges, another three of the club's youth standouts, made the jump to the For Borussia Dortmund, the potential return of at senior side and helped the team with their youthful least some spectators to SIGNAL IDUNA PARK in exuberance. Other talented youngsters are also the 2021/2022 season is a massive opportunity, set to make the senior team. in particular to interact directly with fans. Since personal contact has been severely restricted Borussia Dortmund maintains close and during the ongoing COVID-19 pandemic, longstanding partnerships with its sponsors. During communicating digitally with fans continues to be times of crises, this continuity was also a reflection more important than ever. New digital formats of the close and trusting relationships. This is also were and will be created for this reason. This evident from the individual solutions that Borussia increased focus on digital communications affords Dortmund has found with its partners to compensate us the opportunity to strengthen the bonds our for cancelled (hospitality) services. The majority of fans have with the club despite not being able to (hospitality) services that Borussia Dortmund was attend matches, and to grow Borussia Dortmund's unable to render due to the ongoing COVID-19 fan base. This includes the 2021 Virtual Summer pandemic were compensated for by means of other Tour, with Borussia Dortmund making virtual stops (advertising) services, meaning that Borussia in nine countries across three continents between Dortmund's partners have asserted practically no 10 and 18 July 2021 to bring the club even closer compensation claims. These good relationships built to and connect with its international fan on trust and the solidarity displayed during crises communities and partners and give all fans (not also provide planning security. just) from the nine participating countries the Borussia Dortmund also believes it has good chance to immerse themselves in the world of opportunities to adequately replace sponsoring Borussia Dortmund. OVERALL ASSESSMENT OF THE RISKS AND OPPORTUNITIES With regard to the risks discussed in this report Thanks to its risk management system, Borussia and the review of the overall risk position, no risks Dortmund is in a position to comply with the were identified in the financial year under review statutory provisions on control and transparency in that could lead to a permanent or material the Company. deterioration in the financial position or financial A review of the risk situation revealed that none of performance of either the Group or its individual the individual risks defined within the risk areas companies. jeopardise the continued existence of Borussia Dortmund. 165
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund REPORT ON EXPECTED DEVELOPMENTS EXPECTED DEVELOPMENT OF THE COMPANY Borussia Dortmund finished the 2020/2021 season As reigning DFB Cup champions, Borussia Dortmund in third place with 64 points, qualifying directly for the will face FC Bayern Munich in this year's DFL Super lucrative group stage of the UEFA Champions League Cup at SIGNAL IDUNA PARK on 17 August 2021. in the coming season. Borussia Dortmund has thus qualified for an international cup competition for the twelfth time in a row since the 2010/2011 season. EXPECTED GENERAL ECONOMIC ENVIRONMENT The expected general economic environment is basic prerequisite for spectators to return. This dominated by the ongoing COVID-19 pandemic. The will take into account infection rates, which must strains of the coronavirus already rampant, in not exceed 35 cases per 100,000 residents. At particular the delta variant, are hindering efforts anything above this, a maximum of 5,000 to overcome the pandemic. Despite low infection spectators will be permitted. Those who have not rates, progress in vaccinating the population and been vaccinated or have not recovered from decisions to roll back restrictions, the pandemic COVID-19 must show a negative test result. In remains ever-present in Germany and around the addition, the health and safety protocols and social world. Professional football has been heavily distancing will remain in place. impacted too, and must continue to play its part to Even if these new rules are an improvement on overcome the crisis. the previous season, the partial return of fans to the terraces is closely linked to low infection rates. DFL Deutsche Fußball Liga GmbH has published its Thus, although higher income is expected than in fixture calendar for the 2021/2022 season. The new the previous year, it will still be a lot lower and Bundesliga season will begin in mid-August 2021, plagued by far more uncertainties than before the and Borussia Dortmund will make its début at home pandemic. to Eintracht Frankfurt. Commercially successful professional football Income from match operations are directly tied to operations are no longer limited to just regional or allowing spectators to visit SIGNAL IDUNA PARK. national levels. The team's success in these At the beginning of July 2021, Germany's federal competitions is very much a focus in all plans. states decided to permit a partial return of fans to Qualifying for the group stage of the UEFA stadiums in time for the new season. The Champions League continues to place Borussia resolution, which is initially in force until 11 Dortmund in a better financial position. Playing and September 2021, permits stadiums to operate at delivering positive performances in the competition maximum 50% capacity, with the total number of not only generates income, it can also widen the spectators initially capped at 25,000. Approval club's media and brand coverage, which promotes from the competent authorities is required as a the club's interaction with existing fans and 166
GROUP MANAGEMENT REPORT encourages others to begin following Borussia attractive and increasingly popular way to reach Dortmund. The club intends to promote these their customers worldwide. effects with a progressive internationalisation Despite the ongoing COVID-19 pandemic and the strategy that is regularly tailored to current trends. ensuing economic declines, professional football, In light of this, Borussia Dortmund aims to further particularly in Germany, has not lost any of its allure. expand and professionalise its digital presence. Borussia Dortmund also maintains close and Borussia Dortmund thereby responds to social longstanding partnerships with its sponsors. trends and to a large degree leverages the Borussia Dortmund remains just as appealing as attractiveness of the Borussia Dortmund brand. ever. As such, Borussia Dortmund will also operate The growing international awareness of the brand in a demanding market and competitive environment that this gives rise to allows the club to tap foreign in the coming season. markets. This includes the 2021 Virtual Summer Tour, with Borussia Dortmund making virtual stops Particular focus will be placed on income from TV in nine countries across three continents between marketing in connection with the expected general 10 and 18 July 2021 to bring the club even closer economic environment. to and connect with its international fan communities and partners and give all fans (not DFL Deutsche Fußball Liga GmbH has informed the just) from the nine participating countries the clubs of the first and second Bundesliga divisions chance to immerse themselves in the world of about the expected distribution volume for the Borussia Dortmund. 2021/2022 season. The announced disbursements of the TV funds will allow for a good degree of Since the 2020/2021 season, Borussia Dortmund planning. However, these plans may change at any has had two different kit sponsors. The team time due to the ongoing COVID-19 pandemic. The wears kits bearing the logo of Evonik Industries amount and timing of the disbursements depends AG in all international club competitions, friendlies in particular on partners making due contractual staged abroad and DFB Cup matches, while payments and the 2021/2022 season being seen 1&1 Telecommunication SE is the kit sponsor through to a trouble-free conclusion. for Bundesliga matches. This one-of-a-kind sponsorship model was developed as part of the Despite the massive impact of the COVID-19 internationalisation strategy and promises further pandemic, DFL Deutsche Fußball Liga GmbH sold revenue potential going forward, since it allows the German media rights for the 2021/2022 to the club and its respective partners to target 2024/2025 seasons for an average of specific markets. approximately EUR 1.1 billion per year, with the In the 2021/2022 season, Borussia Dortmund once individual disbursements increasing from season again marketed its virtual advertising boards. to season. This corresponds to total income of SIGNAL IDUNA PARK's advertising boards can be EUR 4.4 billion, exceeding the billion-euro mark digitally overlaid in the broadcast signal to target once more and continuing the high revenue level the respective TV audiences when broadcasting seen in previous years. Sky Germany secured the matches abroad. For Borussia Dortmund's rights to all live broadcasts on Saturdays, while international partners in particular, this is an DAZN will broadcast matches on Fridays and 167
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Sundays. Football will also return to free-to-air environment, Borussia Dortmund on principle only TV after a 17-year hiatus, with ProSieben/Sat1 takes transfer income into limited account in its acquiring the broadcasting rights to a total of nine planning. The transfer policy nevertheless presents live matches. Even though the agreement fell significant opportunities to generate substantial somewhat short of expectations with a decline in income. Consequently, transfer deals are always volume of around 5%, in these uncertain times it assessed against the background of the current represents the best possible degree of stability season. High transfer sums often go hand in hand and an excellent economic foundation for the with a drop in quality within the team, but it cannot coming seasons. be ruled out that value-driven transfers will be concluded contrary to the Company's sporting The COVID-19 pandemic is also affecting interests. Given Borussia Dortmund's sustained international TV marketing from UEFA competitions. success, its players are increasingly piquing the To alleviate the financial impact of the pandemic on interest of other top clubs. the clubs, the income shortfall will be spread over five seasons (from the 2019/2020 to the 2023/2024 The COVID-19 pandemic continues to affect season), which will stretch the adverse effects out transfers. Based on last year's summer transfer over a longer period. In specific terms, UEFA will window, it can be assumed that the economic make the deductions before distributing funds to uncertainty and decline in income experienced by the clubs. The planned distributions nevertheless clubs around the world will continue to temporarily remain highly attractive. reduce the transfer fees received for players. The summer transfer window is now back to normal Stadium marketing is subject to compliance with and will last from 1 July to 31 August 2021. social distancing and health and safety protocols, Despite the expected potential losses and the but this does enable stadium tours to be offered. uncertainty as the situation continues to unfold, the External events can likewise be held in the European leagues remain attractive for talented hospitality areas, albeit with restricted guest young players. Besides that, Borussia Dortmund numbers. Under the appropriate conditions, football has an excellent team. An active transfer market training courses can also be offered. The likely can be expected all the same in the summer of 2021, restrictions on selling alcoholic beverages and the with some very lucrative deals in the pipeline. A limited stadium capacities at home matches will notable example is the transfer of Jadon Sancho to weigh on the profitability of public catering. Manchester United in July 2021. This revenue stream therefore also remains affected, since it is dictated by political decisions and official stipulations. Transfer deals are an important part of Borussia Dortmund's business and, as in previous years, represent a significant source of income. However, in view of the developments in the economic 168
GROUP MANAGEMENT REPORT Overall assessment of expected performance The COVID-19 crisis continues to overshadow the them. This will shape economic planning for some economic activities of German companies, forcing time to come. Borussia Dortmund will persevere them to confront the major challenge of having to through these still difficult times thanks to the operate in a highly uncertain environment. economically sound foundation it has built up and Borussia Dortmund also expects to face significant the specific countermeasures it has taken. There economic restrictions in the coming period. Even is a high forecasting risk stemming from the if infection rates in Germany are currently at a strong dependence on political decisions and the stable low level and progress is being made in the further course of the COVID-19 pandemic. Thus, vaccination campaign, there remains an any statements regarding the future performance ever-present risk that infections will flare up and of the Company remain subject to a high degree tougher restrictions will be imposed to control of uncertainty. EXPECTED RESULTS OF OPERATIONS Expected earnings trend The club traditionally pursues a more conservative The ongoing COVID-19 pandemic continues to pose approach when factoring success on the pitch and major challenges for Germany and the world. The any associated earnings contributions into the number one priority is containing the spread of the forecast. COVID-19 virus in all facets of life. Professional football must also play its part in overcoming the In light of the high degree of uncertainty related to crisis. Borussia Dortmund GmbH & Co. KGaA also all streams of revenue, the management currently remains heavily affected. Therefore, the expectation expects to generate a net loss of between EUR is of further severe adverse effects on the earnings 12,000 thousand and EUR 17,000 thousand in the trend in financial year 2021/2022. coming 2021/2022 financial year. The projection is that matches will be played to In this planning scenario, the result from operating limited spectator numbers in the first half of the activities (EBIT) will exceed the forecast net loss for new season, with the second half seeing a return the year by the financial result and tax expense of to full capacity. As a result of the measures to approximately EUR 2,000 thousand. The operating contain the pandemic, only a limited number of result (EBITDA) would be around EUR 107,000 tickets will initially be made available per match, thousand higher than the result from operating which will continue to weigh heavily on income from activities (EBIT) due to depreciation and match operations and public catering. amortisation and would probably amount to Despite the economic uncertainties and a more between EUR 88,000 thousand and EUR 93,000 subdued transfer market, Borussia Dortmund thousand. expects there to be some very lucrative transfer deals in the offing, setting up net transfer income as a significant earnings driver. 169
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Expected revenue trend and Expected trend for significant consolidated total operating proceeds operating expenses In the past financial year, Borussia Dortmund Cost management continues to be Borussia generated revenue of EUR 334,171 thousand and Dortmund's highest priority. Operating cost-effectively consolidated total operating proceeds of EUR makes a material contribution to earnings, and 358,577 thousand. Revenue is expected to increase Borussia Dortmund is unwavering in its efforts to to approximately EUR 374,000 thousand in the achieve further optimisation. coming reporting period, due primarily to higher Personnel expenses account for approximately half income from advertising, match operations and of all operating expenditure. Portions of these conference, catering and miscellaneous. Borussia personnel expenses are also dependent upon the Dortmund forecasts consolidated total operating club's sporting success, because the professional proceeds of approximately EUR 484,000 thousand squad is compensated on the basis of its on the back of a likely rise in transfer fees. The performance, meaning that these expenditures are COVID-19 pandemic will continue to affect almost always commensurate with the club's success, all of the revenue streams of Borussia Dortmund which itself is a source of income. GmbH & Co. KGaA and its subsidiaries. The other operating expenses are also partly dependent on the number of matches and the club's success on the pitch. Any efforts at cost optimisation aside, there may therefore be an increase in operating expenses that goes hand-in-hand with a material increase in income and corresponding contribution to earnings. EXPECTED DIVIDENDS In light of the fact that the Company reports a net loss to propose to the Annual General Meeting any dividend for the financial year, the management does not intend distribution for financial year 2020/2021. EXPECTED FINANCIAL POSITION Capital expenditure and financial planning Expected liquidity trend The highest priorities for developing the club's core Due to the assumptions made, Borussia Dortmund business will be making the club more competitive expects cash flows from operating activities in and improving its infrastructure. financial year 2021/2022 to amount to approximately Due to the adverse economic consequences of the EUR 30,000 thousand. This figure is subject to change ongoing COVID-19 pandemic, Borussia Dortmund due in particular to transfer deals or if actual events is currently pursuing a rather passive transfer differ from the forward-looking statements in the policy and is focusing on sensible ways to reinvest forecast concerning the club's sporting success or transfer fees already received. Even non-essential on account of the effects of the COVID-19 pandemic. investments in SIGNAL IDUNA PARK are being Free cash flow is expected to amount to postponed until further notice. approximately EUR -26,000 thousand. In order to mitigate and avoid financial risk, Borussia Dortmund in principle pursues a conservative and extremely prudent capital expenditure strategy and will not count on any uncertain sporting successes. 170
GROUP MANAGEMENT REPORT OVERALL ASSESSMENT OF EXPECTED PERFORMANCE The consequences of the COVID-19 pandemic will the consolidated net loss for the year, and the continue to have adverse effects in the coming Company's long-term focus, Borussia Dortmund 2021/2022 financial year. Due to the positive results considers itself prepared to handle the still uncertain of operations in the financial years prior to the economic situation. The management is continuously COVID-19 pandemic, stable equity of EUR 232,637 reassessing the situation as it pertains to the thousand (which corresponds to an equity ratio of COVID-19 pandemic. approximately 51.64%) as at 30 June 2021 despite OTHER DISCLOSURES The notes contain disclosures pursuant to § 160 (1) no. 2 AktG. REPORT IN ACCORDANCE WITH § 315A (1) HGB IN THE VERSION PURSUANT TO ARTICLE 83 (1) SENTENCE 2 EGHGB The following information has been provided by the 1) Ballspielverein Borussia 09 e.V. Dortmund, Company in response to the requirements of § 315a Dortmund, Germany: 14.88% of the voting (1) sentence 1 nos. 1 to 9 HGB: rights (of which 5.53% held directly and 9.35% held indirectly by including the voting rights of 1. As at 30 June 2021, the share capital of Borussia Bernd Geske, Germany, pursuant to § 22 (2) Dortmund GmbH & Co. KGaA amounts to EUR and henceforth § 34 (2) WpHG) 92,000,000.00 and is divided into 92,000,000 no-par value ordinary bearer shares. All of the 2) Bernd Geske, Meerbusch, Germany: 14.88% of shares have been admitted to trading on the the voting rights (of which 9.35% held directly Regulated Market (Prime Standard) of the and 5.53% held indirectly by including the Frankfurt Stock Exchange and to the voting rights of Ballspielverein Borussia 09 e.V. over-the-counter markets (Open Market) in Dortmund, Dortmund, Germany, pursuant to Berlin, Bremen, Stuttgart, Munich, Hamburg and §34 (2) WpHG) Düsseldorf. Each no-par value share entitles the holder to one vote at the Annual General Meeting. According to the information available, the The Company has only one class of shares, and inclusion of the voting rights in either case all shares carry the same rights and obligations. is based on a shareholders' agreement All other rights and responsibilities attaching to concluded between Ballspielverein Borussia the Company's shares are determined in 09 e.V. Dortmund and Bernd Geske currently accordance with the German Stock Corporation for a term until 30 June 2022 (after the original Act (Aktiengesetz, "AktG"). agreement ending on 30 June 2017 was extended). The material subject matter of said 2. Restrictions affecting the voting rights or transfer agreement is the stipulation binding the parties of the shares, and to exercise their voting rights in favour of Ballspielverein Borussia 09 e.V. Dortmund with 3. Interests in the share capital of Borussia regard to Bernd Geske's shares in Borussia Dortmund GmbH & Co. KGaA exceeding 10% of Dortmund GmbH & Co. KGaA, and that Bernd the voting rights as at 30 June 2021: Geske and Ballspielverein Borussia 09 e.V. 171
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Dortmund mutually agree to inform one sentence 2 AktG), the issuance of non-voting another and vote on any changes to their preferred shares (§ 182 (1) sentence 2 AktG), respective shareholdings in Borussia Dortmund capital increases involving the disapplication of GmbH & Co. KGaA, especially pertaining to the pre-emptive subscription rights (§ 186 (3) AktG), transfer of shares. the creation of conditional capital (§ 193 (1) AktG), the creation of authorised capital (§ 202 (2) AktG) 4. There are no shares with special rights conferring – where appropriate with authorisation to disapply powers of control. pre-emptive subscription rights (§ 203 (2) sentence 2 in conjunction with § 186 (4) AktG) –, the ordinary 5. There is no control of voting rights in cases in which or simplified reduction of share capital (§ 222 (1) employees are shareholders. sentence 2 and § 229 (3) AktG) or a change of legal form (§ 233 (2) and § 240 (1) of the German 6. Because of its legal form as a partnership limited Reorganisation and Transformation Act by shares, Borussia Dortmund GmbH & Co. KGaA [Umwandlungsgesetz, "UmwG"]). In addition, does not have a management board. Instead, capital increases, other changes to the Articles management and representation of the Company of Association and other decisions of a is the responsibility of the general partner. The fundamental nature may only be resolved with provisions of Article 6 No. 1 of the Articles of the approval of the general partner in Association stipulate that Borussia Dortmund accordance with § 285 (2) sentence 1 of the AktG. Geschäftsführungs-GmbH, with registered offices The Supervisory Board is authorised in accordance in Dortmund, is to act as such an executive body with Article 12 No. 5 of the Articles of Association on a permanent basis and not for a limited period to resolve changes to the Articles of Association of time by virtue of its status as a shareholder. The which relate only to the wording thereof, in appointment and removal of managing directors particular in connection with the amount of capital of Borussia Dortmund Geschäftsführungs-GmbH increases from authorised and conditional capital. is governed by § 8 no. 6 of its shareholders' agreement and is the responsibility of the Executive 7. By virtue of the resolution by the Annual General Committee of its Advisory Board, and therefore not Meeting on 19 November 2020, the general of the Supervisory Board of Borussia Dortmund partner is authorised until 18 November 2025, GmbH & Co. KGaA. with the approval of the Supervisory Board, to In principle, changes may be made to the Articles increase the share capital by a maximum of EUR of Association of Borussia Dortmund GmbH & Co. 18,400,000 in total by issuing new no-par value KGaA only by a resolution of its Annual General ordinary bearer shares against cash contributions Meeting, which, in accordance with § 133 (1) of the on one or more occasions (Authorised Capital AktG, must be passed by a simple majority of votes 2020). The previous Authorised Capital 2014 of and also, in accordance with Article 15 No. 3 of the EUR 23,000,000 had been subject to an Articles of Association of the Company in authorisation valid until 23 November 2019. This conjunction with § 179 (1) and (2) of the AktG, by a was not utilised and as such the authorised capital simple majority of the capital represented on the expired on 23 November 2019. date of the resolution, except to the extent that mandatory statutory provisions or the Articles of 8. The Company is not a party to any material Association stipulate otherwise. A mandatory agreements which are conditional on a change of provision of statute requires that a resolution of control following a takeover bid for the issued the Annual General Meeting be passed by a shares of Borussia Dortmund GmbH & Co. KGaA. majority of three-quarters of the share capital represented on the date of the resolution in the 9. The Company is not a party to any compensation event of changes to the Articles of Association agreements that would apply in the event of a relating to the object of the Company (§ 179 (2) takeover bid. 172
GROUP MANAGEMENT REPORT STATEMENT BY THE GENERAL PARTNER ON RELATIONS WITH AFFILIATED COMPANIES The Dependent Company Report prepared by "Based on the circumstances known to us at the Borussia Dortmund GmbH & Co. KGaA pursuant to time the transactions were entered into, the § 312 AktG sets out the relations with Company received appropriate consideration for Ballspielverein Borussia 09 e.V. Dortmund as the each of the transactions set out in the report on controlling entity and its affiliated companies. The relations with affiliated companies in the financial general partner – represented by its Managing year. In all other cases, the Company has been Directors – has issued the following concluding compensated for any disadvantages having arisen. declaration: No other measures within the meaning of § 312 (1) of the AktG were either undertaken or omitted during the financial year." DISCLAIMER This Group management report contains subject to risks and uncertainties. Actual results forward-looking statements. Such statements are may differ from the statements made in this report. based on current estimates and are by nature Dortmund, 9 August 2021 Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien Borussia Dortmund Geschäftsführungs-GmbH Hans-Joachim Watzke Thomas Treß Carsten Cramer Managing Director (Chairman) Managing Director Managing Director 173
TEMENTS A TED FINANCIAL ST A CONSOLID sia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Borus 174174
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 175 175
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF FINANCIAL POSITION of Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund EUR '000 Note 30/06/2021 30/06/2020 ASSETS Non-current assets Intangible assets (1) 193,434 229,667 Property, plant and equipment (2) 183,454 193,037 Investments accounted for using the equity method (3) 402 321 Financial assets (4) 27 32 Trade and other financial receivables (5) 10,392 12,680 Prepaid expenses (15) 2,094 5,718 389,803 441,455 Current assets Inventories (6) 6,806 6,754 Trade and other financial receivables (5) 29,936 36,520 Tax assets 85 375 Cash and cash equivalents (7) 1,725 3,317 Prepaid expenses (15) 12,708 9,901 Assets held for sale (8) 9,456 19,645 60,716 76,512 450,519 517,967 EQUITY AND LIABILITIES Equity (9) Subscribed capital 92,000 92,000 Reserves 140,750 213,560 Treasury shares -113 -113 Equity attributable to the owners of the parent company 232,637 305,447 Non-current liabilities Lease liabilities (12) 16,819 20,054 Trade payables (13) 37,250 69,627 Other financial liabilities (14) 208 0 Deferred income (15) 0 230 54,277 89,911 Current liabilities Financial liabilities (11) 56,900 8,031 Provisions (10) 2,333 0 Lease liabilities (12) 4,241 4,350 Trade payables (13) 64,103 67,432 Other financial liabilities (14) 30,901 39,115 Tax liabilities 40 40 Deferred income (15) 5,087 3,641 163,605 122,609 450,519 517,967 The relevant sections in the notes to the consolidated statement of financial position can be found on the following pages: (1) – p. 197 (2) – p. 198 (3) (4) – p. 200 (5) – p. 201 (6) (7) (8) – p. 202 (9) – p. 203 (10) (11) – p. 204 | | | | | | (12) (13) (14) – p. 205 (15) – p. 206 | 176
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME of Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund EUR '000 Note 2020/2021 2019/2020 Revenue (16) 334,171 370,196 Net transfer income (17) 15,401 40,160 Other operating income (18) 10,377 9,195 Cost of materials (19) -19,589 -22,392 Personnel expenses (20) -215,650 -215,157 Depreciation, amortisation and write-downs (21) -111,043 -106,130 Other operating expenses (22) -85,760 -119,010 Result from operating activities -72,093 -43,138 Net income/loss from investments in associates (3) 81 -1 Finance income (23) 287 287 Finance costs (23) -1,427 -3,731 Financial result -1,059 -3,445 Profit before income taxes -73,152 -46,583 Income taxes (24) 342 2,630 Consolidated net loss for the year -72,810 -43,953 Items that were subsequently reclassified to profit or loss 0 0 Total comprehensive income -72,810 -43,953 Consolidated net loss for the year attributable to: - Owners of the parent: -72,810 -43,953 Total comprehensive income attributable to: - Owners of the parent: -72,810 -43,953 Earnings per share (in EUR) (basic/diluted) (32) -0.79 -0.48 The relevant sections in the notes to the consolidated statement of financial position can be found on the following pages: (3) – p. 200 | (16) (17) (18) (19) – p. 207 | (20) (21) (22) – p. 208 | (23) (24) – p. 209 | (32) – p. 218 177
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund CONSOLIDATED STATEMENT OF CASH FLOWS of Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund EUR '000 Note 2020/2021 2019/2020 Profit before income taxes -73,152 -46,583 Depreciation, amortisation and write-downs of non-current assets (21) 111,043 106,130 Gain/loss on disposals of non-current assets -16,242 -45,692 Other non-cash expenses/income 286 -4,118 Transfer costs 1,286 7,488 Interest income (23) -287 -287 Interest expense (23) 1,427 3,731 Net income/loss from investments in associates (23) -81 1 Changes in other assets not classified as from investing or financing activities -95 807 Changes in other liabilities not classified as from investing or financing activities -6,811 -18,818 Interest paid -1,427 -3,326 Income taxes 0 305 Cash flows from operating activities 15,947 -362 Payments for investments in intangible assets -88,314 -152,736 Net proceeds from transfers 29,699 108,090 Payments for investments in property, plant and equipment -3,414 -6,205 Proceeds from disposals of property plant and equipment 1 62 Proceeds from financial assets 5 20 Dividends received 1 0 Cash flows from investing activities -62,022 -50,769 Proceeds from finance raised 56,900 0 Dividend payments (9) 0 -5,519 Repayment of lease liabilities -4,386 -3,929 Cash flows from financing activities 52,514 -9,448 Change in cash and cash equivalents 6,439 -60,579 Cash and cash equivalents at the beginning of the period -4,714 55,865 Cash and cash equivalents at the end of the period 1,725 -4,714 Definition of cash and cash equivalents Bank balances and cash-in-hand (7) 1,725 3,317 Utilisation of overdraft facilities 0 -8,031 Cash and cash equivalents at the end of the period 1,725 -4,714 178
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY of Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund EUR '000 Equity Reserves attributable to Subscribed Capital Other revenue Treasury owners of the Consolidated see note (9) capital reserves reserves shares parent entity equity 1 July 2019 92,000 142,843 120,189 -113 354,919 354,919 Distributions to shareholders 0 0 -5,519 0 -5,519 -5,519 Transactions with shareholders 0 0 -5,519 0 -5,519 -5,519 Consolidated net loss for the year 0 0 -43,953 0 -43,953 -43,953 Other gains/losses incurred during the period, after taxes 0 0 0 0 0 0 Total comprehensive income 0 0 -43,953 0 -43,953 -43,953 30 June 2020 92,000 142,843 70,717 -113 305,447 305,447 1 July 2020 92,000 142,843 70,717 -113 305,447 305,447 Distributions to shareholders 0 0 0 0 0 0 Consolidated net loss for the year 0 0 -72,810 0 -72,810 -72,810 Other gains/losses incurred during the period, after taxes 0 0 0 0 0 0 Total comprehensive income 0 0 -72,810 0 -72,810 -72,810 30 June 2021 92,000 142,843 -2,093 -113 232,637 232,637 179
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund NOTES to the consolidated financial statements of Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund, for the financial year from 1 July 2020 to 30 June 2021 (hereinafter "Borussia Dortmund" or "Borussia Dortmund GmbH & Co. KGaA") BASIC PRINCIPLES General disclosures Borussia Dortmund GmbH & Co. KGaA (hereinafter commercial law required to be observed in also "Borussia Dortmund" or the "Group") has its accordance with § 315e (1) HGB. The term "IFRS" registered office at Rheinlanddamm 207 – 209, 44137 includes the recent International Financial Dortmund, Germany, and is listed in the commercial Reporting Standards (IFRSs) and the International register of the Local Court (Amtsgericht) of Dortmund Accounting Standards (IASs) issued by the under the number HRB 14217. Borussia Dortmund's International Accounting Standards Board (IASB) in professional squad has competed in the Bundesliga's London as well as the interpretations of the first division for more than four decades. Borussia International Financial Reporting Interpretations Dortmund also operates Group companies that sell Committee (IFRIC) and the Standing Interpretations merchandise, organise and host match-day and Committee (SIC). non-match-day events, and provide Internet and travel services. Borussia Dortmund also holds an Borussia Dortmund applied the following Standards, interest in a medical rehabilitation centre. Interpretations and amendments to existing The general partner, BVB Geschäftsführungs-GmbH, Standards, as adopted by the European Union, for Dortmund, is responsible for management and the first time in the 2020/2021 financial year: representation of Borussia Dortmund GmbH & Co. KGaA. Borussia Dortmund Geschäftsführungs-GmbH Amendments to References is for its part represented by Managing Directors to the Conceptual Framework Hans-Joachim Watzke (Chairman), Thomas Treß and in IFRS Standards Carsten Cramer; its sole shareholder is Ballspielverein The revised Conceptual Framework comprises a new, Borussia 09 e.V. Dortmund. overarching section entitled "Status and purpose of the conceptual framework" and eight distinct The consolidated financial statements are presented chapters. The Framework now includes chapters in thousands of euros. relating to "The reporting entity" and "Presentation The subtotals contained in the consolidated and disclosure"; the "Recognition" chapter has been statement of comprehensive income for the result expanded to include "Derecognition". from operating activities (EBIT) and the financial Substantive amendments were also made: for result are used to provide detailed information. instance, the distinction between revenues on the one hand and gains on the other is no longer drawn By a resolution dated 9 August 2021, the consolidated for income. financial statements and the Group management As part of the amendments to the Conceptual report were authorised by the Company's Framework, references to the Conceptual Framework management for submission to the Supervisory Board. in various standards have been amended. The amendments did not have any material impact on Accounting policies the consolidated financial statements of Borussia These consolidated financial statements for the Dortmund. financial year from 1 July 2020 to 30 June 2021, including the prior-year information, were prepared Amendments to IFRS 3 – Definition of in accordance with International Financial Reporting a Business Standards (IFRSs), as adopted in the European The IASB's amendment clarifies that a business Union and in force at the end of the reporting period, comprises a set of activities and assets which must and the supplementary provisions of German include, at a minimum, an input and a substantive 180
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 process that together significantly contribute to the The amendments did not have any material impact ability to create outputs. Furthermore, the definition on the consolidated financial statements of Borussia of outputs is narrowed by focusing on goods and Dortmund. services provided to customers and by removing the reference to an ability to reduce costs. The new Amendments to IFRS 16 – Covid-19- provisions furthermore include an optional Related Rent Concessions concentration test that permits a simplified IFRS 16 contains provisions relating to the assessment of whether an acquired set of activities presentation of changes in lease payments (including and assets is not a business. rent concessions) by the lessee. The lessee must The amendments did not have any material impact generally assess for each lease whether the rent on the consolidated financial statements of Borussia concessions granted constitute a modification of the Dortmund. lease and must remeasure the lease liability resulting from any such modifications. Amendment to IFRS 9, IAS 39 and The Amendment to IFRS 16 offers a practical IFRS 7 – Interest Rate Benchmark expedient in the event rent concessions are utilised. Reform This is subject to certain requirements and available These amendments were issued to address existing for a limited time. The expedient permits lessees to uncertainties in connection with the IBOR reform. account for rent concessions granted in connection Under the present hedge accounting rules, the with the COVID-19 pandemic not as lease upcoming changes in benchmark rates would in modifications but rather as though there had been many instances result in the termination of hedges. no modification to the lease. Now it is possible to continue existing hedge Borussia Dortmund has made use of the option accounting relationships for a transitional period. To enshrined in "Amendment to IFRS 16 – that end, the amendments provide for specific Covid-19-Related Rent Concessions" to not present mandatory exceptions to previous hedge accounting rent concessions granted in connection with rules, such as rules pertaining to the assessment of COVID-19 as a modification. The applied option the "highly probable" criterion in the context of relates solely to three properties leased by BVB expected transactions as part of cash flow hedges. Merchandising GmbH. In total, changes in rent The amendments did not have any material impact payments recognised through profit or loss on the consolidated financial statements of Borussia amounted to EUR 66 thousand. These were Dortmund. recognised under other operating income. Amendments to IAS 1 and IAS 8 – Amendments to IFRS 4 – Extension of Definition of Material the Temporary Exemption from The amendments create a uniform and more Applying IFRS 9 ("deferral of IFRS 9") consistent definition of materiality of information The Amendments to IFRS 4 are intended to address presented in financial statements in the IFRSs and the temporary accounting issues caused by the provide accompanying examples. In that difference in the dates of application of IFRS 9 connection, the definitions set out in the Conceptual Financial Instruments and the future IFRS 17 Framework, IAS 1, IAS 8 and IFRS Practice Insurance Contracts. In particular the temporary Statement 2 "Making Materiality Judgements" have exemption from IFRS 9 is extended until 2023 in order been aligned. to align the date of application of IFRS 9 with that of 181 181
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund the new IFRS 17. The Amendments must be applied may not be necessary to adjust or derecognise the for reporting periods beginning on or after 1 January carrying amount of financial instruments on the basis 2021. Earlier application is permitted. of the adjustments. Rather, under certain conditions, the option is available to adjust the effective interest Borussia Dortmund currently does not expect any rate to reflect the change in the alternative material impact on the consolidated financial benchmark interest rate. statements. With regard to hedge accounting, based on the amendments, it is not necessary under certain Amendments to IFRS 9, IAS 39 and circumstances to terminate a hedging relationship IFRS 7, IFRS 4 and IFRS 16 – Interest designated for hedge accounting purposes due to Rate Benchmark Reform – Phase 2 adjustments triggered by the IBOR reform. The Amendments in Phase 2 of the IBOR reform New risks arising from the reform and, in addition, project (Amendments to IFRS 9 Financial how the transition to alternative reference rates will Instruments, IAS 39 Financial Instruments: be handled must be disclosed. Recognition and Measurement, IFRS 7 Financial In addition to amendments to IFRS 9, IAS 39 and IFRS Instruments: Disclosures, IFRS 4 Insurance 7, the IASB adopted minor amendments to IFRS 4 Contracts and IFRS 16 Leases) supplement the and IFRS 16. rules set out in Phase 1 and address issues that The Amendments must be applied for reporting might affect financial reporting when an existing periods beginning on or after 1 January 2021. interest rate benchmark is actually replaced. The following aspects are affected in particular with Borussia Dortmund currently does not expect any respect to the presentation of financial instruments: material impact on the consolidated financial In the event of changes in contractual cash flows, it statements. Accounting standards issued by the IASB, but not yet adopted by the EU and not yet applied by the Company: New and amended Standards Mandatory application Expected effect Standard and Interpretations Published by IASB (IASB) on Group IFRS 17 Insurance Contracts 18 May 2017 1 January 2023 None (including amend- ments to IFRS 17) Amendments to References to the Conceptual 14 May 2020 1 January 2022 Immaterial IFRS 3 Framework Amendments to Sale or Contribution of Assets 11 September 2014/ TBA Immaterial IFRS 10 and between an Investor and its 18 December 2014 IAS 28 Associate or Joint Venture Amendment to Classification of Liabilities as 15 July 2020 1 January 2023 Immaterial IAS 1 (including Current or Non-current Deferral of Effective Date) Amendments to Property, Plant and Equipment – 14 May 2020 1 January 2022 Immaterial IAS 16 Proceeds before Intended Use Amendments to Onerous Contracts – Cost of 14 May 2020 1 January 2022 Immaterial IAS 37 Fulfilling a Contract Improvements to Amendments to IFRS 1, IFRS 9, 1 September 2020 1 January 2022 Immaterial IFRS 2018 - 2020 IFRS 16 and IAS 41 182
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 Scope of consolidated financial statements In addition to Borussia Dortmund GmbH & Co. KGaA, the consolidated financial statements include six fully consolidated subsidiary companies and one associated company accounted for using the equity method. The list of shareholdings as at 30 June 2021 was as follows: Shareholdings (30 June 2021) Registered Share capital Shareholding Equity Net profit/loss office (EUR '000) % (EUR '000) (EUR'000) as at 01/07/2020 to 30/06/2021 30/06/2021 Fully consolidated companies BVB Stadionmanagement GmbH* Dortmund 52 100.00 66 42 besttravel dortmund GmbH* Dortmund 50 100.00 144 100 BVB Merchandising GmbH* Dortmund 75 100.00 10,881 -748 BVB Event & Catering GmbH* Dortmund 25 100.00 25 725 BVB Asia Pacific Pte. Ltd. Singapur 66 100.00 220 27 BVB Fußballakademie GmbH* Dortmund 50 100.00 431 140 Investments accounted for using the equity method Orthomed Medizinisches Leistungs- und Rehabilitationszentrum GmbH** Dortmund 52 33.33 1,027 81 * Profit and loss transfer agreements are in force. Profit/loss of the Company under HGB prior to transfer to/absorption by the consolidated tax group parent. ** Included in the consolidated financial statements as at 30 June 2021 as an associate on the basis of the net profit/loss reported as at 31 December 2020. Shareholdings (30 June 2020) Registered Share capital Shareholding Equity Net profit/loss office (EUR '000) % (EUR '000) (EUR'000) as at 01/07/2019 to 30/06/2020 30/06/2020 Fully consolidated companies BVB Stadionmanagement GmbH* Dortmund 52 100.00 66 63 besttravel dortmund GmbH* Dortmund 50 100.00 144 566 BVB Merchandising GmbH* Dortmund 75 100.00 10,881 2,458 BVB Event & Catering GmbH* Dortmund 25 100.00 25 1,582 BVB Asia Pacific Pte. Ltd. Singapur 66 100.00 192 31 BVB Fußballakademie GmbH Dortmund 25 100.00 25 0 Investments accounted for using the equity method Orthomed Medizinisches Leistungs- und Rehabilitationszentrum GmbH** Dortmund 52 33.33 786 -3 * Profit and loss transfer agreements are in force. Profit/loss of the Company under HGB prior to transfer to/absorption by the consolidated tax group parent. ** Included in the consolidated financial statements as at 30 June 2020 as an associate on the basis of the net profit/loss reported as at 31 December 2019. No interim financial statements were prepared for Orthomed Medizinisches Leistungs- und Rehabilitationszentrum GmbH (Orthomed GmbH) as at 30 June 2021 due to the fact that there would be no material impact on the consolidated financial statements. Please refer to Note 33 for disclosures on transactions with related parties. 183
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Consolidation principles goodwill. If the acquisition costs are lower than the The annual financial statements of the companies fair value of the net assets of the subsidiary acquired, included in the consolidated financial statements the measurement of net assets is reviewed and the are prepared in accordance with IFRS, as adopted difference is recognised directly in the consolidated by the EU, using consistent accounting policies. statement of comprehensive income. The end of the reporting period for the consolidated The Group's interests in investments accounted for financial statements is the end of the reporting using the equity method relate to shareholdings in period of the parent company. associates. Associates are entities over which the Group has a Intercompany revenues, income and expenses, and significant influence but does not control or jointly all receivables and liabilities between companies manage the entities' financial and operating policies. included in the consolidated financial statements are eliminated on consolidation. Foreign currency translation The consolidated financial statements are presented Subsidiaries are entities controlled by the Group. The in euros. The euro is the currency of the primary Group controls an entity if the Group is exposed to or business environment (functional currency) of all has rights to variable returns from its investment in companies included in the consolidated financial the entity and if the Group has the ability to influence statements. In the single-entry financial statements those returns through its control over the entity. The of the parent and of the consolidated subsidiaries, financial statements of subsidiaries in included in the business transactions in foreign currencies are consolidated financial statements as at the date translated into the functional currency at the exchange control begins and until the time the Group no longer rate prevailing on the date of the transaction. Gains controls the entity. and losses arising on the fulfilment of such transactions and on the translation of monetary Acquired subsidiaries are accounted for using the assets and liabilities carried in foreign currencies acquisition method. The acquisition cost is equal to using the exchange rate prevailing at the end of the the fair value of the assets given, the equity reporting period are recognised in profit or loss. instruments issued and the liabilities incurred or assumed on the date of the transaction. The costs Accounting policies associated with the acquisition are recognised as an The significant accounting policies used in the expense. When consolidated for the first time, the preparation of these consolidated financial identifiable assets, liabilities and contingent liabilities statements are presented below. The policies acquired in a business combination are measured described were applied consistently for the reporting at their acquisition-date fair values, regardless of periods shown, unless otherwise indicated. the size of the minority interest. The consolidated financial statements were prepared based on amortised cost. However, Any excess of the acquisition cost over the share of derivative financial instruments are measured at equity acquired at fair value is recognised as fair value. 184
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 Intangible assets 177,200 thousand in the opening IFRS statement of Purchased intangible assets are measured at cost financial position as at 1 July 2004, in accordance less amortisation based on their expected useful with the option permitted by IFRS 1.16. This valuation lives or at the lower recoverable amount. Player is based on the opinion of an independent expert. registrations reported in these financial statements The changes in accounting policies resulted as a are measured at cost in accordance with IAS 38 and consequence of an expert review of the remaining amortised on a straight-line basis over the term of useful life of the stadium property, which since 1 the individual contracts. July 2013 will be depreciated over 40 years (previously: 19.5 years). Annual depreciation Agent and brokerage commissions and other amounted to EUR 3,034 thousand. obligations in connection with contract extensions or players acquired on free transfers are recognised Land is carried at amortised cost and impaired if as intangible assets. If these obligations are subject necessary. to certain conditions precedent, they are recognised on the date the conditions are met. The intangible Buildings and the remaining items of property, plant assets are amortised on a straight-line basis over and equipment are measured at cost less the remaining term of the individual contracts. depreciation. Repair and maintenance costs are recognised in the statement of comprehensive Computer software for commercial and technical income as expenses in the current period. applications is amortised on a straight-line basis. Depreciation is calculated in order to allocate the The useful lives and the methods of amortisation cost of items of property, plant and equipment, less are reviewed at the end of each financial year. their estimated residual carrying amounts, on a straight-line basis over their estimated useful lives. Property, plant and equipment Depreciation is generally recognised in profit or loss. Property, plant and equipment is carried at cost less Unless it is sufficiently clear that ownership will accumulated depreciation and impairment losses. transfer to the Group at the end of the lease, leased Subsequent expenses are recognised only if it is assets are depreciated over the term of the lease probable that the future economic benefits or their useful lives, whichever is shorter. Land is associated with the expenses will flow to the Group. not depreciated. The SIGNAL IDUNA PARK stadium buildings were Straight-line depreciation is based on the following measured at their fair value amounting to EUR useful lives: Useful life in years Stadium 40 Other buildings 20 to 50 Other equipment, operating and office equipment 7 to 15 The useful life and the method of amortisation are reviewed at the end of each financial year at a minimum. 185
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Impairment testing at the rate implicit in the lease. That amount is reduced The useful lives of intangible assets and items of by cumulative depreciation and amortisation and, property, plant and equipment are all finite. If there where appropriate, write-downs and impairment are specific indications of possible impairment, losses. Due to the existing lease agreements, Borussia individual assets are tested for impairment, both at Dortmund is entitled to control the use of various the level of the individual assets and at the level of assets against payment of the lease obligations. the cash-generating units. A cash-generating unit is the smallest identifiable group of assets that Financial instruments generate cash flows, which are independent of cash Financial instruments under IFRS are classified in flows generated by other assets to the furthest line with the format of the statement of financial extent possible. An impairment loss is recognised position. The table under Note 31 provides a for the amount by which the carrying amount reconciliation of the individual classes and exceeds the recoverable amount. The recoverable categories of IFRS 9 to the items of the statement amount is the higher of net realisable value and of financial position and the fair values of the value in use. If the reason for an impairment financial instruments disclosed therein. write-down recognised in prior years no longer exists, the impairment loss is reversed until the Under IFRS 9, financial assets are classified into carrying amount of the asset, net of depreciation one of three categories depending on their use: and amortisation, equals the amount that would "at amortised cost"; "at fair value through other have been determined if an impairment loss had comprehensive income (FVOCI)"; and "at fair value not been recognised. through profit or loss (FVTPL)". Financial assets are classified on the basis of the entity's business Leases model for managing the financial assets and the The Group's leases relate in particular to developed contractual cash flow characteristics of the land and leased operating and office equipment. financial assets. The business model is determined at the portfolio level and is based on Under the standard, lessees recognise a right-of-use management's intentions and past transaction asset (representing their right to use an underlying patterns. The cash flows are reviewed on the basis asset) and a lease liability (representing their of the individual assets. obligation to make lease payments). As a rule, financial assets are measured at fair value Pursuant to the exemptions under IFRS 16, Borussia upon initial recognition. Transaction costs that are Dortmund has opted to henceforth not apply the directly attributable to the acquisition of the financial accounting requirements to leases with a term of asset are included in the initial recognition. Regular 12 months or less and to leases for which the way purchases or sales of financial assets are underlying asset is of low value. accounted for at the trade date. The amount recognised in the statement of financial position is Right-of-use assets recognised in accordance equal to the maximum exposure to credit risk. The with IFRS 16 are measured at cost as at the subsequent measurement of financial assets commencement date and are generally discounted depends on their classification: 186
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 To the extent possible, Borussia Dortmund uses b) Financial assets measured at amortised cost observable market inputs to calculate the fair Financial assets that are measured at value of an asset or liability. Based on the input amortised cost are non-derivative financial factors used in the valuation techniques, the fair assets with contractual payments that are values are assigned to different levels in the fair solely payments of principal and interest on the value hierarchy: principal amount outstanding and that are held for the purposes of collecting the contractual Level 1: Quoted prices (unadjusted) in active markets cash flows, such as trade receivables and cash for identical assets and liabilities. and cash equivalents ("hold" business model). Level 2: Inputs other than quoted prices included in Cash and cash equivalents primarily include Level 1 that are observable for the asset or liability, cash-in-hand, cheques and demand deposits either directly (i.e., the price) or indirectly (i.e., can with banks, which are subject to an insignificant be derived from the price). risk of changes in value. Level 3: Unobservable inputs of the asset or liability. After initial recognition, these financial assets are If the inputs used to measure the fair value of an asset measured at amortised cost using the effective or liability can be categorised to different levels of interest method less loss allowances. Gains and the fair value hierarchy, the fair value measurement losses are recognised in the consolidated net is categorised in its entirety in the same level of the profit when the loans and receivables are fair value hierarchy as the lowest level input that is impaired or derecognised. The interest effect significant to the entire measurement. Borussia resulting from the application of the effective Dortmund recognises reclassifications between interest rate method and currency translation different levels of the fair value hierarchy at the end effects are also recognised in profit or loss. of the reporting period in which the change occurs. c) Financial assets measured at fair value a) Financial assets measured at fair value through other comprehensive income through profit or loss Financial assets that are measured at fair value Financial assets measured at fair value through through other comprehensive income are profit or loss include financial assets whose cash non-derivative financial assets with contractual flows do not comprise solely payments of payments that are solely payments of principal principal and interest on the principal amount and interest on the principal amount outstanding outstanding. This also includes financial assets and that are held for the purposes of collecting that are not held in either the "hold" or "hold and the contractual cash flows and selling financial sell" business models. Gains and losses resulting assets, for instance to meet predefined liquidity from these financial assets are recognised targets ("hold and sell" business model). This through profit or loss. category also includes equity instruments that 187
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund are not held for trading and for which the option be credit-impaired once there are objective was exercised to recognise changes in fair value substantial indications, such as the debtor's through other comprehensive income. significant financial difficulty, or knowledge of an application for bankruptcy or past due event. If the After initial measurement, the financial assets in asset appears uncollectible, it and the loss allowance this category are measured at fair value through are derecognised. other comprehensive income and any unrealised gains or losses are recognised in other comprehensive income. Upon disposal of debt Derecognition of financial assets and instruments in this category, the cumulative gains financial liabilities and losses from the fair value measurement recognised in other comprehensive income are Financial assets reclassified to profit or loss. Interest received A financial asset is derecognised when the from financial assets measured at fair value contractual rights to receive the cash flows from the through other comprehensive income are asset expire or the financial asset is transferred to generally recognised through profit or loss using another party. The latter case is deemed to have the effective interest rate method. The changes occurred when all significant risks and rewards in the fair value of equity instruments measured associated with ownership of the asset have been at fair value through other comprehensive transferred or when the control over the asset has income are not recognised through profit or loss been relinquished. and instead are reclassified to revenue reserves upon disposal. Dividends are recognised Financial liabilities through profit or loss when the legal claim to A financial liability is derecognised when the payment arises. obligation underlying this liability is discharged or cancelled or expires. In cases where an existing Impairment of financial assets financial liability is exchanged against another At the end of every reporting period, a loss allowance financial liability of the same lender with is recognised for financial assets that are not substantially different terms and conditions or if the measured at fair value through profit or loss. This terms and conditions of an existing liability are loss allowance reflects the expected credit losses materially modified, such exchange or modification for these instruments. The expected credit loss is treated as a derecognition of the original liability model consists of three stages: a loss allowance is and the recognition of a new liability. Any difference recognised at an amount equal to the 12-month between the relevant carrying amounts is expected credit losses (stage 1), at an amount equal recognised in profit or loss. to the lifetime expected credit losses if the credit risk has increased significantly since initial recognition Financial assets and liabilities are offset against one (stage 2), or in the case of credit-impaired financial another and the net balance is presented in the assets (stage 3). A financial asset is considered to consolidated statement of financial position if an 188
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 entity a) has a legally enforceable right to set off the Deferred tax assets and liabilities are measured on recognised amounts, and b) intends either to settle the basis of the tax laws adopted by the Bundestag on a net basis, or to realise the asset and settle the and ratified by the Bundesrat as at the end of the liability simultaneously. reporting period using a rate of income tax of 32.81% (previous year: 32.81%). Deferred taxes Deferred taxes are recognised for all temporary Inventories differences between the tax base of assets and Inventories consist principally of goods held by the liabilities and their carrying amounts in the IFRS subsidiary company BVB Merchandising GmbH. financial statements (liability method). However, if Inventories are measured at cost less any individual in the course of a transaction which is not a business allowances for goods whose cost may not be combination a deferred tax asset or liability arises recoverable. from the initial recognition of an asset or liability which, at the time of the transaction, affects neither Cash and cash equivalents the accounting nor the taxable profit or loss, the Cash includes cash on hand, cheques and balances deferred tax asset or liability is neither recognised with banks. Cash equivalents are short-term, highly at the date of initial recognition nor afterwards. liquid investments that are readily convertible to a known amount of cash or convertible to a known Deferred tax assets are recognised to the extent that amount of cash within a period of less than three it is probable that taxable profits will be available months and which are subject to an insignificant risk against which the temporary difference can be of changes in value. Cash and cash equivalents are utilised. Deferred tax assets are also recognised for measured initially at fair value and subsequently at tax loss carry-forwards that can be utilised in amortised cost. subsequent periods, provided it is sufficiently probable that the deferred tax asset will be Ordinary shares recoverable. The costs directly attributable to the issue of ordinary shares are deducted from equity (net of taxes, if Deferred taxes relating to items recognised directly applicable). in other comprehensive income are also recognised in other comprehensive income. Treasury shares The full amount paid for the purchase of treasury Deferred tax assets and liabilities are netted against shares is reported as an item deducted from each other where the Group has a legally equity. The Company has the right to reissue enforceable right to set off current tax assets against treasury shares purchased by it at a later date. current tax liabilities, and the deferred tax assets Proceeds of resale in excess of cost are added to and liabilities relate to income taxes levied by the capital reserves, while shortfalls are taken to same taxation authority on the same taxable entity. retained earnings. 189
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Provisions costs directly attributable to the issue of the financial Provisions must be recognised where a present legal liabilities. Other financial liabilities are subsequently or constructive obligation arises from a past event, measured at amortised cost using the effective which is expected to result in an outflow of resources interest method, where interest expense is and whose amount can be reliably estimated. measured in accordance with the effective interest rate. Please refer to Notes 11, 12, 13, 14 and 26 et The Group applies these accounting procedures seq.for information on the provision of collateral and when recognising provisions for litigation and liability further disclosures on financial liabilities. risks. The Group makes assumptions when determining the probability that liability will arise, Prepaid expenses and deferred income the amount of any claims that could be asserted and Prepaid expenses and deferred income are the duration of any legal proceedings. recognised and apportioned on a straight-line basis over their term to allocate payments made on an The recognition and measurement of provisions for accrual basis. litigation and liability risks entail uncertainty. The outcome of court proceedings in particular is difficult Recognition of income and expenses to predict. Therefore, provisions are measured on the Revenue is measured on the basis of the basis of the best estimate of the liability and are consideration set out in contracts with customers. recognised at the amount that will most likely be The Group recognises revenue when (or as) it needed to settle the obligation as at the reporting date. transfers control over a good or a service to a customer. Financial liabilities Financial liabilities falling under the scope of IFRS 9 Transfer proceeds are recognised as the net gain are allocated to the category "other financial on disposal less any residual carrying amount and liabilities". These include borrowings and are presented separately in the "net transfer income" recognised initially at fair value plus transaction item in the statement of comprehensive income. Type of product/ service Primarily Revenue recognition in accordance with IFRS 15 Match operations Ticket proceeds Revenue is recognised at a point in time (date of match). Advertising Sponsorship Revenue is recognised over time in line with the agreements term of the agreement; performance-based bonuses are recognised at a point in time. TV marketing Centralised Revenue is recognised over time; performance- national/international based bonuses are recognised at a point in time. TV marketing Merchandising Sale of fan merchandi- Revenue from fan merchandise is recognised at a se/granting of licences point in time. Revenue from licences is recognised over time in line with the term of agreement. Conference, catering, Related to match-day Revenue is recognised at a point in time. miscellaneous operations 190
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 Interest income and expenses are allocated to the conducted on the basis of euros (EUR) and pounds period to which they relate, taking into account the sterling (GBP). Currency forwards are concluded to outstanding amount of the loan and the effective hedge the cash flows. interest rate to be applied. The effective interest rate is the rate that exactly discounts estimated future Sensitivity analysis (exchange rate risks) cash payments or receipts through the expected life Sensitivity analyses are used to assess the impact of the financial instrument or, when appropriate, a of a strengthening (weakening) of the exchange rate shorter period to the net carrying amount of the as of June 30 on equity or the statement of financial asset or financial liability. comprehensive income. Operating expenses are recognised when the goods Interest rate risks or services are utilised or at the date the expenses Interest rate risks relate to the risk that the interest are incurred. rate associated with an interest-bearing financial instrument will deviate from the market interest rate Management of financial risks due to future market developments. Interest rate The Group finances itself primarily from long-term risks can therefore arise from floating-rate loans, leases, trade payables, season tickets paid for in among other things. These risks are hedged using advance and payments from sponsors. Furthermore, appropriate interest hedging instruments. Because Borussia Dortmund has EUR 120,000 thousand Borussia Dortmund currently does not have any overdraft facility at its disposal, which is secured floating-rate loans or interest rate swaps, there is against EUR 18,465 thousand in sponsorship income no necessity for hedges. and a EUR 60,000 thousand registered land charge in relation to the stadium. Sensitivity analysis (interest rate risk) The related risks arising comprise fair value risks Sensitivity analyses are used to measure how (interest-rate-related cash flow risks), liquidity risks, sensitive financial ratios are to small changes in credit risks and currency/exchange rate risks. The input parameters. Because Borussia Dortmund methods of managing the individual types of risk are currently does not have any floating-rate loans or described in the following. interest rate swaps, there is no necessity to perform sensitivity analyses. Exchange rate risk The Group is exposed to transactional foreign Liquidity risk currency risks to the extent that the quotations of The Group constantly monitors the risk of possible currencies in which disposal and acquisition liquidity bottlenecks, taking into account the transactions as well as receivables and credit probable maturities of its financial liabilities and transactions are carried out do not match the the timing of the expected cash flows from functional currency of the Group companies. The operating activities. Any liquidity risks are aforementioned transactions are primarily countered through appropriate forms of financing. 191
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund The elements of financing falling due in the short Significant decisions subject term are subject to continuous monitoring on the to judgement and estimates basis of the relevant corporate planning. Please The preparation of consolidated financial statements refer to Note 30 for disclosures on the maturities in accordance with IFRSs requires management to of contractual cash flows. make significant decisions subject to judgement and estimates and assumptions concerning the The COVID-19 crisis has led to greater focus being application of financial accounting methods and the placed on liquidity planning and management. The assets, liabilities, income and expenses recognised financial and liquidity planning apparatus that has in those statements. Actual results may deviate from been in place for many years considers a variety of these estimates. planning scenarios and different premises, and is Estimates and the underlying assumptions are regularly adjusted to account for current conditions. reviewed on an ongoing basis. Revisions of Weekly target/actual comparisons enable Borussia accounting estimates are recognised in the period Dortmund to devise and implement suitable liquidity in which the estimates were revised as well as in all management measures if necessary. The temporary subsequent periods concerned. salary waiver by the management, the players, the Information about significant decisions subject to coaching staff and senior executives, as well as the judgment made while applying accounting methods reduction of the repair and maintenance budget and that materially impact the amounts recognised in the reduction of capital expenditures have had a the consolidated financial statements are disclosed positive effect on the Company's liquidity situation. in the notes to the consolidated financial statements below. Credit risk This section on accounting policies includes detailed The Group conducts business exclusively with third disclosures about property, plant and equipment. parties of high credit standing. Concentrations of Notes 2 and 12 include detailed disclosures on credit risk can arise in the context of a player transfer finance leases. and from long-term sponsorship agreements. Such Disclosures on deferred taxes are included, inter alia, concentrations of risk are monitored in the course in Note 24 and the section on accounting policies. of the Group's operating activities. The maximum credit risk in the event of counterparty default is equal to the carrying amount of these instruments. Please refer to Note 26. 192
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 The collectability of trade receivables is assessed Operating segments based on the estimated probability of default. Borussia Dortmund has four reportable segments, Specific valuation allowances are calculated for which are responsible for the main activities of the overdue receivables using individually determined overall Group. The first segment consists of Borussia percentages. In the event that the financial situations Dortmund GmbH & Co. KGaA, which operates a of our partners worsen, the amounts actually written football club including a professional football squad down may exceed the amount of the valuation and leverages the associated revenue potential allowances recognised. This could negatively impact arising from transfer deals, catering, TV marketing, the results of operations. Please refer to Note 5 for advertising and match operations. The second disclosures on carrying amounts. segment consists of the separate merchandising business, which is carried out by BVB Merchandising Note 10 includes detailed disclosures on provisions. GmbH, a legally independent entity. The wholly owned Group subsidiaries BVB Event & Deferred tax assets are recognised in respect of tax Catering GmbH and besttravel dortmund GmbH are loss carry-forwards to the extent that it is probable also classified as reportable segments. that taxable income will be available to enable the BVB Event & Catering GmbH is responsible for loss carry-forwards to actually be utilised. In order conducting stadium tours, providing and arranging to determine the amount of the deferred tax assets for event staffing services and planning, organising, required to be recognised in this context, catering, steering and conducting events of all types management makes significant assumptions with in its own name and on behalf of third parties. respect to the expected timing and amount of future besttravel dortmund GmbH is responsible for taxable income. arranging travel by air, rail and ship, as well as package tours offered to private customers by travel The preparation of financial statements in agents. It also organises and conducts events such accordance with IFRS requires the use of judgement. as sports travel, conferences and incentive trips, and All decisions requiring the use of judgement are arranges hotel and car hire bookings. reassessed on a permanent basis and are based on Internal reporting is based on the accounting past experience and expectations as to future events provisions of the German Commercial Code that appear reasonable, given the current (Handelsgesetzbuch, "HGB"). circumstances. 193
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund OPERATING SEGMENTS Borussia BVB Merchandising BVB Event & besttravel Total Dortmund KGaA GmbH Catering GmbH dortmund GmbH EUR '000 2020/2021 2019/2020 2020/2021 2019/2020 2020/2021 2019/2020 2020/2021 2019/2020 2020/2021 2019/2020 Total revenue 323,497 442,126 33,395 34,706 2,032 17,015 887 1,373 359,811 495,220 of which match operations 554 32,510 0 0 0 0 0 0 554 32,510 of which advertising 106,609 98,038 0 0 0 0 0 0 106,609 98,038 of which TV marketing 186,655 169,836 0 0 0 0 0 0 186,655 169,836 of which transfer deals 23,148 123,732 0 0 0 0 0 0 23,148 123,732 of which merchandising 0 0 33,395 34,706 0 0 0 0 33,395 34,706 of which conference, catering, miscellaneous 6,531 18,010 0 0 2,032 17,015 887 1,373 9,450 36,398 Total revenue 323,497 442,126 33,395 34,706 2,032 17,015 887 1,373 359,811 495,220 of which external 322,338 440,802 32,640 33,292 503 11,233 42 658 355,523 485,985 of which internal 1,159 1,324 755 1,414 1,529 5,782 845 715 4,288 9,235 Financial result -262 1,915 0 0 0 0 -5 -4 -267 1,911 Share of profit from equity investments 0 0 0 0 0 0 0 0 0 0 of which profit transfer 1,007 4,669 0 0 0 0 0 0 1,007 4,669 of which loss absorption -748 0 0 0 0 0 0 0 -748 0 Net interest income/expense -521 -2,754 0 0 0 0 -5 -4 -526 -2,758 of which interest expense -642 -2,934 0 0 0 0 -5 -4 -647 -2,938 of which interest income 121 180 0 0 0 0 0 0 121 180 Depreciation, amortisation and write-downs -110,137 -105,547 -692 -1,426 -25 -34 -21 -21 -110,875 -107,028 Segment profit before taxes * -77,080 -54,281 -748 2,458 724 1,582 100 566 -77,004 -49,675 Capital expenditure 91,663 160,453 6 403 0 7 0 1 91,669 160,864 Segment assets ** 453,745 518,768 17,474 15,875 4,684 4,865 569 675 476,472 540,183 Segment liabilities 195,887 184,431 6,593 4,994 4,659 4,840 425 531 207,564 194,796 Investments accounted for using the equity method 96 96 0 0 0 0 0 0 96 96 Income from investments in associates 0 0 0 0 0 0 0 0 0 0 * Before profit or loss transfer. ** KGaA segment includes EUR 9,456 thousand (previous year: EUR 19,645 thousand) in assets held for sale. 194
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 The table below provides a reconciliation of the revenue, profit or loss before taxes, assets, liabilities and other key items for each segment: RECONCILIATIONof the segments to the statement of financial position and the consolidated statement of comprehensive income Consolidated Total Other adjustments financial statements EUR '000 2020/2021 2019/2020 2020/2021 2019/2020 2020/2021 2019/2020 Total revenue 359,811 495,220 -25,640 -125,024 334,171 370,196 of which match operations 554 32,510 0 0 554 32,510 of which advertising 106,609 98,038 -32 -33 106,577 98,005 of which TV marketing 186,655 169,836 0 0 186,655 169,836 of which transfer deals 23,148 123,732 -23,148 -123,732 0 0 of which merchandising 33,395 34,706 -755 -1,414 32,640 33,292 of which conference, catering, miscellaneous 9,450 36,398 -1,705 155 7,745 36,553 Total revenue 359,811 495,220 -25,640 -125,024 334,171 370,196 of which external 355,523 485,985 -21,352 -115,789 334,171 370,196 of which internal 4,288 9,235 -4,288 -9,235 0 0 Financial result -267 1,911 -792 -5,356 -1,059 -3,445 Share of profit from equity investments 0 0 81 -1 81 -1 of which profit transfer 1,007 4,669 -1,007 -4,669 0 0 of which loss absorption -748 0 748 0 0 0 Net interest income/expense -526 -2,758 -614 -686 -1,140 -3,444 of which interest expense -647 -2,938 -780 -793 -1,427 -3,731 of which interest income 121 180 166 107 287 287 Depreciation, amortisation and write-downs -110,875 -107,028 -168 898 -111,043 -106,130 Segment profit before taxes * -77,004 -49,675 3,852 3,092 -73,152 -46,583 Capital expenditure 91,669 160,864 59 -1,923 91,728 158,941 Segment assets ** 476,472 540,183 -25,953 -22,216 450,519 517,967 Segment liabilities 207,564 194,796 10,318 17,724 217,882 212,520 Investments accounted for using the equity method 96 96 306 225 402 321 Income from investments in associates 0 0 81 -1 81 -1 * Before profit or loss transfer. ** KGaA segment includes EUR 9,456 thousand (previous year: EUR 19,645 thousand) in assets held for sale. 195
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund The table below provides a detailed reconciliation of segment profit or loss before taxes, segment assets and segment liabilities: Segment profit or loss before taxes Segment assets Segment liabilities EUR '000 2020/2021 2019/2020 2020/2021 2019/2020 2020/2021 2019/2020 Segments total -77,004 -49,675 476,472 540,183 207,564 194,796 Profit from other companies 210 94 0 0 0 0 Other IFRS adjustments 1,454 1,772 -9,288 -5,298 0 0 IFRS 16 adjustments 1,165 305 20,280 22,459 21,060 24,404 IFRS 9 adjustments 248 -42 -26 -23 0 0 IFRS 15 adjustments -70 118 69 139 103 219 Consolidation of long-term financial assets 0 0 -9,961 -11,621 0 0 Stadium buildings plus other assets 845 845 -27,027 -27,872 0 0 Other consolidation 0 0 0 0 -10,845 -6,899 -73,152 -46,583 450,519 517,967 217,882 212,520 The Borussia Dortmund GmbH & Co. KGaA segment 172,660 thousand). In the past, no bad debts in exceeded the 10% threshold stipulated in IFRS 8.34 excess of 2.5 percent have been reported for these for two customers by a total of EUR 181,291 customers. The allocation of revenue items is thousand (previous year: two customers, EUR presented in the table below: Borussia BVB Merchandising BVB Event & besttravel Total Dortmund KGaA GmbH Catering GmbH dortmund GmbH EUR '000 2020/2021 2019/2020 2020/2021 2019/2020 2020/2021 2019/2020 2020/2021 2019/2020 2020/2021 2019/2020 Total revenue – 10% threshold 181,291 172,660 0 0 0 0 0 0 181,291 172,660 of which match operations 0 74 0 0 0 0 0 0 0 74 of which advertising 54 51 0 0 0 0 0 0 54 51 of which TV marketing 178,774 169,080 0 0 0 0 0 0 178,774 169,080 of which merchandising 0 0 0 0 0 0 0 0 0 0 of which conference, catering, miscellaneous 2,463 3,455 0 0 0 0 0 0 2,463 3,455 196
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION (1) Intangible assets EUR '000 30/06/2021 30/06/2020 Player registrations 192,442 228,314 Industrial property rights and similar rights 992 1,353 193,434 229,667 Intangible assets consist of purchased player contractual term of the significant player registrations and computer software. At the end of registrations amounted to 2.44 years (30 June the reporting period, the weighted remaining 2020: 3.30 years). Changes in intangible assets were as follows: Industrial property Player rights and EUR '000 registrations similar rights Total Cost As at 30 June 2019 276,508 4,101 280,609 Additions 226,336 457 226,793 Disposals 76,616 997 77,613 Reclassification to assets held for sale 22,039 0 22,039 As at 30 June 2020 404,189 3,561 407,750 Additions 58,738 0 58,738 Disposals 41,862 0 41,862 Reclassification to assets held for sale 3,849 0 3,849 As at 30 June 2021 417,216 3,561 420,777 Depreciation, amortisation and write-downs As at 30 June 2019 115,096 1,803 116,899 Additions 87,880 405 88,285 Disposals 19,418 0 19,418 Reclassification to assets held for sale, disposals 7,683 0 7,683 As at 30 June 2020 175,875 2,208 178,083 Additions 92,269 361 92,630 Disposals 40,965 0 40,965 Reclassification to assets held for sale, disposals 2,405 0 2,405 As at 30 June 2021 224,774 2,569 227,343 Carrying amounts As at 30 June 2019 161,412 2,298 163,710 As at 30 June 2020 228,314 1,353 229,667 As at 30 June 2021 192,442 992 193,434 197
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund (2) Property, plant and equipment EUR '000 30/06/2021 30/06/2020 Land, land rights and buildings including buildings on thir d-party land 147,014 152,769 Other equipment, operating and office equipment 36,440 40,268 183,454 193,037 Property, plant and equipment primarily relates At SIGNAL IDUNA PARK, investment centred around to the stadium, the BVB FanWelt service centre, the network infrastructure. the Rheinlanddamm plot of land and the adminis- tration building located there, and the plot of land The items of property, plant and equipment re- at Strobelallee 81. The facilities at the training cognised in the statement of financial position as ground in Dortmund-Brackel, the youth academy, a result of a lease consist of buildings and other the football academy, the catering areas at the facilities (e.g., sport pitches and outdoor grounds) stadium, the administrative headquarters and the at the Dortmund-Brackel training ground and the associated operating and office equipment constitute youth centre. further components of this item. In addition, the Wi-Fi and flood lighting system and the advertising boards in the upper stands at In the current financial year, investments were SIGNAL IDUNA PARK, as well as the Borussia made in the training ground in Dortmund-Brackel Dortmund fan shops were also included in property, and in SIGNAL IDUNA PARK. plant and equipment recognised under leases. In connection with the project to expand BVB's As at 30 June 2021, the following right-of-use training centre, the new power plant and the sprin- assets related to the corresponding items in the ting hill were completed at the Dortmund-Brackel statement of financial position: training ground. Net carrying amounts EUR '000 30/06/2021 Buildings 12,661 Operating and office equipment 1,508 14,169 198
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 In the previous year, assets had net carrying amounts The interest expense incurred for these items of EUR 22,459 thousand, of which EUR 16,523 amounted to EUR 772 thousand (previous year: EUR thousand was attributable to buildings and EUR 5,936 571 thousand) and are reported under finance costs thousand to operating and office equipment. in the consolidated statement of comprehensive income. Borussia Dortmund reported additions for right-of-use assets recognised under property, plant There is an option to purchase the training ground in and equipment amounting to EUR 1,106 thousand Dortmund-Brackel once the lease there expires in (previous year: EUR 16,830 thousand). This was offset 2023. by depreciation and write-downs of EUR 3,285 thousand (previous year: EUR 3,627 thousand). Essentially all of the risks and opportunities in connection with the leased assets have been Current and non-current lease liabilities are transferred to Borussia Dortmund. presented minus payments already made. Changes in property, plant and equipment were as follows: Land, land rights and buildings, including Other equipment, operating and offic buildings on e EUR '000 third-party land equipment Total Cost As at 30 June 2019 257,023 76,707 333,730 Additions 2,848 20,416 23,264 Disposals 0 1,124 1,124 As at 30 June 2020 259,871 95,999 355,870 Additions 351 4,114 4,465 Disposals 0 1,002 1,002 As at 30 June 2021 260,222 99,111 359,333 Depreciation, amortisation and write-downs As at 30 June 2019 101,010 48,719 149,729 Additions 6,092 7,850 13,942 Disposals 0 838 838 As at 30 June 2020 107,102 55,731 162,833 Additions 6,106 7,497 13,603 Disposals 0 557 557 As at 30 June 2021 113,208 62,671 175,879 Carrying amounts As at 30 June 2019 156,013 27,988 184,001 As at 30 June 2020 152,769 40,268 193,037 As at 30 June 2021 147,014 36,440 183,454 199
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund (3) Investments ac counted f or using the equity method The investment in Orthomed Medizinisches Leistungs- und Rehabilitationszentrum GmbH (33.33%) with its HGB financial statements as at 31 December 2020 is reported here. EUR '000 30/06/2021 30/06/2020 Non-current assets 557 641 Current assets 973 519 Non-current liabilities 165 177 Current liabilities 338 197 Net assets 1,027 786 Group's share of net assets (33.33%) 342 262 Goodwill 59 59 Dividends received after 31 December 2020 0 0 Carrying amount of interest in associate 402 321 Revenue 4,138 4,008 Profit/loss from continuing operations 242 -3 Comprehensive income (33.33%) 81 -1 Group's share of comprehensive income (33.33%) 81 -1 EUR '000 2020 2019 Cash flows from operating activities 620 118 Cash flows from investing activities -40 -168 Cash flows from financing activities -12 77 Net change in cash and cash equivalents 568 27 (4) Financial assets Long-term financial assets relate primarily to In accordance with IFRS 15, the Group recognises long-term, interest-bearing borrowings classified an asset related to products sold with a right of as loans and receivables. return on the basis of the expected returns. This corresponds to the refund liability. As at 30 June Please refer to Note 31 for information on the fair 2021, the asset for the right of return of products values of financial assets. amounted to EUR 60 thousand (previous year: EUR 139 thousand). 200
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 (5) Trade and other financial receivables Trade and other financial receivables amounted thousand to trade receivables (previous year: to EUR 40,328 thousand (previous year: EUR EUR47,204 thousand). 49,200 thousand) of which EUR 2,737 thousand Trade receivables included EUR 22,187 thousand in (previous year: EUR 1,996 thousand) related to transfer receivables (previous year: EUR 33,204 other financial receivables and EUR 37,591 thousand). Non-current EUR '000 30/06/2021 30/06/2020 Trade receivables 10,392 12,680 Non-current trade receivables are discounted using amortised cost. Please refer to Note 31 for the effective interest method and measured at information on the fair values of financial assets. Current EUR '000 30/06/2021 30/06/2020 Trade receivables 28,381 38,506 Less allowances -1,182 -3,982 Net trade receivables 27,199 34,524 Other financial receivables 2,737 1,996 29,936 36,520 Current trade receivables and other assets do not three months. Please refer to Note 31 for bear interest and mostly have a maturity of up to information on the fair values of financial assets. 201
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund (6) Inventories EUR '000 30/06/2021 30/06/2020 Inventories/merchandise 7,235 7,342 Less write-downs -429 -588 Net inventories 6,806 6,754 The carrying amount of inventories carried at fair value less costs to sell was EUR 1,292 thousand (previous year: EUR 1,645 thousand). Impairments of inventories are carried in the cost of materials. (7) Cash and cash equivalents EUR '000 30/06/2021 30/0672020 Bank balances and cash-in-hand 1,725 3,317 Bank balances have been subject to immaterial negative interest rates since financial year 2020/2021. (8) Assets held for sale Non-current assets are classified as "held for sale" were written down by EUR 4,810 thousand and "measured at the lower of carrying amount and (previous year: EUR 3,903 thousand) to their fair fair value less costs to sell" if their carrying amount value less costs to sell (meaning the gross transfer will be recovered principally through a sale proceeds to be collected less transfer costs) and transaction rather than through continuing use. reclassified as held for sale. The carrying amount By virtue of contractual arrangements and current of assets held for sale amounted to EUR 9,456 transfer market conditions relating to the pending thousand (previous year: EUR 19,645 thousand). sale of transfer rights in one of the upcoming The write-down was recognised under depreciation transfer windows, non-current intangible assets and amortisation. 202
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 (9) Equity The Company's subscribed capital amounts to EUR sales are permitted, among other purposes, for the 92,000 thousand and is divided into 92,000,000 no-par sale of shares in the form of printed physical share value shares, each representing a notional share in certificates which are freely transferable and the share capital of EUR 1.00, less the notional value tradable. In such cases, shareholders' subscription of treasury shares of EUR 19 thousand. Equity rights are excluded in accordance with § 71 (1) No. contains a presentation of treasury shares in which 8 AktG. In the period between the date of admission the nominal amount of the treasury shares is of the Company's shares to trading (31 October deducted from equity under subscribed capital on the 2000) and the end of the reporting period (30 June face of the balance sheet. Furthermore, a reserve for 2021), the Company acquired a total of 34,000 treasury shares in the same amount is also presented. no-par value shares and sold 15,100 no-par value shares off-market in the form of printed physical Pursuant to a resolution by the Annual General share certificates. The gain on disposal has been Meeting on 16 November 2004, the Company was reported separately under other operating income. authorised to acquire own shares amounting to 10% At the balance sheet date, the Company's holding of of the share capital on or before 30 April 2006. The its own securities consisted of 18,900 no-par value Company was also authorised to sell its treasury shares; no shares were disposed of during the shares either on or off the stock market. Off-market reporting period. Subscribed capital The subscribed capital of Borussia Dortmund equal rights. The shares are fully paid-up; the GmbH & Co. KGaA is divided into no-par value number of shares issued and the number of shares shares with a notional share in the share capital outstanding changed as follows: of EUR 1.00 per share, with each share bearing Treasury In Number of shares Issued shares circulation Balance as at 1 July 2019 92,000,000 -18,900 91,981,100 Change in treasury shares 0 as at 30 June 2020 92,000,000 -18,900 91,981,100 Change in treasury shares 0 as at 30 June 2021 92,000,000 -18,900 91,981,100 By virtue of a resolution by the Annual General to increase the share capital by a maximum of Meeting on 19 November 2020, the Company EUR 18,400,000.00 in total by issuing new no- was authorised until 18 November 2025, subject par value ordinary bearer shares against cash to the renewed consent of the Supervisory Board, contributions on one occasion. 203
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Reserves Capital management Capital reserves consist exclusively of transfers in The objective of capital management is to ensure respect of premiums on the issue of new shares the Group's long-term ability to function on a going after deducting the net costs of the placement and concern basis and to generate appropriate returns the Company's share of revenues from the sale of for shareholders. Debt management steers the treasury shares. raising of debt, particularly with regard to financing with matching maturities. The capital structure is Other revenue reserves comprise profits generated managed in such a way that changes in macroeco- and not distributed by Group companies in the nomic conditions and risks arising from the underlying current year and previous years and accumulated assets are taken into account. Short-term target- losses. In addition, the net effect, taking account of performance comparisons and medium- and long- subsequent adjustments, of the remeasurement of term financial planning are used in the capital SIGNAL IDUNA PARK in accordance with IFRS 1.16 structure management process. is reported under this item. The capital structure at the end of the reporting period was as follows: EUR '000 30/06/2021 30/06/2020 Equity of shareholders 232,637 305,447 Share in total capital 51.64 % 58.97 % (10) Provisions The EUR 2,333 thousand (previous year: EUR 0 amount of the expected obligation is also thousand) in provisions recognised as at 30 June 2021 uncertain. Based on comparable past incidents included provisions for litigation and liability risks and its present understanding of the substance relating to legal proceedings, and was expensed. of the matter, Borussia Dortmund anticipates a The outcome of the legal proceedings cannot be value in dispute and a potential loss of EUR 2,333 forecast with any certainty, meaning that the thousand. (11) Financial liabilities Current financial liabilities amounted to EUR 56,900 thousand as at the end of the reporting period (previous year: EUR 8,031 thousand). As in the previous year, this related to an overdraft facility that has been utilised. 204
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 (12) Lease liabilities The payment obligations under leases are due for payment as follows: EUR '000 30/06/2021 30/06/2020 Less than 1 year 4,932 5,135 Between 1 and 5 years 11,106 13,886 More than 5 years 7,763 8,569 23,801 27,590 Future finance charges from leases -2,741 -3,186 Present value of liabilities from leases 21,060 24,404 The change in the maturity structure of the present values of lease liabilities was as follows: EUR '000 30/06/2021 30/06/2020 Less than 1 year 4,241 4,350 Between 1 and 5 years 9,735 12,943 More than 5 years 7,084 7,111 21,060 24,404 (13) Trade payables Trade payables amounted to EUR 101,353 thou- transfer deals. Liabilities from transfer deals sand (previous year: EUR 137,059 thousand), of declined due to payments made in connection which EUR 87,683 thousand (previous year: EUR with transfer agreements. 120,287 thousand) related to liabilities from (14) Other financial obligations EUR '000 30/06/2021 30/06/2020 Non-current Other 208 0 208 0 Current Other taxes 6,971 9,949 Other 23,930 29,166 30,901 39,115 Total other financial liabilities 31,109 39,115 Current other financial liabilities decreased year on (previous year: EUR 219 thousand). The refund year by EUR 8,214 thousand. This resulted primarily liability relates to the customer's right to return from payments made in the financial year for the products within 30 days of purchase. A refund professional squad. liability and a corresponding adjustment of In addition, other financial liabilities include refund revenue is recognised at the time of sale for liabilities amounting to EUR 103 thousand products for which a return is expected. 205
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund (15) Prepaid expenses and deferred income Prepaid expenses EUR '000 30/06/2021 30/06/2020 Non-current Deferred income related to professional squad 867 4,569 Insurance premiums 0 2 Other advance payments 1,227 1,147 2,094 5,718 Current Deferred income related to professional squad 8,722 6,560 Insurance premiums 538 604 Other advance payments 3,448 2,737 12,708 9,901 * V* Veränderung der Veränderung der Vorjahrorjahresposespostten. Ven. Vererglgleiche auch Konzernanhang, Korreiche auch Konzernanhang, Korrektur gemäß IAS 8.ektur gemäß IAS 8. Deferred income EUR '000 30/06/2021 30/06/2020 Non-current Advance payments received from sponsors 0 230 0 230 Current Advance payments received from ticket sales 22 2 Advance payments received from sponsors 4,447 2,931 Other advance payments 618 708 5,087 3,641 Current deferred income as reported amounted to In addition, because of the continuing COVID-19 EUR 5,087 thousand (previous year: EUR 3,641 pandemic, the services under sponsorship thousand), and consisted primarily of proceeds from agreements not rendered in the 2019/2020 and sponsoring agreements relating to the 2021/2022 2020/2021 seasons (EUR 2,259 thousand) were season, which are reversed rateably over the reported under current deferred income. This is periods to which they relate. transferred to subsequent seasons as compensation. 206
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 NOTES TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (16) Revenue EUR '000 2020/2021 2019/2020 Match operations 554 32,510 Advertising 106,577 98,005 TV Marketing 186,655 169,836 Merchandising 32,640 33,292 Conference, catering, miscellaneous 7,745 36,553 334,171 370,196 Revenue is generated primarily in Germany. It includes prior-period revenue of EUR 2,155 thousand (previous year: EUR 785 thousand). The prior-period income recognised in the financial year related primarily to TV marketing. (17) Net transfer income EUR '000 2020/2021 2019/2020 Gross transfer proceeds 24,406 116,688 Transfer costs -1,285 -7,488 Net transfer proceeds 23,121 109,200 Residual carrying amount -7,720 -69,040 Net transfer income 15,401 40,160 (18) Other operating income Other operating income increased year on year from The share of other operating income recognised EUR 9,195 thousand to EUR 10,377 thousand and from prior periods amounted to EUR 2,608 thousand consisted mainly of income from insurance (previous year: EUR 5,033 thousand), of which EUR reimbursements amounting to EUR 3,796 thousand, 1,525 thousand resulted from the reversal of income from the reversal of provisions amounting provisions and the derecognition of liabilities. to EUR 1,525 thousand as well as income from reimbursements for granting contractual marketing rights amounting to EUR 941 thousand. (19) Cost of materials Cost of materials decreased from EUR 22,392 previous year: EUR 4,716 thousand) and BVB thousand to EUR 19,589 thousand. This item Merchandising GmbH (EUR 18,901 thousand; consisted mainly of the cost of goods sold for BVB previous year: EUR 17,794 thousand). Event & Catering GmbH (EUR 625 thousand; 207
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund (20) Personnel expenses No defined-benefit pension entitlements have been granted to employees of the BVB Group. Payments to the state pension scheme are reported under social security contributions. EUR '000 2020/2021 2019/2020 Wages and salaries 207,025 206,939 Social security contributions 8,625 8,218 215,650 215,157 During financial year 2020/2021, EUR 2,647 thousand was paid into the German statutory retirement pension system (previous year: EUR 2,750 thousand). (21) Depreciation and amortisation EUR '000 2020/2021 2019/2020 Amortisation of intangible assets 97,440 92,188 Depreciation of property, plant and equipment 13,603 13,942 111,043 106,130 (22) Other operating expenses EUR '000 2020/2021 2019/2020 Match operations 36,956 47,211 Advertising 10,708 26,989 Transfer deals 4,204 4,654 Retail 6,486 6,463 Administration 22,807 25,352 Other 4,599 8,341 85,760 119,010 Other operating expenses include prior-period expenses in the amount of EUR 762 thousand (previous year: EUR 776 thousand). 208
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 (23) Financial result EUR '000 2020/2021 2019/2020 Net income/loss from investments in associates (see Note (3)) 81 -1 Finance income Interest income in accordance with IFRS 9 252 167 Other interest income 35 120 287 287 Finance costs Discounting expenses and other interest -554 -2,879 Interest expenses for lease liabilities -772 -571 Interest expenses in accordance with IFRS 9 -101 -281 -1,427 -3,731 -1,059 -3,445 (24) Income taxes and deferred taxes In the current financial year, Borussia Dortmund The deferred tax assets and liabilities reported in generated tax income of EUR 342 thousand the consolidated statement of financial position (previous year: EUR 2,630 thousand) as the result relate to the following items: of a trade tax reimbursement. Net as at Recognised in Net as at Deferred Deferred EUR '000 30/06/2020 profit or loss 30/06/2021 tax assets tax liabilities Intangible assets 5,477 -1,653 3,824 3,824 0 Property, plant and equipment -6,166 -1,026 -7,192 0 -7,192 Trade receivables and other assets 275 -81 194 194 0 Trade payables -16,686 1,489 -15,197 0 -15,197 Tax loss carry-forwards 17,100 1,271 18,371 18,371 0 Total 0 0 0 22,389 -22,389 Net as at Recognised in Net as at Deferred Deferred EUR '000 30/06/2019 profit or loss 30/06/2020 tax assets tax liabilities Intangible assets 11 5,466 5,477 5,477 0 Property, plant and equipment -5,085 -1,081 -6,166 61 -6,227 Trade receivables and other assets 235 40 275 275 0 Trade payables -9,716 -6,970 -16,686 639 -17,325 Tax loss carry-forwards 11,876 5,224 17,100 17,100 0 Total -2,679 2,679 0 23,552 -23,552 209
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund The income tax expense was made up as follows: EUR '000 2020/2021 2019/2020 Income taxes Current period -60 -40 Prior period 402 -9 Deferred tax benefit/expense in connection with the creation or reversal of temporary differences -1,271 -2,545 Tax loss carryforwards not yet utilised 1,271 5,224 342 2,630 At the end of the reporting period, the Group had The expected income tax expense which would corporation tax loss carry-forwards amounting to theoretically result from applying the weighted EUR 118,937 thousand (previous year: EUR 44,270 average tax rate of 32.81% (previous year: 32.81%) thousand) and trade tax loss carry-forwards can be reconciled with the actual income tax benefit amounting to EUR 100,069 thousand (previous reported in the consolidated statement of year: EUR 29,492 thousand) for which no deferred comprehensive income as follows: tax assets have been recognised. The tax loss carry- forwards have an unlimited carry-forward period. EUR '000 2020/2021 2019/2020 Consolidated net profit before income taxes -73,152 -46,583 Theoretical tax rate in % 32.81 32.81 Expected tax benefit from income taxes 24,001 15,284 Effects from tax additions and subtractions 988 1,240 Change in ability to utilise tax loss carry-forwards -24,989 -16,564 Change in deferred taxes 0 2,679 Prior-year taxes 402 -9 Other tax effects -60 0 Tax income as reported in the consolidated statement of comprehensive income 342 2,630 Actual tax rate in % -0.47 -5.64 (25) Consolidated statement of cash flows Cash and cash equivalents reported in the statement amounted to EUR -62,022 thousand (previous year: of financial position amounted to EUR 1,725 EUR -50,769 thousand). thousand (previous year: EUR 3,317 thousand). In Net cash flows from investing activities included addition, liabilities to banks amounting to EUR 56,900 transfer proceeds, netted directly against payments thousand (previous year: EUR 8,031 thousand) were linked to transfers amounting to EUR 5,071 thousand reported during the period under review. (previous year: EUR 8,955 thousand). Cash flows from operating activities amounted to The changes in financial liabilities reported under EUR 15,947 thousand (previous year: EUR -362 cash flows from financing activities were as follows: thousand) and cash flows from investing activities 210
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 Reconciliation of change in liabilities to cash flows from financing activities in accordance with IAS 7.44 as at 30 June 2021 Equity Liabilities/derivatives Other EUR '000 Subscribed Treasury Financial Lease financial capital Reserves shares liabilities liabilities liabilities Total Balance as at 30 June 2020 92,000 213,560 -113 8,031 24,404 39,115 376,997 Proceeds from finance raised 0 0 0 56,900 0 0 56,900 Repayment of lease liabilities 0 0 0 0 -4,386 0 -4,386 Total change in cash flows from financing activities 0 0 0 56,900 -4,386 0 52,514 Other changes related to liabilities Change in financial liabilities 0 0 0 -8,031 0 0 -8,031 Change in other financial liabilities 0 0 0 0 0 -5,673 -5,673 Change in lease liabilities 0 0 0 0 1,042 0 1,042 related to equity Consolidated net loss for the year 0 -72,810 0 0 0 0 -72,810 Total other changes related to liabilities 0 0 0 -8,031 1,042 -5,673 -12,662 Total other changes related to equity 0 -72,810 0 0 0 0 -72,810 Balance as at 30 June 2021 92,000 140,750 -113 56,900 21,060 33,442 344,039 Reconciliation of change in liabilities to cash flows from financing activities in accordance with IAS 7.44 as at 30 June 2020 Equity Liabilities/derivatives Other EUR '000 Subscribed Treasury Lease financial capital Reserves shares liabilities liabilities Total Balance as at 30 June 2019 92,000 263,032 -113 11,508 40,859 407,286 Acquisition of minority interests 0 0 0 0 0 0 Payment for settlement of derivatives 0 0 0 0 0 0 Dividend payments 0 -5,519 0 0 0 -5,519 Repayment of lease liabilities 0 0 0 -3,929 0 -3,929 Total change in cash flows from financing activities 0 -5,519 0 -3,929 0 -9,448 Other changes related to liabilities Change in other financial liabilities 0 0 0 0 -1,744 -1,744 Change in lease liabilities 0 0 0 16,825 0 16,825 related to equity Consolidated net loss for the year 0 -43,953 0 0 0 -43,953 Total other changes related to liabilities 0 0 0 16,825 -1,744 15,081 Total other changes related to equity 0 -43,953 0 0 0 -43,953 Balance as at 30 June 2020 92,000 213,560 -113 24,404 39,115 368,966 211
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund OTHER DISCLOSURES FINANCIAL RISKS (26) Credit risk The carrying amounts of the following financial instruments reflect the Group's maximum exposure to credit risk. At the end of the reporting period, the maximum exposure was as follows: Carrying amounts of financial instruments EUR '000 30/06/2021 30/06/2020 Financial assets, receivables and other financial receivables 40,440 49,607 Cash and cash equivalents 1,725 3,317 When reporting trade receivables, Borussia Under the simplified approach, loss allowances are Dortmund uses the simplified approach whereby recognised on an individual basis if one or more expected credit losses are recognised over the entire events occur that have a detrimental impact on the remaining term upon recognition. Expected credit creditworthiness of the debtor. These events include losses are calculated using the simplified approach, default in payment, impending insolvency or broken down by risk group and taking into account concessions by the debtor due to payment difficulties. historical default rates. The allocation to the Trade receivables are written off immediately if their respective risk groups is based on the shared credit recoverability is no longer expected with sufficient risk characteristics. At Borussia Dortmund, these are probability. This is the case, for example, when the receivables from transfer deals on the one hand, and debtor is in default. other trade receivables related primarily to ticketing, Receivables from transfer deals represent a merchandising and sponsorships on the other. Credit concentration of risk, which is hedged using loss rates specific to the risk clusters are calculated transfer rights. on the basis of the historical credit loss rates for the past three financial years and taking into account The change in loss allowances on the basis of the forward-looking macroeconomic indicators (gross expected credit losses for trade receivables as at 30 domestic product) as well as an assessment of the June 2021 is presented in the table below: economic impact of the COVID-19 pandemic. This method of calculation resulted in a loss rate that was insignificantly higher than in the previous year. EUR '000 2020/2021 2019/2020 Loss allowances as at 1 July in accordance with IFRS 9 3,982 1,852 Transfers recognised in profit or loss 497 2,552 Reversals recognised in profit or loss -626 -427 Items recognised outside profit or loss -2,675 0 Loss allowances in accordance with IFRS 9 4 5 Loss allowances as at 30 June 1,182 3,982 212
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 The maturities of trade receivables, including other financial receivables, as at the end of the reporting period were as follows: Maturity analysis of receivables EUR '000 30/06/2021 30/06/2020 Not yet due 38,893 48,767 Less than 30 days past due 870 358 Between 30 and 89 days past due 565 74 More than 90 days past due 0 1 40,328 49,200 Cash and cash equivalents relate to bank balances Due to the short investment term and the and short-term investments in the form of creditworthiness of the banks, cash and cash overnight and time deposits. Borussia Dortmund equivalents are subject to a low level of credit risk. only deposits money at banks with investment Thus, as in the previous year, no material loss grade ratings. Furthermore, the creditworthiness allowances had been recognised. of the banks is regularly monitored on the basis The table below contains information on the credit of credit default swaps (CDS). risk and the expected credit losses according to the classes of receivables defined by Borussia Dortmund as at 30 June 2021: 30 June 2021 Expected Gross carrying Default rate credit losses EUR '000 (EUR '000) (%) (EUR'000) Receivables from transfer deals 17,584 0.08 14 Other trade receivables 15,416 0.08 12 Total 33,000 26 30 June 2020 Expected EUR '000 Gross carrying Default rate credit losses (EUR '000) (%) (EUR'000) Receivables from transfer deals 24,103 0.06 14 Other trade receivables 14,008 0.06 9 Total 38,111 23 (27) Exchange rate risk As at 30 June 2021, the Group had financial A strengthening (weakening) of the pound sterling liabilities amounting to GBP 10,000 thousand that (GBP) against the euro (EUR) by +10% (-10%) would are exposed to exchange rate risk. In order to fully not have any material effect on the statement of hedge the currency risk, EUR/GBP currency comprehensive income as at 30 June 2021, as the forwards with matching maturities and a notional changes in value of the financial liabilities and the volume of GBP 10,000 thousand have been entered currency forwards offset each other in the into, which are not part of an IFRS 9 hedge statement of comprehensive income. accounting relationship and are therefore accounted for on a stand-alone basis. 213
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund (28) Interest rate risk As in the previous year, Borussia Dortmund's portfolio fair value through profit or loss are subject to interest only included non-derivative financial instruments rate risk. Please refer to the disclosures on bearing fixed interest as at 30 June 2021. Of those, receivables intended for factoring and measured at only the financial instruments that are measured at fair value in Note 31. Carrying amounts of non-derivative interest-bearing financial instruments EUR '000 30/06/2021 30/06/2020 Fixed Variable Fixed Variable interest interest interest interest Financial assets, receivables and other financial receivables 40,440 0 49,607 0 Financial liabilities from leases 21,060 0 24,404 0 (29) Net gains/losses The net gains and losses from financial instruments recognition and reversal of impairment write-downs, presented below comprise measurement gains and interest and all other earnings impacts from financial losses, premium and discount amortisation, the instruments. Net gains and losses from financial instruments Measurement category in accordance with IFRS 9 (EUR '000) 2020/2021 2019/2020 Financial assets measured at amortised cost -13 -3,276 Of which net interest expense/income -13 -1,142 Financial assets measured at fair value through profit or loss 252 -115 Of which net interest expense/income 252 -115 Financial liabilities measured at amortised cost -1,379 -2,187 Of which net interest expense/income -1,379 -2,187 Net gains/losses from financial instruments -1,140 -5,578 Of which net interest expense/income -1,140 -3,444 214
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 (30) Liquidity risk The following table shows the contractually arranged undiscounted payments of interest and principal in respect of financial liabilities. Whenever a right of termination exists, the figures are reported as at the earliest possible termination date. Maturities of contractual cash flows from financial liabilities in 2021 Trade and other EUR '000 Lease liabilities financial liabilities Total 2021/2022 4,931 83,360 88,291 2022/2023 4,939 37,052 41,991 2023/2024 2,846 302 3,148 2024/2025 1,873 52 1,925 2025/2026 1,448 52 1,500 2026 and beyond 7,763 0 7,763 23,800 120,818 144,618 Maturities of contractual cash flows from financial liabilities in 2020 Trade and other EUR '000 Lease liabilities financial liabilities Total 2020/2021 5,135 67,432 72,567 2021/2022 4,670 40,150 44,820 2022/2023 4,753 27,137 31,890 2023/2024 2,694 2,340 5,034 2024/2025 1,769 0 1,769 2025 and beyond 8,569 0 8,569 27,590 137,059 164,649 215
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund (31) Fair values of financial instruments by class and category The table below provides a reconciliation of the items of the statement of financial position and the individual classes and categories of IFRS 9 to the fair values as at 30 June 2021: Measurement category in accordance with IFRS 9 Aegre gulosus agricolae praemuniet Pompeii. Saburre pessimus divinus senesceret quadrupei. Carrying amount Fair value Concubine amputat incredibiliter adfabilis umbra- Gulosus ossifragi fermentet utilitas suis, etiam EUR '000 30/06/2021 30/06/2021 culi, ut ossifragi adquireret lascivius umbraculi. fiducias optimus frugaliter circumgrediet agrico- ASSETS Oratori praemuniet zothecas, quod pessimus lae. At amortised cost quinquennalis quadrupe Pessimus verecundus rures suffragarit chirogra- Non-current financial assets 27 27 Non-current trade and other receivables 5,775 5,775 phi.Satis. Current trade and other receivables 29,936 29,936 Cash and cash equivalents 1,725 1,725 At fair value through profit or loss Receivables intended for factoring 4,617 4,617 Total 42,080 42,080 Measurement category in accordance with IFRS 9 Aegre gulosus agricolae praemuniet Pompeii. Carrying amount Fair value Concubine amputat incredibiliter adfabilis umbra- Saburre pessimus divinus senesceret quadrupei. EUR '000 30/06/2021 30/06/2021 culi, ut ossifragi adquireret lascivius umbraculi. Gulosus ossifragi fermentet utilitas suis, etiam LIABILITIES Oratori praemuniet zothecas, quod pessimus fiducias optimus frugaliter circumgrediet agrico- At amortised cost quinquennalis quadrupe lae. Other non-current financial liabilities 208 208 Non-current lease liabilities 16,819 n/a Non-current trade payables 37,250 37,250 Current financial liabilities 56,900 56,900 Current lease liabilities 4,241 n/a Current trade payables 64,103 64,103 Other current financial liabilities 33,234 33,234 Total 212,755 191,695 216
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 Measurement category in accordance with IFRS 9 Aegre gulosus agricolae praemuniet Pompeii. Saburre pessimus divinus senesceret quadrupei. Carrying amount Fair value Concubine amputat incredibiliter adfabilis umbra- Gulosus ossifragi fermentet utilitas suis, etiam EUR '000 30/06/2020 30/06/2020 culi, ut ossifragi adquireret lascivius umbraculi. fiducias optimus frugaliter circumgrediet agrico- ASSETS Oratori praemuniet zothecas, quod pessimus lae. At amortised cost quinquennalis quadrupe Pessimus verecundus rures suffragarit chirogra- Non-current financial assets 32 32 Non-current trade and other receivables 3,565 3,565 phi.Satis. Current trade and other receivables 36,520 36,520 Cash and cash equivalents 3,317 3,317 At fair value through profit or loss Receivables intended for factoring 9,115 9,115 Total 52,549 52,549 Measurement category in accordance with IFRS 9 Carrying amount Fair value Aegre gulosus agricolae praemuniet Pompeii. Saburre pessimus divinus senesceret quadrupei. EUR '000 30/06/2020 30/06/2020 Concubine amputat incredibiliter adfabilis umbra- Gulosus ossifragi fermentet utilitas suis, etiam LIABILITIES culi, ut ossifragi adquireret lascivius umbraculi. fiducias optimus frugaliter circumgrediet agrico- At amortised cost Oratori praemuniet zothecas, quod pessimus lae. Other non-current financial liabilities 0 0 quinquennalis quadrupe Pessimus verecundus rures suffragarit chirogra- Non-current lease liabilities 20,054 n/a phi.Satis. Non-current trade payables 69,627 69,627 Other trade payables 8,031 8,031 Current lease liabilities 4,350 n/a Current trade payables 67,432 67,432 Other current financial liabilities 39,115 39,115 Total 208,609 184,205 and payables and cash are roughly equivalent to Any necessary transfers between the levels of the fair value hierarchy take place as at the end of the their fair values. financial year in which the event triggering them occurs. There were no reclassifications in the Non-current trade receivables and liabilities are current financial year. The fair value of receivables discounted to present value and accrue interest. In earmarked for factoring is assigned to level 3 and these cases, the carrying amounts largely the fair value of all other financial instruments correspond to fair value. specified above is assigned to level 2. Receivables that can potentially be sold as part of Due to their short residual terms, the carrying factoring are recognised at fair value through profit amounts reported for current trade receivables or loss on the basis of the business model in 217
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund accordance with the requirements of IFRS 9. The (30 June 2021: 2.65%). Thus, the fair value would fair value is measured by discounting the cash increase (decrease) at the same rate if the discount flows. The measurement models take into account rate were lower (higher). Since the changes in fair the present value of the expected payments, value are recognised in the income statement, the discounted using a risk-adjusted discount rate. table below presents the effects on earnings as at Borussia Dortmund regularly receives an the end of the reporting period: individually-calculated discount rate from the factor EUR '000 Carrying amount of receivables intended for factoring (1 July 2020) 9,115 Additions 0 Disposals -4,750 (27) Ergebnis je Aktie Gains/losses recognised through profit or loss 252 Carrying amount of receivables intended for factoring (30 June 2021) 4,617 The fair value of other financial assets and The discount rates valid at the end of the reporting liabilities is measured using the discounted cash period had matching maturities and formed the flow valuation technique. The discount rates used basis of the valuation model. were taken from the "Yields on listed Federal securities" as published by the Bundesbank at the end of the reporting period, plus a risk premium. (32) Earnings per share Earnings per share are calculated in accordance number of shares outstanding. Earnings per share with IAS 33 (Earnings Per Share) by dividing the net relate only to shares in the parent company. Since profit or loss for the period attributable to the there are no potential ordinary shares, basic and shareholders of the parent by the weighted average diluted earnings per share are the same. (33) Transactions with related parties The general partner in Borussia Dortmund GmbH Geschäftsführungs-GmbH and BV. Borussia 09 & Co. KGaA is Borussia Dortmund Geschäfts - e.V. Dortmund, as well as all companies associated führungs-GmbH. The latter is responsible for the therewith hence are deemed to be related parties management and legal representation of Borussia in accordance with IAS 24. Dortmund GmbH & Co. KGaA. The power to appoint Please refer to Notes 37 and 39 for further and remove members of staff thus rests with BV. disclosures on the Supervisory Board of Borussia Borussia 09 e.V., Dortmund, in its capacity as Dortmund GmbH & Co. KGaA and the management the sole shareholder in Borussia Dortmund of BVB Geschäftsführungs-GmbH. Geschäftsführungs-GmbH. Both Borussia Dortmund 218
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 Related Party Disclosures EUR '000 2020/2021 2019/2020 Transactions with BV. Borussia 09 e.V. Dortmund Rental income 291 329 Income from other services 187 411 Income from ticket sales 0 104 Transactions with Borussia Dortmund Geschäftsführungs-GmbH Expense from costs recharged 4,127 3,917 of which from executive remuneration falling due 3,818 3,588 Transactions with Orthomed GmbH Expense from other services 322 322 EUR '000 30/06/2021 30/06/2020 Other current and non-current assets Intercompany account with BV. Borussia 09 e.V. Dortmund 63 39 Other current liabilities Intercompany account with Borussia Dortmund Geschäftsführungs-GmbH 2,126 1,933 In addition, transactions were entered into with GmbH (merchandising, tickets, sponsorship, events members of the Supervisory Board of Borussia and travel services) amounting to EUR 102 Dortmund GmbH & Co. KGaA and the management thousand (previous year: EUR 213 thousand). These and Advisory Board of BVB Geschäftsführungs- transactions were conducted at arm's length. (34) Other financial obligations EUR '000 Due after less than 1–5 more than 30/06/2021 Total 1 year years 5 years Rental and lease payments 893 582 271 40 Marketing fees 38,700 7,259 31,441 0 Other obligations 2,986 844 2,007 135 42,579 8,685 33,719 175 Purchase commitments 16,000 5,500 10,500 0 In financial year 2020/2021, EUR 1,060 thousand in rental and lease payments were expensed for leases within the meaning of IFRS 16.6. EUR '000 Due after less than 1–5 more than 30/06/2020 Total 1 year years 5 years Rental and lease payments 1,301 536 700 65 Marketing fees 45,410 6,075 30,587 8,748 Other obligations 3,301 840 2,321 140 50,012 7,451 33,608 8,953 Purchase commitments 0 0 0 0 In financial year 2019/2020, EUR 897 thousand in rental and lease payments were expensed for leases within the meaning of IFRS 16.6. 219
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund The minimum lease payments relate mostly to lease payment obligations under existing agreements agreements for offices and various motor vehicles. with conditions precedent were reported as at 30 The purchase commitments relate primarily to the June 2021, of which EUR 18,400 thousand acquisition of intangible assets. (previous year: EUR 26,604 thousand) were due in In addition, a total of EUR 33,846 thousand less than one year. (previous year: EUR 41,186 thousand) in variable (35) Events after the end of the reporting period Transfer deals Match operations Borussia Dortmund has reached an agreement with On 4 December 2020, the DFB Executive Committee the top English club, Manchester United, regarding adopted the new fixture calendar for the 2021/2022 the transfer of player Jadon Sancho. As part of this season. This stipulated that Bundesliga matches agreement, Borussia Dortmund will receive a fixed would start on the weekend of 13 to 15 August 2021. transfer fee of EUR 85.0 million, which is expected The 34th and final Bundesliga match day is to have a positive effect of around EUR 56.0 million scheduled for 14 May 2022. on the key earnings figures (EBITDA, EBIT) for the The DFB Cup will start with the first round one week 2021/2022 financial year. before the Bundesliga from 6 August 2021. The DFL Super Cup between Borussia Dortmund and Borussia Dortmund has now reached an agreement Bayern Munich will be played on 17 August 2021. with the French club, Olympique Marseille, on the The dates for the UEFA Champions League have also permanent transfer of Leonardo Balerdi, who had already been set: the first match day of the group already spent the 2020/2021 season on loan there. stage will be played on 14/15 September 2021. Capital expenditure Borussia Dortmund has signed Dutch international Donyell Malen from PSV Eindhoven. The 22-year-old signed a contract with the German Cup winners that runs until 30 June 2026. (36) Average number of salaried employees 2020/2021 2019/2020 Total 806 902 of which in the Athletics Department 233 273 of which trainees 8 15 of which other 565 614 220
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 (37) Management Management remuneration EUR '000 2020/2021 2019/2020 Dipl.-Kfm. Hans-Joachim Watzke (Chairman) Fixed components Fixed remuneration 1,905 1,802 Other r emuneration 41 40 Dipl.-Kfm. Thomas Treß Fixed components Fixed remuneration 905 860 Other r emuneration 61 72 Carsten Cramer Fixed components Fixed remuneration 873 864 Other remuneration 33 42 3,818 3,680 The members of management received remuneration EUR 23 thousand in employer contributions to the within the meaning of IAS 24.17 (a) in the 2020/2021 German statutory retirement pension system were financial year. incurred (previous year: EUR 23 thousand). The management did not receive any performance- based remuneration for the 2020/2021 financial year or the previous year. (38) Auditors' fees These were reported in accordance with the classification set out in IDW AcP HFA 36. EUR '000 2020/2021 2019/2020 Audit services 277 256 Other audit-related work 50 50 Tax advisory services 1 2 Other services 0 2 KPMG AG Wirtschaftsprüfungsgesellschaft audited services covering advice and assessment in the annual and consolidated financial statements individual cases and audited the separate of Borussia Dortmund GmbH & Co. KGaA and non-financial Group report. conducted further statutory and voluntary audits The other advisory services relate to confirmations at subsidiaries. The auditors reviewed the interim in connection with licensing procedures. consolidated financial statements and carried out Advisory services relating to the General Data mandatory audits and reviews as part of the DFL Protection Regulation were reported under other licensing procedure pursuant to the DFL licensing services in the previous year. regulations. KPMG also provided tax advisory 221
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund (39) Supervisory Board The members of the Company's Supervisory Board waived 33.33% of their Supervisory Board remuneration in financial year 2020/2021. Their names, occupations and their further responsibilities on other management bodies are listed below: SUPERVISORY BOARDof Borussia Dortmund GmbH & Co. KGaA Gerd Christian Bernd Peer Ulrich Bjørn Dr. Reinhold Silke Bodo Judith Pieper Kullmann Geske Steinbrück Leitermann Gulden Lunow Seidel Löttgen Dommermuth Chairman Deputy Chairman (until (since 19 November 2020) 19 November 2020) FULL REMUNERATION PAYABLE FOR 2020/2021(EUR '000) (received by the members after waiving all remuneration in accordance with IAS 24.17 (a) in the 2020/2021 financial year). 48 36 24 9 24 24 24 24 24 15 OCCUPATIONS(as at 30 June 2021) Retired; former Chairman of Managing Senior Advisor Chairman of the Chief Executive Medical Director Senior Executive Chair of the CDU Managing Managing the Executive partner of to the Manage- Managing Boards Officer of of Praxisklinik at Dortmunder parliamentary partner of JUVIA Director of Board of Evonik Bernd Geske ment Board of of group parent PUMA SE, Bornheim, Stadtwerke AG group in the state Verwaltungs Stadt- Industries AG, Lean ING-DiBa AG, companies of the Herzogenaurach Bornheim and Managing parliament of GmbH, Cologne Parfümerie Essen Communication, Frankfurt am SIGNAL IDUNA Director of North Rhine- Pieper GmbH, Meerbusch Main Group, Dortmund Hohenbuschei Westphalia, Herne (SIGNAL Kran- Beteiligungsge- detective chief kenversicherung sellschaft mbH, inspector Kriminalhaupt- a.G., Dortmund; Westfalentor 1 ( SIGNAL IDUNA GmbH and kommissar) Lebensversiche- Dortmund Logi- (ret.), public rung a.G., stik GmbH, all in administration Hamburg; Dortmund graduate SIGNAL IDUNA Unfallversiche- rung a.G., Dortmund; SIGNAL IDUNA Allgemeine Ver- sicherung AG, Dortmund) OTHER FUNCTIONS on statutory supervisory boards and comparable German or foreign supervisory bodies of commercial enterprises (as at 30 June 2021) Member of the Chairman of the Member and Chairman of the Member of the Advisory Board Supervisory Chairman of the Board Salling Advisory Board of Borussia Board of Clear- Supervisory Group A/S, of Borussia Dortmund VAT Aktiengesell- Board of Braband, Dortmund Geschäfts- schaft, Berlin Dortmunder Denmark (since Geschäfts- führungs-GmbH, Volksbank eG, 6 March 2020); führungs GmbH, Dortmund Dortmund; Member of the Dortmund Member and Supervisory Chairman of the Board of Tchibo Supervisory GmbH, Hamburg Board of Sana Kliniken AG, Ismaning 222
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 (40) Exercise of the exemption option pursuant to § 264 (3) HGB The preparation of consolidated financial statements effectively exempts BVB Merchandising GmbH and BVB Event & Catering GmbH from the obligation to prepare annual financial statements within the meaning of § 264 (3) HGB. (41) Notifiable shareholdings (under § 160 (1) no. 8 AktG in conjunction with § 33 (1) and (2) WpHG) Of the shareholdings in our Company, the following Mr Ralph Dommermuth notified us on 8 February were notified to us pursuant to § 33 (1) of the German 2021 that his voting interest in Borussia Dortmund Securities Trading Act (Wertpapierhandelsgesetz, GmbH & Co. KGaA amounted to 4.99% on 8 February "WpHG") and published with the following content 2021 (4,599,000 voting rights/shares) and that all of pursuant to § 40 (1) WpHG in financial year these voting rights were attributable to him (Mr 2020/2021: Ralph Dommermuth) pursuant to § 34 WpHG via Ralph Dommermuth Beteiligungen GmbH, and On 26 February 2021, Mr François Henri Joseph furthermore that the chain of subsidiaries is as Pinault and Mr François Jean-Henri Pinault notified follows, beginning with the ultimate controlling us that their voting rights in Borussia Dortmund person or entity: GmbH & Co. KGaA amounted to 0.0% as at 16 May - Ralph Dommermuth 2018 (0 voting rights or shares); that their notification - Ralph Dommermuth Verwaltungs GmbH was submitted due to the discontinuation of the - Ralph Dommermuth GmbH & Co. KG jointly attributed controlling position in relation to Beteiligungsgesellschaft PUMA SE, as a consequence of which no voting - Ralph Dommermuth Beteiligungen GmbH with rights stemming from shares in Borussia Dortmund a voting interest of 4.99% GmbH & Co. KGaA were attributable to Kering S.A., Artémis S.A. or Financière Pinault S.C.A. PUMA SE, Herzogenaurach, Germany, notified us on 17 February 2021, that its share of voting rights in Borussia Dortmund GmbH & Co. KGaA amounted to 4.99% on 16 February 2021 (4,599,900 voting rights or shares) and that all of their voting rights were held directly by PUMA SE in accordance with § 33 WpHG. 223
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund (42) Shareholdings by members (43) Corporate Governance of governing bodies As at 30 June 2021, one member of management The management and Supervisory Board of held 7,045 no-par value shares in the Company. As Borussia Dortmund GmbH & Co. KGaA issued the at the same date, the members of the Supervisory Declaration of Conformity with the German Board held a total of 8,602,009 no-par value shares. Corporate Governance Code required by § 161 of the Members of management and the Supervisory Board German Stock Corporation Act (Aktiengesetz, "AktG") hold a total of 8,609,054 no-par-value shares, which on 7 September 2020 and made it permanently corresponds to more than 1% of the shares issued available to shareholders on the website at by Borussia Dortmund GmbH & Co. KGaA. https://aktie.bvb.de/eng/ Corporate-Governance/Statement-of-Compliance. Dortmund, 9 August 2021 Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien Borussia Dortmund Geschäftsführungs-GmbH Hans-Joachim Watzke Thomas Treß Carsten Cramer Managing Director (Chairman) Managing Director Managing Director 224
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 Note: This is a translation of the German original. Solely the original text in German language is authoritative. INDEPENDENT AUDITOR'S REPORT To Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS AND OF THE GROUP MANAGEMENT REPORT Opinions report specified in the "Other Information" section We have audited the consolidated financial of the auditor's report. The group management statements of Borussia Dortmund GmbH & Co. report contains cross-references that are not Kommanditgesellschaft auf Aktien, Dortmund required by law and which are marked as ("Borussia Dortmund") and its subsidiaries (the unaudited. Our audit opinion does not extend to Group), which comprise the consolidated statement the cross-references and the information to of financial position as of June 30, 2021, and the which the cross-references refer. consolidated statement of comprehensive income, consolidated statement of changes in equity and Pursuant to Section 322 (3) sentence 1 HGB consolidated statement of cash flows for the financial [Handelsgesetzbuch: German Commercial Code], year from July 1, 2020 to June 30, 2021, and notes we declare that our audit has not led to any to the consolidated financial statements, including a reservations relating to the legal compliance of the summary of significant accounting policies. In consolidated financial statements and of the group addition, we have audited the group management management report. report of Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien for the financial Basis for the Opinions year from July 1, 2020 to June 30, 2021. We conducted our audit of the consolidated financial statements and of the group management report in In our opinion, on the basis of the knowledge obtained accordance with Section 317 HGB and the EU Audit in the audit, Regulation No 537/2014 (referred to subsequently as "EU Audit Regulation") and in compliance with – the accompanying consolidated financial German Generally Accepted Standards for Financial statements comply, in all material respects, Statement Audits promulgated by the Institut der with the IFRSs as adopted by the EU, and the Wirtschaftsprüfer (IDW) [Institute of Public Auditors additional requirements of German commercial in Germany]. Our responsibilities under those law pursuant to Section 315e (1) HGB requirements and principles are further described [Handelsgesetzbuch: German Commercial Code] in the "Auditor's Responsibilities for the Audit of the and, in compliance with these requirements, give Consolidated Financial Statements and of the a true and fair view of the assets, liabilities, and Combined Management Report" section of our financial position of the Group as of June 30, 2021, auditor's report. We are independent of the group and of its financial performance for the financial entities in accordance with the requirements of year from July 1, 2020, to June 30, 2021, and European law and German commercial and – the accompanying group management report as professional law, and we have fulfilled our other a whole provides an appropriate view of the German professional responsibilities in accordance Group's position. In all material respects, this with these requirements. In addition, in accordance group management report is consistent with the with Article 10 (2)(f) of the EU Audit Regulation, we consolidated financial statements, complies with declare that we have not provided non-audit services German legal requirements and appropriately prohibited under Article 5 (1) of the EU Audit presents the opportunities and risks of future Regulation. We believe that the evidence we have development. Our opinion on the group obtained is sufficient and appropriate to provide a management report does not cover the content basis for our opinions on the consolidated financial of those components of the group management statements and on the group management report. 225
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Key Audit Matters in the Audit of the for the financial year from July 1, 2020 to June 30, Consolidated Financial Statements 2021. These matters were addressed in the context Key audit matters are those matters that, in our of our audit of the consolidated financial statements professional judgment, were of most significance in as a whole, and in forming our opinion thereon, we our audit of the consolidated financial statements do not provide a separate opinion on these matters. Measurement of player registrations as well as the completeness and measurement of liabilities from transfers We refer to the information in the notes to the Furthermore, there is generally the risk of consolidated financial statements on accounting inappropriate subsequent measurement of the policies (Section: Intangible assets) and to the intangible assets and transfer liabilities, as well as explanatory notes to the consolidated statement of of the completeness of transfer liabilities that may financial position (Section (1) Intangible assets, (8) arise if conditional contractual components or Assets held for sale and (13) Trade payables). contract modifications materialize. THE CONSOLIDATED FINANCIAL STATEMENT RISK OUR AUDIT APPROACH Player registrations in the amount of EUR 192.4 By examining material transfer and agent million are presented under intangible assets in the agreements for new players, we assessed player consolidated financial statements of Borussia registrations in terms of how the acquisition costs Dortmund. Player registrations decreased to EUR and related liabilities were determined. 192.4 million in the financial year ended due to additions of EUR 58.7 million, disposals of EUR 0.8 As part of subsequent measurement, we checked million, write-downs of EUR 87.9 million and material transfer and agent agreements to assess reclassifications of EUR 1.4 million. Trade payables whether conditions had occurred in financial year include transfer liabilities of EUR 87.7 million. 2020/2021 triggering subsequent acquisition costs and additional liabilities from transfers and whether The acquisition cost of player registrations is these were recognized accordingly in the financial determined based on individual and complex transfer statements. agreements between the transferring and receiving clubs as well as any agreements with players' agents Furthermore, we examined material contract concluded in this context. Due to the heterogeneity modifications or contract renewals for subsequent and complexity of the contract provisions, there is acquisition costs and additional liabilities and generally the risk that the intangible asset and the whether the adjustments to useful lives were related transfer liability are not measured reasonable. appropriately on initial recognition in the consolidated financial statements. OUR OBSERVATIONS Transfer and agent agreements were appropriately assessed in terms of measuring player registrations and measuring the completeness of the related transfer liabilities. 226
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 Completeness and accuracy of personnel expenses of the professional squad We refer to the information in the notes to the employment contracts with their remuneration consolidated financial statements under explanatory components and amounts as well as individual notes to the statement of comprehensive income termination agreements. We checked the (Section (20) Personnel expenses). consistency of contracts deliberately selected according to certain risk criteria with the THE CONSOLIDATED FINANCIAL STATEMENT RISK corresponding salary calculations. For the selected Among other expenses, the salaries of the contracts, we checked to what extent contractually professional squad are disclosed under personnel agreed conditions now apply for the variable expenses in the consolidated financial statements remuneration components. Furthermore, we of Borussia Dortmund. These include, besides examined whether events had occurred that would the base salaries, also performance-related have resulted in higher expenses. In terms of agreed remuneration, such as appearance bonuses and special or one-off payments, we examined whether annual performance bonuses, as well as individual personnel expenses were recognized in the proper special payments. Due to individually agreed period regardless of the payment date. remuneration components and remuneration amounts, there is generally the risk for the OUR OBSERVATIONS consolidated financial statements that the The individually agreed remuneration components personnel expenses of the professional squad and compensation amounts were appropriately were not completely reported or not reported at recognized as personnel expenses of the the correct amount. professional squad. OUR AUDIT APPROACH Our audit procedures in particular included an inspection and assessment of the currently valid 227
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Other information Management and/or the Supervisory Board are/is Our opinions on the consolidated financial responsible for the other information. The other statements and on the group management report information comprises the following components of do not cover the other information, and consequently the group management report, whose content was we do not express an opinion or any other form of not audited: assurance conclusion thereon. – the Group's separate non-financial report, which is referred to in the group management In connection with our audit, our responsibility is to report, and read the aforementioned other information and, in – the corporate governance statement referred to so doing, to consider whether the other information in the group management report. – is materially inconsistent with the consolidated financial statements, with the group management The other information also includes the remaining report information audited for content or our parts of the annual report made available to us after knowledge obtained in the audit, or the date of the independent auditor's report. The – otherwise appears to be materially misstated. other information does not include the consolidated financial statements, the group management report information audited for content and our auditor's report thereon. Responsibilities of Management and the Supervisory Board for the Consolidated Financial Statements and the Group Management Report Management is responsible for the preparation of Furthermore, management is responsible for the consolidated financial statements that comply, in all preparation of the group management report that, material respects, with IFRSs as adopted by the EU as a whole, provides an appropriate view of the and the additional requirements of German Group's position and is, in all material respects, commercial law pursuant to Section 315e (1) HGB consistent with the consolidated financial statements, and that the consolidated financial statements, in complies with German legal requirements, and compliance with these requirements, give a true and appropriately presents the opportunities and risks fair view of the assets, liabilities, financial position of future development. In addition, management is and financial performance of the Group. In addition, responsible for such arrangements and measures management is responsible for such internal control (systems) as they have considered necessary to as they have determined necessary to enable the enable the preparation of a group management preparation of consolidated financial statements that report that is in accordance with the applicable are free from material misstatement, whether due German legal requirements, and to be able to provide to fraud or error. sufficient appropriate evidence for the assertions in the group management report. In preparing the consolidated financial statements, management is responsible for assessing the Group's The supervisory board is responsible for overseeing ability to continue as a going concern. They also have the Group's financial reporting process for the the responsibility for disclosing, as applicable, matters preparation of the consolidated financial statements related to going concern. In addition, they are and of the group management report. responsible for financial reporting based on the going concern basis of accounting unless there is an intention to liquidate the Group or to cease operations, or there is no realistic alternative but to do so. 228
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 Auditor's Responsibilities for the Audit of the Consolidated Financial Statements and of the Group Management Report Our objectives are to obtain reasonable assurance – Obtain an understanding of internal control about whether the consolidated financial statements relevant to the audit of the consolidated financial as a whole are free from material misstatement, statements and of arrangements and measures whether due to fraud or error, and whether the group (systems) relevant to the audit of the group management report as a whole provides an management report in order to design audit appropriate view of the Group's position and, in all procedures that are appropriate in the material respects, is consistent with the consolidated circumstances, but not for the purpose of financial statements and the knowledge obtained in expressing an opinion on the effectiveness of the audit, complies with the German legal these systems. requirements and appropriately presents the – Evaluate the appropriateness of accounting opportunities and risks of future development, as policies used by management and the well as to issue an auditor's report that includes our reasonableness of estimates made by opinions on the consolidated financial statements management and related disclosures. and on the group management report. – Conclude on the appropriateness of management's use of the going concern basis Reasonable assurance is a high level of assurance, of accounting and, based on the audit evidence but is not a guarantee that an audit conducted in obtained, whether a material uncertainty exists accordance with Section 317 HGB and the EU Audit related to events or conditions that may cast Regulation and in compliance with German Generally significant doubt on the Group's ability to Accepted Standards for Financial Statement Audits continue as a going concern. If we conclude that promulgated by the Institut der Wirtschaftsprüfer a material uncertainty exists, we are required to (IDW) will always detect a material misstatement. draw attention in the auditor's report to the Misstatements can arise from fraud or error and are related disclosures in the consolidated financial considered material if, individually or in the statements and in the group management report aggregate, they could reasonably be expected to or, if such disclosures are inadequate, to modify influence the economic decisions of users taken on our respective opinions. Our conclusions are the basis of these consolidated financial statements based on the audit evidence obtained up to the and this group management report. date of our auditor's report. However, future events or conditions may cause the Group to We exercise professional judgment and maintain cease to be able to continue as a going concern. professional skepticism throughout the audit. – Evaluate the overall presentation, structure and We also: content of the consolidated financial statements, – Identify and assess the risks of material including the disclosures, and whether the misstatement of the consolidated financial consolidated financial statements present the statements and of the group management underlying transactions and events in a manner report, whether due to fraud or error, design that the consolidated financial statements give and perform audit procedures responsive to a true and fair view of the assets, liabilities, those risks, and obtain audit evidence that is financial position and financial performance of sufficient and appropriate to provide a basis for the Group in compliance with IFRSs as adopted our opinions. The risk of not detecting a by the EU and the additional requirements of material misstatement resulting from fraud is German commercial law pursuant to Section higher than for one resulting from error, as 315e (1) HGB. fraud may involve collusion, forgery, intentional – Obtain sufficient appropriate audit evidence omissions, misrepresentations, or the override regarding the financial information of the entities of internal controls. or business activities within the Group to express 229
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund opinions on the consolidated financial statements We communicate with those charged with and on the group management report. We are governance regarding, among other matters, the responsible for the direction, supervision and planned scope and timing of the audit and significant performance of the group audit. We remain solely audit findings, including any significant deficiencies responsible for our opinions. in internal control that we identify during our audit. – Evaluate the consistency of the group management report with the consolidated We also provide those charged with governance with financial statements, its conformity with a statement that we have complied with the relevant [German] law, and the view of the Group's position independence requirements, and communicate with it provides. them all relationships and other matters that may – Perform audit procedures on the prospective reasonably be thought to bear on our independence, information presented by management in the and where applicable, the related safeguards. group management report. On the basis of sufficient appropriate audit evidence we evaluate, From the matters communicated with those charged in particular, the significant assumptions used with governance, we determine those matters that by management as a basis for the prospective were of most significance in the audit of the information, and evaluate the proper derivation consolidated financial statements of the current of the prospective information from these period and are therefore the key audit matters. We assumptions. We do not express a separate describe these matters in our auditor's report unless opinion on the prospective information and on law or regulation precludes public disclosure about the assumptions used as a basis. There is a the matter. substantial unavoidable risk that future events will differ materially from the prospective information. OTHER LEGAL AND REGULATORY REQUIREMENTS Report on the Assurance in accordance with Section 317 (3b) HGB on the Electronic Reproduction of the Consolidated Financial Statements and the Group Management Report Prepared for Publication Purposes We have performed assurance work in accordance with German legal requirements, this accordance with Section 317 (3b) HGB to obtain assurance only extends to the conversion of the reasonable assurance about whether the information contained in the consolidated financial reproduction of the consolidated financial statements and the group management report into statements and the group management report the ESEF format and therefore relates neither to (hereinafter the “ESEF documents”) contained in the information contained in this reproduction nor the file that can be downloaded by the issuer from any other information contained in the the electronic client portal with access protection, above-mentioned electronic file. “05-08-2021-17-35_xbrl_file.zip“; [SHA256-hash value: bf0472ef5c230990 In our opinion, the reproduction of the consolidated b635e8b8a6e0054a897d24d0761d3f15f997a413bc41 financial statements and the group management 6fea] and prepared for publication purposes report contained in the above-mentioned electronic complies in all material respects with the file and prepared for publication purposes complies requirements of Section 328 (1) HGB for the in all material respects with the requirements of electronic reporting format (“ESEF format”). In Section 328 (1) HGB for the electronic reporting 230
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 format. We do not express any opinion on the The company’s management is also responsible for information contained in this reproduction nor on the submission of the ESEF documents together any other information contained in the with the auditor’s report and the attached audited above-mentioned file beyond this reasonable consolidated financial statements and audited assurance opinion and our audit opinion on the group management report as well as other accompanying consolidated financial statements documents to be published to the operator of the and the accompanying group management report German Federal Gazette [Bundesanzeiger]. for the financial year from July 1, 2020, to June 30, 2021 contained in the “Report on the Audit of the The supervisory board is responsible for overseeing Consolidated Financial Statements and the Group the preparation of the ESEF documents as part of Management Report” above. the financial reporting process. We conducted our assurance work on the Our objective is to obtain reasonable assurance reproduction of the consolidated financial about whether the ESEF documents are free from statements and the group management report material intentional or unintentional non-compliance contained in the above-mentioned electronic file in with the requirements of Section 328 (1) HGB. We accordance with Section 317 (3b) HGB and the exercise professional judgement and maintain Exposure Draft of the IDW Assurance Standard: professional scepticism throughout the assurance Assurance in accordance with Section 317 (3b) HGB work. We also: on the Electronic Reproduction of Financial – Identify and assess the risks of material Statements and Management Reports Prepared for intentional or unintentional non-compliance Publication Purposes (ED IDW AsS 410. Accordingly, with the requirements of Section 328 (1) HGB, our responsibilities are further described below. design and perform assurance procedures Our audit firm has applied the IDW Standard on responsive to those risks, and obtain assurance Quality Management 1: Requirements for Quality evidence that is sufficient and appropriate to Management in Audit Firms (IDW QS 1). provide a basis for our assurance opinion. – Obtain an understanding of internal control The company’s management is responsible for the relevant to the assurance of the ESEF documents preparation of the ESEF documents including the in order to design assurance procedures that are electronic reproduction of the consolidated financial appropriate in the circumstances, but not for the statements and the group management report in purpose of expressing an assurance opinion on accordance with Section 328 (1) sentence 4 item 1 the effectiveness of these controls. HGB and for the tagging of the consolidated financial – Evaluate the technical validity of the ESEF statements in accordance with Section 328 (1) documents, i.e. whether the electronic file sentence 4 item 2 HGB. containing the ESEF documents meets the requirements of Commission Delegated In addition, the company’s management is Regulation (EU) 2019/815 on the technical responsible for the internal controls they consider specification for this electronic file. necessary to enable the preparation of ESEF – Evaluate whether the ESEF documents enable documents that are free from material intentional an XHTML reproduction with content equivalent or unintentional non-compliance with the to the audited consolidated financial statements requirements of Section 328 (1) HGB for the and the audited group management report. electronic reporting format. – Evaluate whether the tagging of the ESEF documents with Inline XBRL technology (iXBRL) enables an appropriate and complete machine-readable XBRL copy of the XHTML reproduction. 231
BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund FURTHER INFORMATION PURSUANT TO ARTICLE 10 OF THE EU AUDIT REGULATION We were elected as group auditor by the annual We declare that the opinions expressed in this general meeting on November 19, 2020. We were auditor's report are consistent with the additional engaged by the supervisory board on January 18, report to the audit committee pursuant to Article 11 2021. We have been the group auditor of Borussia of the EU Audit Regulation (long-form audit report). Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien without interruption since financial year 2009/2010. GERMAN PUBLIC AUDITOR RESPONSIBLE FOR THE ENGAGEMENT The German Public Auditor responsible for the engagement is Ralph Fischer. Dortmund, 9 August 2021 KPMG AG Wirtschaftsprüfungsgesellschaft [Original German version signed by] Fischer Huperz Wirtschaftsprüfer Wirtschaftsprüfer [German Public Auditor] [German Public Auditor] 232
CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 RESPONSIBILITY STATEMENT To the best of our knowledge, and in accordance development and performance of the business and with the applicable accounting princi-ples, the the position of the Group, together with a description consolidated financial statements give a true and of the principal opportunities and risks associated fair view of the assets, liabili-ties, financial position with the expected development of the Group. and profit or loss of the Group, and the management report of the Group includes a fair review of the Dortmund, 9 August 2021 Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien Borussia Dortmund Geschäftsführungs-GmbH Hans-Joachim Watzke Thomas Treß Carsten Cramer Managing Director (Chairman) Managing Director Managing Director 233
FINANCIAL CALENDAR 12 November 2021 Disclosure of the quarterly financial report – Q1 fiscal year 2021/2022 2 December 2021 Annual shareholders meeting 2021 For more information, go to: http://aktie.bvb.de/eng 234
ENGL_232_Finanzkalender_GB2021_v01.qxp 02.09.21 12:15 Seite 233 PUBLICATION DETAILS Published by Borussia Dortmund GmbH & Co. KGaA Rheinlanddamm 207-209 44137 Dortmund E-Mail [email protected] Internet www.bvb.de/aktie/eng Contact Mark Stahlschmidt Design Uwe W. Landskron K-werk Kommunikationsdesign www.K-werk.de Photography Alexandre Simoes firo sportphoto Printed by Lensing Druck GmbH & Co. KG Feldbachacker 16 44149 Dortmund
ENGL_01_U1-U4_GB2021_v01.qxp 01.09.21 13:46 Seite 1 2020/2021 ANNUAL REPORT y 2020 – June 2021 sia Dortmund Jul © BORUSSIA DORTMUND 2021 Annual Report Borus