CONTENTS
KEY FIGURES AT A GLANCE 2 PROLOGUE 3 MANAGEMENT'S GREETING 13 REPORT OF THE SUPERVISORY BOARD 14 GOVERNING BODIES AND CORPORATE STRUCTURE 19 THE BVB SHARE 20 SHARE PRICE PERFORMANCE SHAREHOLDER STRUCTURE 22 SHAREHOLDINGS BY MEMBERS OF GOVERNING BODIES INVESTOR RELATIONS CORPORATE GOVERNANCE REPORT 24 THE DFB CUP – BIRTH OF A BVB LEGEND 34 THE 2007/2008 SEASON 38 THE DFB CUP – EMOTION PURE 40 GROUP MANAGEMENT REPORT BUSINESS AND FRAMEWORK CONDITIONS 44 FINANCIAL YEAR 2007/2008 IN REVIEW DEVELOPMENT OF THE MARKET AND COMPETITIVE ENVIRONMENT IN GERMAN PROFESSIONAL FOOTBALL 46 GROUP STRUCTURE AND BUSINESS 49 ORGANISATION OF MANAGEMENT AND CONTROL 53 INTERNAL MANAGEMENT SYSTEM 56 CORPORATE STRATEGY 57 POSITION OF THE GROUP 59 RESULTS OF OPERATIONS SALES DEVELOPMENT 60 Development of significant operating expenses FINANCIAL CONDITION 64 Analysis of capital structure / Analysis of investments / Analysis of liquidity NET ASSETS 65 OVERALL SUMMARY OF RESULTS OF OPERATIONS, FINANCIAL CONDITION AND NET ASSETS THE DFB CUP – MERCHANDISING LEAVING ITS (TRADE)MARK 66 Tradition • Passion • Success COMPENSATION REPORT 70 RISK REPORT 71 Tradition • Passion • Success RISK MANAGEMENT SPECIFIC RISKS 72 Strategic risks / Personnel risks / Competitive risks / Sales risks / Financial risks / Risks jeopardising performance and continued existence THE RISK SITUATION IN SUMMARY 74 REPORT ON EXPECTED DEVELOPMENTS 75 ANTICIPATED DEVELOPMENT OF THE COMPANY EXPECTED GENERAL ECONOMIC ENVIRONMENT RESULTS OF OPERATIONS Anticipated earnings development / Anticipated development of revenues Anticipated development of significant operating expenses / Expected dividends EXPECTED FINANCIAL CONDITION 76 Financial planning / Capital expenditure planning / Anticipated development of liquidity OPPORTUNITIES 77 DEVELOPMENT FORECAST IN SUMMARY THE DFB CUP – SPONSOR ADVERTISING 78 REPORT ON POST BALANCE SHEET DATE EVENTS 82 OTHER DISCLOSURES 83 THE DFB CUP – AN EYE ON DORTMUND… 86 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET 92 CONSOLIDATED INCOME STATEMENT 93 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 94 STATEMENT OF CHANGES IN NON-CURRENT ASSETS CONSOLIDATED CASH FLOW STATEMENT 96 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 97 BASIC PRINCIPLES NOTES TO THE CONSOLIDATED BALANCE SHEET 106 NOTES TO THE CONSOLIDATED INCOME STATEMENT 115 OTHER DISCLOSURES 119 THE DFB CUP – WINNING OVER HEARTS 124 AUDITORS’ REPORT 128 EDITORIAL INFORMATION / FINANCIAL CALENDAR 129 EPILOGUE 130 Business Report Borussia Dortmund, July 2007 - June 2008 2007 - June Dortmund, July Business Report Borussia
Business Report Borussia Dortmund, July 2007 – June 2008 INHALT
KEY FIGURES AT A GLANCE 2 PROLOGUE 3 MANAGEMENT'S GREETING 13 REPORT OF THE SUPERVISORY BOARD 14 GOVERNING BODIES AND CORPORATE STRUCTURE 19 THE BVB SHARE 20 SHARE PRICE PERFORMANCE SHAREHOLDER STRUCTURE 22 SHAREHOLDINGS BY MEMBERS OF GOVERNING BODIES INVESTOR RELATIONS CORPORATE GOVERNANCE REPORT 24 THE DFB CUP – BIRTH OF A BVB LEGEND 34 THE 2007/2008 SEASON 38 THE DFB CUP – EMOTION PURE 40 GROUP MANAGEMENT REPORT BUSINESS AND FRAMEWORK CONDITIONS 44 FINANCIAL YEAR 2007/2008 IN REVIEW DEVELOPMENT OF THE MARKET AND COMPETITIVE ENVIRONMENT IN GERMAN PROFESSIONAL FOOTBALL 46 GROUP STRUCTURE AND BUSINESS 49 ORGANISATION OF MANAGEMENT AND CONTROL 53 INTERNAL MANAGEMENT SYSTEM 56 CORPORATE STRATEGY 57 POSITION OF THE GROUP 59 RESULTS OF OPERATIONS SALES DEVELOPMENT 60 Development of significant operating expenses FINANCIAL CONDITION 64 Analysis of capital structure / Analysis of investments / Analysis of liquidity NET ASSETS 65 OVERALL SUMMARY OF RESULTS OF OPERATIONS, FINANCIAL CONDITION AND NET ASSETS THE DFB CUP – MERCHANDISING LEAVING ITS (TRADE)MARK 66 COMPENSATION REPORT 70 RISK REPORT 71 RISK MANAGEMENT SPECIFIC RISKS 72 Strategic risks / Personnel risks / Competitive risks / Sales risks / Financial risks / Risks jeopardising performance and continued existence THE RISK SITUATION IN SUMMARY 74 REPORT ON EXPECTED DEVELOPMENTS 75 ANTICIPATED DEVELOPMENT OF THE COMPANY EXPECTED GENERAL ECONOMIC ENVIRONMENT RESULTS OF OPERATIONS Anticipated earnings development / Anticipated development of revenues Anticipated development of significant operating expenses / Expected dividends EXPECTED FINANCIAL CONDITION 76 Financial planning / Capital expenditure planning / Anticipated development of liquidity OPPORTUNITIES 77 DEVELOPMENT FORECAST IN SUMMARY THE DFB CUP – SPONSOR ADVERTISING 78 REPORT ON POST BALANCE SHEET DATE EVENTS 82 OTHER DISCLOSURES 83 THE DFB CUP – AN EYE ON DORTMUND… 86 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET 92 CONSOLIDATED INCOME STATEMENT 93 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 94 STATEMENT OF CHANGES IN NON-CURRENT ASSETS CONSOLIDATED CASH FLOW STATEMENT 96 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 97 BASIC PRINCIPLES NOTES TO THE CONSOLIDATED BALANCE SHEET 106 NOTES TO THE CONSOLIDATED INCOME STATEMENT 115 OTHER DISCLOSURES 119 THE DFB CUP – WINNING OVER HEARTS 124 AUDITORS’ REPORT 128 EDITORIAL INFORMATION / FINANCIAL CALENDAR 129 EPILOGUE 130
2
Borussia Dortmund GmbH & Co. KGaA
KEY FIGURES AT A GLANCE
2007/2008 2006/2007 EUR millions 30 June 2008 30 June 2007 Equity 80.8 86.5 Investments 4.8 16.3 Gross revenue 116.3 106.0 Operating profit/loss (EBIT) 5.4 15.6 Financial result (investment income and net interest expense) -10.1 -8.5 Net profit/loss for the period -3.9 10.1 Earnings before interest, taxes, depreciation and amortisation (EBITDA) 20.9 29.1 Cash flows from operating activities 56.6 12.1 Number of shares (in thousands) 61,425 61,425 Earnings per share (in EUR) -0.07 0.17
2 THE DFB CUP – MORE THAN A COMPETITION
3 4 PROLOGUE
A packed Olympic Stadium in Berlin during a match – albeit without players. Front cover of BVB's Spieltag match day programme, 26 February 2008.
Ausgabe 2 I 26. Februar 2008 I 0,50 E SPIELTAG Die letzten Infos vor dem Anpfiff
DFB-POKAL BVB – HOFFENHEIM BERLIN,
TSG Hoffenheim Von der A-Klasse in die zweite Liga BERLIN, wir träumen von BERLIN! Interview: Philipp Laux „Tolle Zeiten bei Borussia!“
Historie Der BVB und die Pokal-Endspiele
DFB-POKAL 2007/2008: ZAHLEN DATEN FAKTEN
5 6 PROLOGUE
The empty Olympic Stadium before a DFB Cup final match, under a yellow sky. Front cover of BVB's Spieltag match day programme, 18 March 2008.
Ausgabe 3 I 18. März 2008 I 0,50 E SPIELTAG Die letzten Infos vor dem Anpfiff
DFB-POKAL BVB – JENA Noch 90MINUTEN bis
FC Carl Zeiss Jena Verein mit einer großen Tradition BERLIN
Interview: Michael Zorc „Chance nicht nehmen lassen!“
BVB im Halbfinale Zu Hause hat es immer geklappt!
DFB-POKAL 2007/2008: ZAHLEN DATEN FAKTEN
7 8 PROLOGUE
Tinga after his goal for a 3:0 victory over Jena, qualifying the team for the final in the DFB Cup. Front cover of “BORUSSIA aktuell” stadium magazine, 22 March 2008.
9 PROLOGUE
Following a 19-year absence, Borussia Dort- Next to the football Bundesliga, the DFB Cup is mund again made it to the national Cup finals in the second national competition in which pro- April 2008, where it fought a close match with fessional clubs participate. And from an athlet- FC Bayern Munich only to lose 1:2 in overtime. ic point of view, it is the shortest path to qualifi- However, the team's automatic 2008/2009 UEFA cation for play at the international level. Just Cup qualification made this defeat more palat- five wins could be enough to send the team to able. The listed football Bundesliga team's the UEFA Cup. return to the international scene goes hand-in- hand with sporting prestige, as well as with In the editorial section of this annual report, lucrative financial returns that will also be Borussia Dortmund takes a look back on the reflected in the financial statements for the competitive cup which has time and again tak- 2008/2009 financial year. en the team on a journey down just that path.
10 THE DFB CUP
THE DFB CUP – BIRTH OF A BVB LEGEND Page 34
THE DFB CUP – EMOTION PURE Page 40
THE DFB CUP – MERCHANDISING LEAVES ITS (TRADE)MARK Page 66
THE DFB CUP – SPONSOR ADVERTISING Page 78
THE DFB CUP – AN EYE ON BERLIN, … DORTMUND Page 86
THE DFB CUP – ... WINNING OVER HEARTS Page 124
EPILOGUE Page 130
11 12 GREETING
Hans-Joachim Watzke Thomas Treß Managing Director (Chairman) Managing Director
Dear Shareholders,
Today the Borussia Dortmund Group presents proven accurate, and we are posting an operat- you this report on financial year 2007/2008 with ing profit for this financial year. the knowledge that our financial restructuring has been brought to completion. Together with Jürgen Klopp, our new head coach we signed at the end of the financial year, we will Three and a half years after facing the very real strive for athletic development that emphasises threat of insolvency, Borussia Dortmund has “sustainability before speed”. Given the outlook regained a solid economic foothold and is so that our financial flexibility is going to increase sound that we no longer need to worry about significantly in the coming years, we are opti- financial problems, not to mention problems that mistic about our potential. would threaten our continued existence.
Undoubtedly, the most important step taken in We are confident that with your patient support that direction last year was the repayment of our and your enduring faith in us, we can achieve our loan from Morgan Stanley. We also successfully goals. extended a number of key agreements to lay an even broader foundation for our future plans. We are pleased that our economic forecast has Yours faithfully,
Hans-Joachim Watzke Thomas Treß Managing Director (Chairman) Managing Director
13 REPORT OF THE SUPERVISORY BOARD
For Borussia Dortmund GmbH & Co. KGaA, the directors were regularly advised and monitored 2007/2008 financial year was marked by three by the Supervisory Board in their management important and pleasing factors. First of all, as had of the Company. Based on reports provided by also been the case last year, our single-entity the management, and on enquiries thereto, financial statements showed that we have once advice thereon and discussion thereof, the again achieved profitability. Secondly, the Supervisory Board confirms the validity and pro- Group's (gross) financial liabilities have been priety of the Com pany’s management and the substantially reduced; the credit from Morgan effectiveness of its risk management and corpo- Stanley Bank International Limited arranged by rate structure as well as its profitability. the credit agreement dated 6 June 2006 was ful- ly repaid. The third, especially significant point During the reporting period, the Supervisory is the success of our Bundesliga team in reaching Board was kept informed in a timely and com- the DFB Cup final, which at the same time quali- prehensive manner through the provision of reg- fied it for one of the top European competitions ular oral and written reports by the management of the 2008/2009 season, the UEFA Cup, for the within the meaning of § 90 German Stock first time since the 2003/2004 season. Corporation Act (AktG). The reports related pri- marily to the liquidity and financial condition, The restructuring process, which commenced at planned investments, corporate planning (finan- the turn of year 2004/2005, was therefore com- cial, investment and human resources planning) pleted in only three years. We want to both and the risk situation and risk management of the expand what we have achieved and to continue Company and the Group. Deviations in the on course. course of business from plans and objectives were explained in detail to the Supervisory Board, which then reviewed and discussed these WORK OF THE SUPERVISORY BOARD, with management. The Supervisory Board MEETINGS reviewed and discussed in detail transactions of In the 2007/2008 financial year, the Supervisory significance to the Company based on reports by Board closely monitored the condition and per- the management. Reports and discussions also formance of the Company and the Group, exer- dealt with questions regarding athletic perform- cising its rights and duties under the law and the ance, which, (with the exception of the men- Company's Articles of Association without tioned participation in the DFB Cup final), was restriction. The general partner and its managing not satisfactory with a view to the team's ranking
14 REPORT OF THE SUPERVISORY BOARD
in the Bundesliga table, which saw it at number sons in order to have quorum, no committees 13 at the end of the season. The Supervisory were created in view of the size of the Board was also kept informed between its meet- Supervisory Board. ings by means of written documentation. This information and the subsequent discussion and The Supervisory Board dealt intensively with the review by the Supervisory Board particularly con- full repayment of the loan under the credit cerned the interim financial reports, i.e. the half- agreement with Morgan Stanley and approved (i) year financial report as well as the quarterly finan- the conclusion of the new agency licensing agree- cial reports, which were published for the first ment between Borussia Dortmund GmbH & Co. time in the reporting period. Outside of meetings, KGaA and SPORTFIVE GmbH & Co. KG, (ii) a the chairman of the Supervisory Board was also credit to be taken out by Borussia Dortmund in regular contact with management and was kept GmbH & Co. KGaA from Westdeutsche apprised of developments in the business as well Immobilienbank AG, (iii) the full repayment of as material events and transactions as they the credits from Morgan Stanley and, (iv) in con- occurred. In the opinion of the Supervisory nection with this, the distribution of capital Board, management fulfilled its duty to inform reserves to goool.de Sportswear GmbH (hence- completely, continuously and in a timely manner. forth: BVB Stadion Holding GmbH). Additional resolutions of the Supervisory Board during the The Supervisory Board met four times in the reporting period essentially related to its motions 2007/2008 financial year (on 6 September 2007, to the ordinary General Shareholders' Meeting 27 November 2007, 11 March 2008 and 3 June on 27 November 2007 and the approval of the 2008). Except for Supervisory Board Member agreement between Borussia Dortmund GmbH Christian Kullmann, who took part in fewer than & Co. KGaA and Ballspielverein Borussia 09 e.V. half of all meetings, all Supervisory Board Dortmund for the leasing of the premises in SIG- Members participated in these meetings. Reso - NAL IDUNA PARK for operating the “BORUS- lutions of the Supervisory Board were adopted in SEUM”. The Supervisory Board also dealt with accordance with the relevant statutory provisions the accounting principles applied in the and provisions of the Company's Articles of 2006/2007 financial year, with management’s Association. Discussions and the adoption of res- report on risk management in the 2007/2008 olutions were always carried out by the entire financial year and with the preparation of the Supervisory Board, which is composed of six per- General Shareholders' Meeting in the previous sons. Since committees must consist of three per- year.
15 CORPORATE GOVERNANCE 2008 as well as the management report for the The Supervisory Board and management of the Company and for the Group (each including an general partner also dealt with the issue of corpo- explanatory report on the figures in accordance rate governance in the reporting period. The with §§ 289 (4) and 315 (4) German Commercial Supervisory Board also reviewed the efficiency of Code (HGB)), which were prepared and submit- its own work, particularly the frequency of its ted within the prescribed time by management, meetings as well as their preparation and imple- were audited along with the accounts in accor- mentation. In November 2007, the Supervisory dance with statutory provisions by the appointed Board and management issued a Statement of auditor, BDO Westfalen-Revision GmbH Wirt- Compliance (Entsprechenserklärung) with the schaftsprüfungsgesellschaft, Dortmund, and were German Corporate Governance Code, taking into issued with an unconfined opinion (unein- account the amendments in the version dated 14 geschränkter Bestätigungsvermerk). Regarding June 2007. The updated Statement of Compliance the existing early-warning risk management sys- dated 6 June 2008, which was based on the ver- tem, the auditor came to the conclusion that man- sion of the Code published on 8 August 2008, was agement had carried out the measures required adopted at the same time as the resolution con- under § 91 (2) AktG, particularly the establish- cerning this report. Both statements were made ment of a monitoring system, in a suitable man- permanently available through publication on the ner, and that the monitoring system is suitable for Internet under http://eng.borussia-aktie.de. Other identifying developments which could endanger details and information in this regard will be pro- the Company as a going concern at an early stage. vided in a separate section of the Annual Report (Corporate Governance Report) in accordance The annual financial statements, the consolidated with Section 3.10 of the Code. financial statements, the management report for the Company and the Group including the risk report and the corresponding auditor's reports SINGLE-ENTITY AND CONSOLIDATED were provided to all members of the Supervisory ANNUAL FINANCIAL STATEMENTS Board. They were explained in detail, discussed 2007/2008 and reviewed by the Supervisory Board together The annual financial statements of Borussia with management in the auditor's presence at the Dortmund GmbH & Co. KGaA and the consoli- Supervisory Board's meeting held on 16 Sep- dated annual financial statements as at 30 June tember 2008. During this meeting, the auditor
16 REPORT OF THE SUPERVISORY BOARD
reported on the material results of the audit, 3. with respect to the reported actions taken, no explained these results and, together with man- facts or circumstances exist that would argue agement, answered questions posed by the for any assessment substantially different than Supervisory Board. that made by management.”
The Supervisory Board is in agreement with the The auditor's report regarding the dependent results of the auditor's review and, based on the company report was also made available to the final result of its own examination, has no objec- Supervisory Board. These documents were also tions. The Supervisory Board adopted the annual discussed and reviewed together with the auditor financial statements of Borussia Dortmund and management in the above-mentioned Super - GmbH & Co. KGaA and the consolidated finan- visory Board meeting. Based on the final result of cial statements as at 30 June 2008 at its meeting its review, the Supervisory Board raised no objec- on 16 September 2008. tion to the general partner's statement at the con- clusion of the dependent company report. The Furthermore, the Supervisory Board conducted Supervisory Board approved and took note of the its own independent audit of the report prepared results of the auditor's review of the dependent by the general partner pursuant to § 312 AktG Company report. concerning relationships with affiliated enterpris- es (dependent company report) for the 2007/2008 The Supervisory Board recommends that the financial year. The dependent company report was General Shareholders' Meeting adopt the annual also reviewed by the auditor and the following financial statements as at 30 June 2008. The auditor's opinion was issued thereon: Supervisory Board also discussed and reviewed the general partner's proposal for the appropriation of “Pursuant to our duly conducted audit and evalu- profit taking into account the interests of limited ation we hereby confirm that liability shareholders and the Company's condition 1. the factual information in the report is accu- (specifically, its financing and capital structure) at rate; its meeting on 16 September 2008; the Supervisory 2. with respect to the reported transactions, the Board agreed with the management's proposal to consideration paid by the Company was not carry the net retained profits for the 2007/2008 unreasonably high, or any disadvantages have financial year of EUR 1,063,842.42 forward. The been compensated for; Supervisory Board also recommends that the
17 REPORT OF THE SUPERVISORY BOARD
actions of the general partner, Borussia Dort- term of which was originally limited until 31 mund Geschäftsführungs-GmbH, to be ratified December 2008) by a further three years, i.e. until (Entlastung) for the 2007/2008 financial year. 31 December 2011.
The Supervisory Board wishes to thank the man- PERSONNEL MATTERS agement, the works council and all the employees Mr. Christian Kullmann, resident in Hamminkeln for their once again successful work over the past and head of Corporate Communications and financial year and for their exceptional efforts on Board Office at the headquarters of Evonik behalf of the Company. Many thanks also to the Industries AG in Essen, was elected to the business partners, shareholders and fans of Supervisory Board of Borussia Dortmund GmbH Borussia Dortmund for the confidence they have & Co. KGaA by the General Shareholders' shown in us. Meeting on 27 November 2007 for the period until the end of the General Shareholders' Dortmund, 16 September 2008 Meeting that ratifies the actions of the 2009/2010 The Supervisory Board financial year. The number of Supervisory Board members therefore meets the requirements of the Articles of Association.
The Executive Committee of the Advisory Board of Borussia Dortmund Geschäftsführungs-GmbH reached an agreement with the managing direc- tor, Thomas Treß, in February 2008 to extend his Gerd Pieper managing director's appointment agreement (the Chairman
18 GOVERNING BODIES AND CORPORATE STRUCTURE
GOVERNING BODIES
BV. BORUSSIA 09 e.V. DORTMUND
Management Board Dr. Reinhard Rauball President Dr. Albrecht Knauf Vice President Dr. Reinhold Lunow Treasurer
BORUSSIA DORTMUND GmbH & Co. KGaA
Supervisory Board Gerd Pieper Chairman Proprietor and Managing Director of Stadtparfümerie Pieper GmbH, Herne
Harald Heinze Deputy Chairman
Ruedi Baer Consultant, B + B Beratungs AG, Watt (Switzerland)
Othmar Freiherr von Diemar Proprietor and manager of Othmar von Diemar Vermögensverwaltung + Beratung, Cologne
Bernd Geske Managing partner of Bernd Geske Lean Communication, Meerbusch
Christian Kullmann Head of the management board office and group communications of EVONIK Industries AG, Essen
BORUSSIA DORTMUND GESCHÄFTSFÜHRUNGS-GmbH
Hans-Joachim Watzke Managing Director (Chairman) Thomas Treß Managing Director
CORPORATE STRUCTURE
BORUSSIA DORTMUND GmbH & Co. KGaA
100.00% BVB Stadionmanagement GmbH 100.00% BVB Stadion Holding GmbH (formerly: goool.de Sportswear GmbH) 100.00% Sports & Bytes GmbH 100.00% BVB Merchandising GmbH (formerly: Borussia Dortmund Beteiligungs-GmbH) 99.74% BVB Stadion GmbH (formerly: Westfalenstadion Dortmund GmbH & Co. KG) 94.90% BVB Beteiligungs GmbH 51.00% B.E.S.T. - Borussia Euro Lloyd Sports Travel GmbH 33.33% Orthomed GmbH
19 THE BVB SHARE
SHARE PRICE PERFORMANCE
Share price performance during the 2007/2008 fi- Homm and which sold its BVB shares during the re- nancial year (1 July 2007 – 30 June 2008) was influ- porting period. The last notification of voting rights enced by positive company releases, by the exit of the to date was made on 28 September 2007, in which major shareholder Absolute Capital Management our Company was informed of a remaining share- Holdings Ltd., which was finalized as at 16 October holding of only 1,242,523 shares (2.023% of the Com- 2007, by the effects of the subprime crisis on the pany's share capital). On 16 October 2007, Absolute global financial markets, which were particularly Capital Management Holdings Ltd. notified us by strongly felt towards the end of 2007, and by the ath- telephone that it had finally sold all of its shares. In letic rollercoaster ride (with the DFB Cup at the contrast, the company still held 9.85% of the share zenith and the championship at the nadir). capital on 29 August 2007. As a result, the BVB share price fell under considerable pressure; however, it Borussia Dortmund GmbH & Co. KGaA’s shares has since risen thanks to positive athletic perform- (BVB shares) started financial year 2007/2008 at ances. On 11 October 2007, the share price was listed € 1.75 and hit their peak for the reporting period on at € 1.59 and rose to € 1.78 on 22 October 2007. 23 July 2007, at € 2.26. This trend continued until the However, in November 2007, the share price then beginning of the season on 10 August 2007. Positive floated in a range of between € 1.70 and € 1.60. On company releases, such as the all-time high of 50,549 the day of the General Shareholders' Meeting on 27 season tickets sold and the successful run-up to the November 2007, the share price was € 1.59. In De- season, provided a backdrop for this development. cember 2007, the share price finally ranged between Initial sporting setbacks in the form of a three-match € 1.60 and € 1.50. On 28 December 2007, the BVB losing streak subsequently led to a modest down- shares closed the stock exchange year at € 1.52. The wards trend, with the share price slipping to € 1.85 by background for this renewed downward trend was 21 August 2007. On 6 September 2007, Borussia not only a lack of sporting success, but also (and to a Dortmund GmbH & Co. KGaA announced its results greater extent) the initial impacts of the subprime cri- for the 2006/2007 financial year. Despite a record sis in the US, which is increasingly being felt. More- profit of € 10.3 million (€ 10.1 million Group-wide), over, second-tier stocks such as the BVB share always the share price subsequently declined from € 1.95 on suffer from share price volatility towards the end of that day, reaching a low of € 1.58 on 27 September the year, since institutional investors in particular of- 2007. The average daily turnovers during this phase ten purge their portfolios of these second-tier stocks of the reporting period were considerably higher at year's end. Nonetheless, high turnovers and the than 250,000 shares traded. This share price per- corresponding liquidity and tradability of the BVB formance and turnover development was caused by share remain positive highlights. The BVB shares the exit of Absolute Capital Management Holdings started the new 2008 calendar year at € 1.49 on 2 Jan- Ltd., which was founded by fund manager Florian uary 2008 and closed each trading day until 14 Jan-
20 THE BVB SHARE
BVB share price performance from July 2007 to June 2008
2.40
2.20
2.00
1.80
EURO 1.60
1.40
1.20
1.00 2.7.07 1.8.07 1.9.07 1.10.07 1.11.07 1.12.07 1.1.08 1.2.08 1.3.08 1.4.08 1.5.08 1.6.08 30.6.08
uary 2008 at exactly the same price. However, down- 2008 after Borussia Dortmund had defeated Carl wards market trends increasingly eroded BVB's share Zeiss Jena on the day before, thus qualifying for the price in the subsequent period. This occurred mainly DFB Cup final in Berlin on 19 April 2008. However, as a result of increasing numbers of negative reports profit-taking then caused the share price to fluctuate in relation to the US subprime crisis and its impacts continuously between € 1.55 and € 1.59. This trend on the national and European credit and banking also marked the fourth quarter. Following the DFB landscape. On 22 January 2008, the share price fell to Cup loss against FC Bayern München on 19 April € 1.36, and bottomed out at € 1.35 on 7 February 2008 and the subsequent apparent solidification of a 2008. The share price then trended sideways until the place in the double-digit region of the championship end of February within a range of between € 1.35 and table, the price of BVB shares again experienced a € 1.42. It rebounded significantly after Borussia Dort- downward trend, slumping to € 1.39 on 30 April mund qualified for the DFB Cup semi-final by beat- 2008. Once it was confirmed that FC Bayern ing TSG Hoffenheim 1899 on 26 February 2008 and München won the championship and that the Mu- once the second-division club Carl Zeiss Jena nich-based team was assured a slot in the UEFA emerged on 2 March 2008 as Borussia's semi-final Champions League, Borussia Dortmund also quali- opponent: BVB shares were € 1,58 on 6 March 2008 fied to play in the UEFA Cup since it had been a and were named "Chart of the Week" on 12 March DFB Cup finalist. For this reason, BVB shares re- 2008 by "Der Aktionär" magazine (12/08) following covered noticeably, quoting at € 1.67 on 26 May this comeback and the breakthrough of the 38-day 2008. On 30 June 2008, the BVB shares closed the line. The share price reached € 1.80 on 19 March 2007/2008 financial year at € 1.55.
21 SHAREHOLDER STRUCTURE
At the balance sheet date 30 June 2008, Borussia • Morgan Stanley International Ltd.: 16.25% Dortmund GmbH & Co. KGaA's share capital • Blue Bay Asset Management plc.: 14.99% amounts to € 61,425,000, divided into the same num- • Bernd Geske: 7.30% ber of no-par value shares. Based on the notifications • BV. Borussia 09 e.V. Dortmund: 7.24% we have received, the shareholder structure of Borus- • Free float: 54.22% sia Dortmund GmbH & Co. KGaA as of 30 June 2008 is as follows:
SHAREHOLDINGS BY MEMBERS OF GOVERNING BODIES
As at 30 June 2008, one member of management of management and the Supervisory Board consti- held 4,545 shares in our Company. As at the same tute 4,492,310 shares and therefore more than 1% of date, the members of the Supervisory Board held a the shares issued by Borussia Dortmund GmbH & total of 4,487,765 shares. The (total) shareholdings Co. KGaA.
INVESTOR RELATIONS
The aim of our Company’s Investor Relations is to ob- ing, long-term rapport with market participants and to tain an appropriate valuation of the BVB share on the provide a true fair view of the Company. capital market. This is founded on continuous and open communication with all the market players. In- Communication online is our central medium, offer- vestor Relations is thus the ideal interface between in- ing the best conditions for equal opportunities and up- stitutional investors, financial analysts and private in- to-date information. Therefore, Borussia Dortmund vestors. The Company seeks to strengthen investor publishes all annual and interim financial reports for and public confidence through the timely and trans- download at http://eng.borussia-aktie.de. Mandatory parent communication of its financial results, busi- disclosures and announcements under capital market ness transactions and strategy, as well as risks and op- law, such as ad hoc disclosures, corporate news, di- portunities. We are committed to communications rectors' dealings and/or advance notice are published principles such as openness, stability, equality and here in a timely manner. At the same time, our serv- credibility, thus making it possible to develop a trust- ice provider DGAP ensures that these notices are
22 THE BVB SHARE
Turnover from July 2007 to June 2008
2000000
1800000
1600000
1400000
1200000
1000000
800000
600000
400000
200000
0 2.7.07 1.8.07 1.9.07 1.10.07 1.11.07 1.12.07 1.1.08 1.2.08 1.3.08 1.4.08 1.5.08 1.6.08 30.6.08
distributed throughout Europe. Further detailed in- General & Entry Standard Conference in Frankfurt formation, such as investor presentations or in-depth am Main on 30 April 2008. Following the Company information on implementing the recommendations presentation, the management was available for one- of the German Corporate Governance Code, are on-one meetings with analysts, private investors and made available on our website. All information is representatives of institutional investors, many of available in German and in English. whom took advantage of this opportunity.
Our primary goal for the 2007/2008 financial year was Finally, we successfully increased our independent cap- to improve our communication with the capital mar- ital market coverage during the reporting period. kets through investor events, such as roadshows, and Bankhaus Lampe KG, Düsseldorf, launched its re- to expand our research coverage. We were successful search coverage, publishing a study of the BVB shares in attaining both goals during the reporting period: on 12 March 2008 with a "Hold" recommendation. Our Company began collaborating with HSBC Prior to this, GSC Research GmbH, also based in Düs- Trinkhaus Burkhardt AG as a designated sponsor on 1 seldorf, published a research report on 30 January 2008. October 2007. In addition to providing "traditional" This report also contained a "Hold" recommendation. In market making services, our designated sponsor ac- its latest update, dated 23 June 2008, Bankhaus Lampe tively supported us in marketing the BVB share, for ex- again issued a "Hold" recommendation. More detailed ample by organising investor meetings in Düsseldorf information can be found under "Capital markets view" in September and October 2007 and in Frankfurt am at our website http://eng.borussia-aktie.de. Main in April 2008. In addition, Managing Director and Chairman Hans-Joachim Watzke and CFO BVB shares are thus enjoying continuous and strong Thomas Treß represented Borussia Dortmund at the capital market coverage.
23 CORPORATE GOVERNANCE REPORT
Having corporate governance that is clearly struc- due regard to shareholders' interests, openness, tured and strictly followed is very important at and transparent corporate communication. The Borussia Dortmund. Corporate Governance stands management of Borussia Dortmund Geschäfts- for transparent and responsible corporate man- führungs-GmbH as the general partner of Borus- agement and supervision aimed at achieving long- sia Dortmund GmbH & Co. KGaA (the "Com- term shareholder value. Key aspects of good cor- pany") and the Supervisory Board of our Company porate governance include efficient co-operation are guided by these principles. between management and the Supervisory Board,
GENERAL INFORMATION ON CORPORATE GOVERNANCE AT BORUSSIA DORTMUND GmbH & Co. KGaA
Section 161 of the German Stock Corporation Act to boost the confidence of international and na- (Aktiengesetz "AktG") requires the management tional investors, customers, employees and the gen- board and supervisory board of any listed com- eral public in the management and supervision of pany to issue an annual statement as to whether and German listed companies. to what extent recommendations by the "Govern- ment Commission for the German Corporate Gov- Many of the Code's recommendations ("should" ernance Code" (Regierungskommission Deutscher provisions) are tailored exclusively to stock corpo- Corporate Governance Kodex) contained in the rations and are at most applicable by analogy to German Corporate Governance Code (the "Code") partnerships limited by shares (Kommanditge- as published in the official section of the Elec- sellschaften auf Aktien, "KGaA"), i.e. to our Com- tronic Federal Gazette (elektronischer Bunde- pany. sanzeiger) were followed in the past and are being or will be followed now or in the future. A KGaA is a hybrid corporate form combining el- ements of a German stock corporation (Aktienge- As a rule, the Code is reviewed once annually and sellschaft) and a limited partnership (Kommandit- amended as required. It contains basic statutory gesellschaft). It is a separate legal entity whose provisions on the management and supervision of share capital is divided into shares which are held German listed companies as well as internationally by at least one shareholder (the general partner) and nationally recognised standards for good and that has unlimited liability as against creditors of the responsible corporate governance. The Code aims Company and by limited liability shareholders to make the German system of corporate gover- (Kommanditaktionäre) that are not personally li- nance transparent and understandable in an effort able for the debts of the Company (§ 278 (1) AktG).
24 CORPORATE GOVERNANCE REPORT
The key differences between a KGaA and a German a Statement of Compliance (Entsprechenser- stock corporation can be characterised as follows: klärung) pursuant to § 161 AktG, taking into ac- count the organisational distinctions of the legal • Borussia Dortmund GmbH & Co. KGaA has no form of a KGaA and their expression in the Articles Management Board. Instead, the general part- of Association. The Statement of Compliance must ner, Borussia Dortmund Geschäftsführungs- be made permanently available to the shareholders. GmbH, is solely responsible for its manage- This is done by publication on our Company's In- ment and representation. This company, in vestor Relations website (http://eng.borussia-aktie.de, turn, is represented by one or more managing under the heading "Corporate Governance [CG]"). directors; Ballspielverein Borussia 09 e.V. Dort- The Statements of Compliance (including explana- mund is the sole shareholder of this company. tions of any deviations from the Code's recom- mendations) provided in November 2007 and Sep- • The rights and duties of the Supervisory Board tember 2008 are reproduced in the annex to this of the KGaA elected by the General Sharehold- Corporate Governance Report. ers' Meeting are limited. Specifically, it has no authority with respect to matters involving per- This Corporate Governance Report herewith sub- sonnel, i.e., no authority to appoint and dismiss mitted by our Company will be published in the An- managing directors at Borussia Dortmund nual Report for the 2007/2008 financial year and on Geschäftsführungs-GmbH or to stipulate the our website at http://eng.borussia-aktie.de under terms of their contracts. Nor is the Supervisory the heading "Publications". Board authorised to adopt internal rules of pro- cedure for the general partner or any list of trans- Transparency actions requiring its consent. Rather, such rights Our Company informs the limited liability share- and duties are vested in the governing bodies of holders and shareholder associations, financial an- Borussia Dortmund Geschäftsführungs-GmbH, alysts and the interested public regularly as to the namely its Advisory Board and the Executive Company's condition and any material changes in Committee created by the Advisory Board. its business. In particular, the ad hoc notices, cor- porate news and directors' dealings disclosures we • Additional distinctions exist with respect to the receive and the current version of the Articles of General Shareholders' Meeting of the KGaA, Association and the financial calendar are all pub- which are primarily controlled by §§ 285 and lished on our website. The Annual Document re- 286 (1) AktG and the Articles of Association of quired by § 10 German Securities Prospectus Act our Company. (Wertpapierprospektgesetz, “WpPG”), which is also available on the website http://eng.borussia- Consequently, the management of the general part- aktie.de under "Corporate Governance", provides ner and the Supervisory Board of Borussia Dort- an overview of the Company's key publications mund GmbH & Co. KGaA are required to provide during the 2007/2008 financial year.
25 The financial calendar contains key Company events Management compensation and can also be viewed on the website Compensation for members of management is http://eng.borussia-aktie.de under "Financial Cal- not stipulated by the Supervisory Board of our endar". Company but rather by the Executive Committee of the general partner’s Advisory Board. Manage- Interested parties were able to watch the press ment compensation comprises two components: a conference on financial statements in real time via fixed amount and a variable component. The fixed live streaming for the first time in the last financial compensation component is stipulated by con- year. Borussia Dortmund GmbH & Co. KGaA's or- tract and is paid out in twelve equal monthly in- dinary General Shareholders' Meeting will be held stalments. The variable compensation component on 25 November 2008 in Dortmund. The interim is based on the performance of the business and financial statements are expected to be published is granted as a bonus contingent on net income for within the timeframes recommended in the Code. the year before taxes and managing directors' Our Company will provide further details via pre- compensation. Any additional non-cash or ancil- liminary announcements. The consolidated finan- lary benefits granted primarily include insurance cial statements and the interim financial reports are benefits at standard market conditions and the prepared in accordance with IFRS accounting prin- provision of a company car. There are no stock op- ciples. The annual financial statements of Borussia tion plans or similar incentive plans. The com- Dortmund GmbH & Co. KGaA were and will con- pensation components provided are reasonable tinue to be prepared in accordance with the provi- in and of themselves and overall. Compensation sions of the German Commercial Code ("HGB"). benefits paid to members of management are set Following the Code's suggestion, we have pub- out in the notes to the annual and consolidated fi- lished and will continue to publish information in nancial statements in the aggregate and broken English on our website. Other means of commu- down by individual. nicating with market participants include the newsletter, "Borussia Invest" and the publication of Supervisory Board compensation analysts' recommendations and research studies Pursuant to § 13 (1) of the Articles of Association, on our website at http://eng.borussia-aktie.de under members of the Supervisory Board receive only a the heading "Capital markets view". fixed compensation, which is set at a compara-
26 CORPORATE GOVERNANCE REPORT
tively low amount of EUR 7,000 annually; the Disclosures relating to the ownership chairman receives twice this amount and the of shares in the Company by manage- deputy chairman receives one and a half times ment or the Supervisory Board this amount. Supervisory Board members' com- Zum 30.06.2008 hielt ein Mitglied der Geschäfts- pensation is set out in the notes to the consolidated führung 4.545 Stückaktien unserer Gesellschaft. financial statements. In the interest of simplicity Die Mitglieder des Aufsichtsrates besaßen zum and in view of the information presented above, gleichen Zeitpunkt insgesamt 4.487.765 Stückak- this information is provided only as an aggregated tien. Der (Gesamt-)Aktienbesitz von Mitgliedern amount rather than being broken down by indi- der Geschäftsführung und des Aufsichtsrats ergibt vidual. In the 2007/2008 financial year, the Com- in Summe 4.492.310 und somit mehr als 1 % der pany did not pay members of the Supervisory von der Borussia Dortmund GmbH & Co. KGaA Board any additional compensation or grant them ausgegebenen Aktien. any additional benefits.
Dortmund, September 2008
On behalf of the Supervisory Board On behalf of Borussia Dortmund Geschäftsführungs-GmbH
Gerd Pieper Hans-Joachim Watzke Thomas Treß
27 I. STATEMENT OF COMPLIANCE BY THE MANAGEMENT AND SUPERVISORY BOARD OF BORUSSIA DORTMUND GMBH & CO. KGAA UNDER § 161 AKTG (NOVEMBER 2007)
The management of the general partner (Borussia the purview of the Executive Committee of Borussia Dortmund Geschäftsführungs-GmbH) and the Su- Dortmund Geschäftsführungs-GmbH. Since January pervisory Board of Borussia Dortmund GmbH & Co. 2006, the management has comprised Hans-Joachim KGaA hereby state in accordance with § 161 AktG that Watzke (managing director/chairman) and Thomas since the last Statement of Compliance issued in No- Treß (managing director). As their areas of responsi- vember 2006, Borussia Dortmund & Co. KGaA has bility have been adequately defined in their respective complied with the recommendations of the German contracts and the managing directors otherwise exer- Corporate Governance Code ("DCGK") dated 12 June cise their statutory powers and powers under the Ar- 2006 up until publication of the new version of the ticles of Association in close co-operation, the com- DCGK in the electronic Federal Gazette on 20 July petent governing bodies of Borussia Dortmund 2007, and has also complied with the recommenda- Geschäftsführungs-GmbH have not in the past re- tions of the DCGK dated 14 June 2007 from the time garded it as necessary to also enact separate rules of of its publication in the electronic Federal Gazette on procedure for management. 20 July 2007, and the recommendations in the amended version dated 14 June 2007 will be complied As to Sections 4.2.2 (1), 4.2.3 (3, 6), 4.2.5 (2) with in the future; excepted herefrom are the follow- sentence 2 and 7.1.3: Section 7 of Borussia Dort- ing deviations, which in part are due to organisational mund GmbH & Co. KGaA's Articles of Association distinctions specific to the legal form of the KGaA and provides that the general partner is entitled to reim- their expression in the Articles of Association: bursement of personnel costs and the cost of materi- als incurred in connection with managing the Com- As to Section 3.8 (2): The D&O insurance does not pany, plus compensation equivalent to 3 % of any provide for any deductible. Based on our under- otherwise accruing net income for the year of the standing, such an agreement would not be suitable as Company. Compensation and the compensation sys- an incentive, nor would it strengthen the sense of re- tem for managing directors of Borussia Dortmund sponsibility with which members of corporate bodies Geschäftsführungs-GmbH are otherwise determined conduct their duties and functions. by its Executive Committee (deviation from the pow- ers of the Supervisory Board stipulated under Section As to Section 4.2.1 sentence 2: The Supervisory 4.2.2 (1) due to the Company's legal form). Com- Board of Borussia Dortmund GmbH & Co. KGaA has pensation for the managing directors consisting of no authority with respect to personnel matters; this is components that are long-term or risk-based in na-
28 CORPORATE GOVERNANCE REPORT
ture, such as stock options, was not and is not being the long term (in accordance with Section 5.1.2 (1) provided, nor are pension commitments, and thus no sentence 2). The Executive Committee of the Advi- further disclosures or explanations primarily relating sory Board of Borussia Dortmund Geschäftsführungs- to these issues were or will be made (deviation from GmbH reached an agreement with the managing di- Section 4.2.3 (3, 6), Section 4.2.5 (2) sentence 2 and rector and chairman, Hans-Joachim Watzke, in June Section 7.1.3). 2007, which was earlier than required, to extend his managing director's agreement (the term of which As to Section 4.3.4 sentence 3: Material transac- was originally limited until 31 December 2008) by a tions between the general partner and certain related further three years, i.e. until 31 December 2011. This parties on the one hand, and the Company on the was in order to show continuity in terms of who would other, within the meaning of §§ 89, 112 in conjunction head up management (in deviation from Section 5.1.2 with § 278 (3), 283 No. 5 AktG (e.g., loans) require the (2) sentence 2). The Executive Committee has and involvement of the Supervisory Board. In this re- will have in the future the discretion to decide in the spect, the recommendation was and is being followed. case of pending (re)appointments of managing di- The Supervisory Board is not otherwise authorised to rectors on the age limit for managing directors of the adopt a list of transactions requiring its consent for the general partner, without this generally needing to be general partner or its managing directors. stipulated (in deviation from Section 5.1.2 (2) sen- tence 3). As to Section 4.3.5: Because the Supervisory Board lacks authority in matters involving personnel, the As to Sections 5.2 (2), 5.3.1 sentence 1, 5.3.2 Advisory Board of Borussia Dortmund Geschäfts- and 5.3.3: Committees, specifically an audit com- führungs-GmbH is responsible for approving any side mittee, were not and are not being established by the activities of the managing directors of the general Supervisory Board, because it has only 6 members, partner. Subject to this proviso, the recommenda- and committees would have to consist of 3 members tions have been and are being complied with mutatis in order to have quorum. mutandis. The Company intends to retain its existing practice in this regard, in other words, all pending matters will be As to Section 5.1.2: These Code recommendations dealt with by the full Supervisory Board. It is for the directed at the supervisory boards of stock corpora- same reason that the Supervisory Board does not tions are at most applicable by analogy to our Com- have a nomination committee as is now recom- pany, whose Supervisory Board does not have any mended by the Code. In any case, if a nomination authority with respect to personnel matters. The man- committee is established, the Code requires that it aging directors and the Executive Committee of comprise shareholder representatives only; however, Borussia Dortmund Geschäftsführungs-GmbH are that is already the case with regard to the Supervisory responsible for making successor arrangements over Board.
29 As to Section 5.4.1 sentence 2: There has been no man receives one and a half times this amount. It was set age limit for Supervisory Board members to date, and is considered sufficient to provide the informa- nor will there be any in the future. The Supervisory tion on the Supervisory Board's compensation only as Board feels that such a limitation is not justified as an aggregate figure in the Corporate Governance against other criteria for proposed candidates for the Report as well as in the notes to the consolidated fi- election of Supervisory Board members. nancial statements.
As to Section 5.4.3 sentence 3: Proposals for can- As to Section 5.5.3 sentence 1: The recommenda- didates for the chair of the Supervisory Board have tion that the Supervisory Board inform the General not been made public in the past, nor will they be Shareholders' Meeting in its report of any conflicts of made public in the future, because the Supervisory interest that have arisen and how these were or are Board feels that the individual election of its members being handled has not been and is not being followed. is sufficient and does not feel that a vote at the Gen- The principle of confidentiality of discussions within eral Shareholders' Meeting for or against a given can- the Supervisory Board (see, § 116 sentence 2 AktG didate is practicable in view of his/her position on the and Section 3.5 (1) sentence 2 of the Code) is ac- Supervisory Board. corded priority over this.
As to Section 5.4.7 (2, 3): Pursuant to § 13 (1) of As to Section 7.1.2 sentence 3: The interim reports the Articles of Association, the members of the Su- were and will be published within a reasonable pe- pervisory Board receive only a comparatively low riod, which may in the specific case exceed 45 days af- fixed annual compensation of EUR 7,000; the chair- ter the end of the reporting period. man receives twice this amount and the deputy chair-
Dortmund, November 2007
On behalf of the Supervisory Board On behalf of Borussia Dortmund Geschäftsführungs-GmbH
Gerd Pieper Hans-Joachim Watzke Thomas Treß
30 CORPORATE GOVERNANCE REPORT
II. STATEMENT OF COMPLIANCE BY THE MANAGEMENT AND SUPERVISORY BOARD OF BORUSSIA DORTMUND GMBH & CO. KGAA UNDER § 161 AKTG (16 SEPTEMBER 2008)
The management of the general partner (Borussia Watzke (managing director/chairman) and Thomas Dortmund Geschäftsführungs-GmbH) and the Su- Treß (managing director). As their areas of responsi- pervisory Board of Borussia Dortmund GmbH & Co. bility have been adequately defined in their respective KGaA hereby state in accordance with § 161 AktG that contracts and the managing directors otherwise exer- since the last Statement of Compliance issued in No- cise their statutory powers and powers under the Ar- vember 2007, Borussia Dortmund & Co. KGaA has ticles of Association in close co-operation, the com- complied with the recommendations of the German petent governing bodies of Borussia Dortmund Corporate Governance Code (the "Code") dated 14 Geschäftsführungs-GmbH do not regard it and have June 2007 up until publication of the new version of not in the past regarded it as necessary to also enact the Code in the electronic Federal Gazette on 8 Au- separate rules of procedure for management. gust 2008, and has also complied with the recom- mendations of the Code dated 6 June 2008 from the As to Sections 4.2.2 (1), 4.2.3 (3, 6) 4.2.5 (2) sen- time of its publication in the electronic Federal tence 2 and 7.1.3: Section 7 of Borussia Dortmund Gazette on 8 August 2008, and the recommendations GmbH & Co. KGaA's Articles of Association pro- in the amended version dated 6 June 2008 will be vides that the general partner is entitled to reim- complied with in the future; excepted herefrom are bursement of personnel costs and the cost of materi- the following deviations which in part are due to or- als incurred in connection with managing the ganisational distinctions specific to the legal form of Company, plus compensation equivalent to 3 % of any the KGaA and their expression in the Articles of As- otherwise accruing net income for the year of the sociation of our Company: Company. Compensation and the compensation sys- tem for managing directors of Borussia Dortmund As to Section 3.8 (2): The D&O insurance does not Geschäftsführungs-GmbH have been and are other- provide for any deductible and no modification of this wise determined and regularly reviewed by its Exec- provision is planned. Based on our understanding, utive Committee. This has previously been the case such an agreement would not be suitable as an incen- for advising (deviation from the powers of the Su- tive, nor would it strengthen the sense of responsibil- pervisory Board stipulated under Section 4.2.2 (1) ity with which members of corporate bodies conduct due to the Company's legal form). Compensation for their duties and functions. the managing directors consisting of components that are long-term or risk-based in nature, such as stock As to Section 4.2.1 sentence 2: The Supervisory options, was not and is not being provided, nor are Board of Borussia Dortmund GmbH & Co. KGaA has pension commitments, and thus no further disclo- no authority with respect to personnel matters; this is sures or explanations primarily relating to these issues the purview of the Executive Committee of Borussia were or will be made (deviation from Section 4.2.3 (3, Dortmund Geschäftsführungs-GmbH. Since January 6), Section 4.2.5 (2) sentence 2 and Section 7.1.3). 2006, the management has comprised Hans-Joachim
31 As to Section 4.2.3 (4) sentences 1, 2 and 5: The matters, the managing directors and the Executive new recommendations concerning compliance with Committee of Borussia Dortmund Geschäftsführungs- severance pay caps (Abfindungs-Caps) when con- GmbH are responsible for making successor arrange- cluding management board employment agreements ments over the long term. Subject to this proviso, the for cases of an early termination of employment on the recommendations have been and are being complied management board without cause or as a result of a with mutatis mutandis. change of control that were introduced in the new ver- sion of the Code on 8 August 2008 are intended for su- As to Section 5.1.2 (2) sentence 3: The Executive pervisory boards of stock corporations. For Borussia Committee of Borussia Dortmund Geschäftsführungs- Dortmund GmbH & Co. KGaA, whose Supervisory GmbH has and will have in the future the discretion Board does not have any authority with respect to to decide in the case of pending (re)appointments of personnel matters, the recommendations can be ap- managing directors on the age limit for managing di- plied by analogy to apply to the Executive Committee rectors of the general partner; without this generally of Borussia Dortmund Geschäftsführungs-GmbH. needing to be stipulated.
As to Section 4.3.4 sentence 3: Material transac- As to Sections 5.2 (2), 5.3.1 sentence 1, 5.3.2 and tions between the general partner and certain related 5.3.3: Committees, specifically an audit committee, parties on the one hand, and the Company on the were not and are not being established by the Super- other, within the meaning of §§ 89, 112 in conjunction visory Board, because it has only 6 members, and with §§ 278 (3), 283 No. 5 AktG (e.g., loans) require committees would have to consist of 3 members in or- the involvement of the Supervisory Board. In this re- der to have quorum. The Company intends to retain spect, the recommendation was and is being followed. its existing practice in this regard, in other words, all The Supervisory Board is not otherwise authorised to pending matters will be dealt with by the full Super- adopt a list of transactions requiring its consent for the visory Board. It is for the same reason that the Super- general partner or its managing directors. visory Board does not have a nomination committee as is now recommended by the Code. In any case, if a As to Section 4.3.5: Because the Supervisory Board nomination committee is established, the Code re- lacks authority in matters involving personnel, the Ex- quires that it comprise shareholder representatives ecutive Committee of Borussia Dortmund Geschäfts- only; however, that is already the case with regard to führungs-GmbH is responsible for approving any side the Supervisory Board. activities of the managing directors of the general partner. Subject to this proviso, the recommendations As to Section 5.4.1 sentence 2: There has been no have been and are being complied with mutatis mu- set age limit for Supervisory Board members to date, tandis. nor will there be any in the future. The Supervisory Board feels that such a limitation is not justified as As to Section 5.1.2 (1) sentence 2: As the Supervi- against other criteria for proposed candidates for the sory Board has no authority with respect to personnel election of Supervisory Board members.
32 CORPORATE GOVERNANCE REPORT
As to Section 5.4.3 sentence 3: Proposals for can- dation that the Supervisory Board inform the General didates for the chair of the Supervisory Board have not Shareholders' Meeting in its report of any conflicts of been made public in the past, nor will they be made interest that have arisen and how these were or are public in the future, because the Supervisory Board being handled. The principle of confidentiality of dis- feels that the individual election of its members is cussions within the Supervisory Board (see, § 116 sufficient and does not feel that a vote at the General sentence 2 AktG and Section 3.5 (1) sentence 2 of the Shareholders' Meeting for or against a given candidate Code) has been and is regularly accorded priority is practicable in view of his/her position on the Su- over this. pervisory Board. As to Section 7.1.2 sentence 2: This new recom- As to Sections 5.4.6 (2) sentence 1 and (3) sen- mendation, which appeared in the new edition of the tence 1: Pursuant to § 13 (1) of the Articles of Asso- Code published on 8 August 2008, is not being fol- ciation, the members of the Supervisory Board re- lowed, as the goal of management publishing interim ceive only a comparatively low fixed annual financial reports immediately after publication is be- compensation of EUR 7,000; the chairman receives ing given priority over the Code's recommendation twice this amount and the deputy chairman receives that interim financial reports be discussed by the Su- one and a half times this amount. It was and is con- pervisory Board together with management before sidered sufficient to provide the information on the Su- publication. Otherwise, these financial reports are dis- pervisory Board's compensation only as an aggregate cussed and reviewed by the Supervisory Board. figure in the Corporate Governance Report as well as in the notes to the consolidated financial statements. As to Section 7.1.2 sentence 4: Interim reports were and will be published within a reasonable period, As to Section 5.5.3 sentence 1: It remained and will which may in the specific case exceed 45 days after the remain possible to elect not to follow the recommen- end of the reporting period.
Dortmund, 16 September 2008
On behalf of the Supervisory Board On behalf of Borussia Dortmund Geschäftsführungs-GmbH
Gerd Pieper Hans-Joachim Watzke Thomas Treß
33 THE DFB CUP – BIRTH OF A BVB LEGEND
34 THE DFB CUP
24 June 1989: Norbert Dickel celebrates the first of two goals he scored during the DFB Cup final match against Werder Bremen. BVB wins 4:1. 35 THE DFB CUP – BIRTH OF A BVB LEGEND
The triumphant champions: BV. Borussia 09 e.V. Dortmund, the winner of the 1965 DFB Cup.
German Federal President Heinrich Lübke presents team captain Alfred Schmidt with the trophy (22 May 1965).
The DFB Cup has a special place in Borussia championship wins in 1956, 1957, and 1963. All Dortmund's history. In the 1965/1966 season, the same, BVB missed its chance at twin champi- this trophy paved the way for the first ever victo- onship and Cup victories in summer 1963, losing ry by a German football team in a European club 3:0 against Hamburger SV at the Cup final. competition: On 5 May 1966, the DFB Cup win-
ners BVB celebrated a 2:1 overtime victory at the After four vain attempts in 1975, 1980, 1983 and European Cup Winner's Cup at Hampden Park in 1986, Borussia Dortmund fought its way back Glasgow, thus crowning the second “golden decade” in the club's history.
The first “golden decade” also saw the team par- ticipate in DFB Cup finals following German
A crowd of 250,000 give a hero's welcome to Borussia Dortmund, the 1989 DFB Cup champions.
36 THE DFB CUP
Friedensplatz square bursts at the seams the day after the team's 4:1 Cup final victory against Werder Bremen (25 June 1989).
into the DFB Cup finals on 24 June 1989. Werder Bremen was their opponent and the clear The day before, Michael Zorc holds the Cup high for all to favourite in this final match. Yet the Borussia see in Berlin. The trophy is made of fire-gilt sterling silver. Dortmund squad rose above expectations to Before 1991, it was 47 cm tall claim a 4:1 win, with Norbert Dickel scoring two and weighed 12 and a half pounds. goals and Frank Mill and Michael Lusch each scoring once.
The club's first title victory in 23 years woke a “sleeping giant”, ringing in the team's third “golden decade”. Fuelled by its Cup victory, Borussia Dortmund escaped the lower regions of the Bundesliga table. Three years later, in 1992, the team took second place in the German cham- pionship; 12 months later, it made it to the UEFA Cup final match. In 1995 and 1996, it became the German champion. The team's crowning achieve- There's no telling what positive benefits will ment came a year later, as it became the first arise from the team's qualification for the 2008 German football club to win the UEFA Champions DFB Cup finals. At any rate, the euphoria and League and then the Intercontinental Cup. excitement are reminiscent of 1989.
37 Borussia Dortmund
SPORTING DEVELOPMENT
ONLY 13TH IN THE BUNDESLIGA – BUT DFB CUP PUTS BVB BACK ON THE EUROPEAN SCENE
The 2007/2008 Bundesliga season will not be re- form against the best clubs and the relegation teams, membered fondly in the history of Borussia Dort- it failed to pick up points against teams in the league's mund. 13th place is far short of the expectations raised “grey zone”. in the beginning of the season. The stats are noteworthy. BVB scored six points However, there was still some cause for joy. Although against last year's champion, VfB Stuttgart, and BVB had not had much of a presence at the DFB turned out its best away performance in a 2:1 match Cup since the last time it claimed the championship at Gottlieb-Daimler-Stadium. The team's 3:2 match in 1989, the team turned out brilliant performances at SIGNAL IDUNA PARK was also tremendous, es- this year, as it defeated Magdeburg, Frankfurt, Bre- pecially given the fact that the line-ups for that match men, Hoffenheim and Jena to make it to the April did not bode well for black and yellow. 2008 final in Berlin. Borussia Dortmund won two out of three matches in Despite its heartbreaking loss to FC Bayern Munich the Bundesliga and in the DFB Cup against Werder at the final, the team qualified to compete interna- Bremen, although the team's Bundesliga match de- tionally. The reason for this is that Bayern Munich, feat in Bremen was ushered in by a bad call on the which also won the German championship, has se- part of a referee. Both in their league home game cured a spot in the Champions League, meaning (0:0) and in the Cup final (1:2 in overtime), Borussia that the opponent they defeated at the DFB final also came closer to victory than favourite Bayern qualifies for the UEFA Cup. After long years of with- Munich. And finally, Bayer Leverkusen, a team that drawal, Dortmund again looks forward to taking part was long one of the top in the league, also picked up in international matches. “Europe, here we come!” only one point out of a possible six against BVB.
Yet on the other hand, BVB's Bundesliga play was Borussia Dortmund also held up its own against the more mixed: Although Borussia Dortmund was in top five teams in the relegation competition at the end of
38 THE 2007/2008 SEASON
the season. In the matches against Rostock, Duis- burg, Nuremberg, Bielefeld and Cottbus, the team gained 18 out of a possible 30 points – an average of 1.8 points per game. To place this in perspective, even though it ended the season nine spots higher on the table than BVB, Hamburger SV fared similarly.
Borussia's tendency to generally play well and score high only against the teams in the top and bottom thirds of the table was one of the key issues dis- cussed in the team's post-season analysis.
It was the team's performance against clubs pre- sumed in the run-up to the season to be in the “grey zone” that put Borussia Dortmund in the lower half Coach Jürgen Klopp. of the Bundesliga table for the first season in eight years. Borussia only gained four out of a possible 30 points on the table in their matches against Wolfs- burg, Hanover, Berlin, Karlsruhe and Frankfurt. All This is one of the main problems to be resolved by too often, there was a lack of consistency in the team Jürgen Klopp, the club's popular new coach and of coach Thomas Doll, who left BVB at the end of the great white hope. The sale of nearly 50,000 season season. And all too seldom did the team show the will tickets again for 2008/2009 is proof that the fans are to triumph in less prestigious matches. prepared to follow BVB along this new path.
39 THE DFB CUP – EMOTION PURE
40 THE DFB CUP
18 March 2008: The Borussia Dortmund team celebrates its qualification for the final after defeating Carl Zeiss Jena 3:0. 41 THE DFB CUP – EMOTION PURE
Even sociologists are scratching their heads: On 19 April 2008, 50,000 BVB supporters trav- Borussia Dortmund's fan base behaves in a way elled to Berlin to be there live for the final, that resembles a mass movement. A “distinct although only 22,000 of them were able to get sense of community” is often cited as a reason advance sale tickets. Ultimately, some 30,000 for this urge to travel. managed to get their hands on one of the covet- ed tickets for the DFB Cup final – the remaining Whether for the crucial 1986 relegation match in 20,000 watched the final on the big screens at Düsseldorf, which decided the fate of the team in Brandenburg Gate or along Ku'damm boulevard, the league, or for the 1989 and 2008 DFB Cup once again proving to be excellent ambassadors finals: Tens of thousands of fans travelled with for their club and their city. their team.
Even before the semi-final, BVB fans are getting excited.
42 THE DFB CUP
The 30,000 Borussia supporters in the Olympic 19 April 2008: More than 15,000 fans Stadium not only kept up a party atmosphere, fill Dortmund's they also made considerably more noise than Friedensplatz square to watch the broadcast their “opponents” from Munich, letting the BVB from Berlin. There was no end to the cheering squad know that it was responsible for a sport- after the 1:1 equaliser. ing sensation. “The mood in the stadium was unique. For 120 minutes, all you could hear was our fans. You also played a role in pushing the But where were the Bayern Munich fans? You ball across the line in the 92nd minute – the had to look hard to find red and white in Berlin. crowd just went wild”, wrote the team later in an Black and yellow were clearly the dominant open letter to thank its fans. colours in the capital on that cold April weekend.
More than 30,000 BVB followers man- aged to get a ticket to the final match against Bayern Munich. Berlin's Olympic Stadium is a sea of black and yellow.
43 BUSINESS AND FRAMEWORK CONDITIONS
FINANCIAL YEAR 2007/2008 IN REVIEW
The trust that Borussia Dortmund GmbH & Co. This means that the critical framework conditions for KGaA's shareholders placed in us in 2007/2008 was the future of the Borussia Dortmund Group are in reflected in their vote at the General Shareholders' place. However, we will continue to need patience Meeting to approve the actions of the management and perseverance – especially in driving forward our and the Supervisory Board by over 99%, and has pro- sporting development, which is the basic foundation vided us the tail-wind needed to bring the restruc- of future economic success. turing of our Company to completion. The signing at the end of the financial year of Jürgen The crucial step at this juncture was the early repay- Klopp to be head coach starting next season embod- ment of the loan from Morgan Stanley, which was ies the maxim “sustainability before speed”. This man made possible by entering into an agreement with our had long been in Borussia Dortmund's sights as their marketing partner Sportfive, extending our partner- top choice for coach. By signing him, the team hopes ship until 2020. Furthermore, a number of key agree- to bring to life the fundamentals of the sporting phi- ments were extended with partners who will assure losophy that had been defined together with the man- the stability of our future business development. agement.
The early extension of our partnership with our pri- That philosophy entails building up a strong team of mary sponsor EVONIK Industries until 2011 is just young, ambitious and talented players – not neces- one example. This followed the – also early – exten- sarily from our own youth teams – backed up by sion until 2016 of our agreement with SIGNAL experienced “pillars”. Over the medium term, that IDUNA concerning the stadium name “SIGNAL team will be able to hold its own again against the IDUNA PARK”. The newly signed agreement with top teams in the German Bundesliga and interna- the Radeberger Group will remain in force until tionally. 2011 and stipulates that from now on, the only beer served in SIGNAL IDUNA PARK will be the In view of the agreements described above that were Dortmunder “Brinkhoff's No. 1”. concluded in the 2007/2008 financial year, and given
DFB Cup Match day 1 4 August 2007 12 August 2007 1. FC Magdeburg 1:4 BVB BVB 1:3 MSV Duisburg
Tinga and Co. had a harder time with BVB stumbles over the “Zebras” at kick- Magdeburg than the final score suggests. off: Sebastian Kehl going head to head with Manasseh Ishiaku. 44 MANAGEMENT REPORT
the fact that the Group's financial leeway will contin- the team fought for and won a spot in a European ue to grow, this goal appears quite realistic. competition through to its successful performance in the DFB Cup, where it went all the way to the finals The team's further sporting development will go in Berlin. hand-in-hand with the further development of its atti- tude, performance and confidence. This team, this In the new financial year, our return to the European club, this Company identifies with Dortmund, with sporting scene will serve to motivate us to continue the region in which we live and work, in fundamental patiently on the successful path we have chosen. The ways that are clear for all: it is driven to succeed, it is fact that nearly 50,000 season tickets were again sold unpretentious, it has a fighting spirit, it is sincere. for the 2008/2009 season is confirmation that BVB's fans are prepared to accompany us along this path. Our 13th place ranking in the Bundesliga made the last sporting season a disappointing one. Nonetheless,
Key financial indicators Overview of the key financial figures Borussia Dortmund Group
2007/2008 2006/2007 EUR millions 30 June 2008 30 June 2007 Equity 80.8 86.5 Investments 4.8 16.3 Gross revenue 116.3 106.0 Operating profit (EBIT) 5.4 15.6 Financial result (investment income and net interest expense) -10.1 -8.5 Net profit/loss for the period -3.9 10.1 Earnings before interest, taxes, depreciation and amortisation (EBITDA) 20.9 29.1 Cash flows from operating activities 56.6 12.1 Number of shares (in thousands) 61,425 61,425 Earnings per share shares ( in EUR ) -0.07 0.17
Match day 2 Match day 3 18 August 2007 25 August 2007 FC Schalke 4:1 BVB BVB 3:0 Cottbus
Whatever Gerald Asamoah is doing He came, he saw, he scored – twice! with Robert Kovac in this scene, it In as a substitute, Diego Klimowicz doesn't look gentle... scores two goals. 45 DEVELOPMENT OF THE MARKET AND COMPETITIVE ENVIRONMENT IN GERMAN PROFESSIONAL FOOTBALL
Ticketing With an average of 38,975 (previous year: 39,547) Although the 2008/2009 Bundesliga season has yet spectators per match, the Bundesliga held its posi- to begin, one record has already been broken: The tion as number one internationally. In order to eighteen first division clubs have sold well more improve comparability with the other leagues, DFL than 400,000 season tickets before the first kick-off Deutsche Fußball Liga has decided, with immediate of the new season. This figure has never been effect, to report absolute spectator numbers. Until reached before in Bundesliga history. One can only now, spectator reports only accounted for tickets guess how strong the demand for season tickets real- sold. Henceforth, the comparative figures will also ly is since many clubs have suspended season ticket include complimentary and free tickets. 11,926,395 sales after reaching their maximum limit. fans attended Bundesliga matches during the 2007/2008 season. Borussia Dortmund welcomed With 49,500 season tickets sold, Borussia Dortmund 1,218,054 spectators to its matches, placing it at the has once again taken the lead, arriving at just below top of the list, followed by FC Bayern Munich its record for last year due to the fact that it has held (1,181,709) and FC Schalke 04 (1,040,901). Just back a number of standing-room-only tickets. under 55% of the tickets sold were season tickets. According to DFL Deutsche Fußball Liga, this was During the 2007/2008 season, the Bundesliga due not least to solid infrastructure, state-of-the-art recorded a 1.5% drop in spectators. However, stadiums and the lowest admission prices compared licence football – comprising both the Bundesliga to all other top European leagues. and the Second Bundesliga – recorded a 1.38% increase in spectators. This is attributable to the fact TV marketing that teams with a long-standing tradition and those The three-year contract for TV marketing entered drawing large numbers of spectators – such as into in December 2005 for a total amount of over Borussia Mönchengladbach, TSV 1860 München, € 1.2 billion expires on 30 June 2009. 1. FC Kaiserslautern and 1. FC Köln – were in the Second Bundesliga. Furthermore the three teams In October 2007, DFL Deutsche Fußball Liga nego- that were relegated to the Second Bundesliga in the tiated a follow-up agreement with Sirius SportMedia 2006/2007 season hosted roughly 100,000 spectators GmbH intended to cover at least € 3 billion in more at home matches last season than the three domestic marketing alone for the coming six years. teams that were promoted. This arrangement represents a fundamentally new
Match day 4 Match day 5 1 September 2007 14 September 2007 Hansa Rostock 0:1 BVB BVB 3:0 Werder Bremen
Giovanni Federico celebrates his first goal for Mladen Petric: Double scorer in the BVB. The former Karlsruhe player scored the match against Bremen. goal in the 1:0 victory over FC Hansa. 46 MANAGEMENT REPORT
marketing model that avoids dependencies and which represents the clubs' interests at the European opens up new options. This marketing model rests level, signalled the launch of a new era in football. on three pillars: According to the joint declaration of FIFA and • DFL will commission an agency to award media UEFA, the formation of the ECA will restore har- rights in German-speaking countries from 2009 to mony between the governing bodies and the clubs. 2015 The signing of the joint memorandum of under- • Bundesliga will produce its own, journalistically standing means that UEFA will consider the ECA as independent programme for live pay-per-view tel- a single body that may represent the interests of the evision clubs at the European level, while the ECA recog- • DFL will form a separate company to market nises UEFA as the supreme body for football in international media rights Europe and FIFA as the supreme body for football worldwide. The German Federal Cartel Office (Bundes - kartellamt) has initiated investigations into the The ECA, which is expected to comprise a total of 103 agreement with Sirius SportMedia GmbH, as well clubs from the 53 UEFA member countries, is an inde- as the centralised marketing of media rights. As a pendent, autonomous body that represents European result, it has not yet been possible to proceed with clubs and their interests vis-à-vis FIFA and UEFA. The the awarding of media rights as planned by DFL. first joint resolution stipulates that in the coming six The Bundeskartellamt rejected the league associa- years, funds will paid to those clubs sending interna- tion's plans in July 2008 on the basis that the model tional athletes to the World and European Cups. did not sufficiently satisfy the requirements of antitrust law. The unauthorised dispatch of Bundesliga athletes to the Olympic Games caused a stir recently. These ath- However, the Bundeskartellamt did not raise objec- letes had been nominated to represent their countries tion to the German Football Association's (Deutscher at the Olympic Games, although they had not Fußball-Bund, “DFB”) centralised marketing of the obtained permission from their employers. After DFB Cup in 2011/2012. some confusion and differences of opinion between associations and governing bodies, it was decided that International players Bundesliga clubs were not required to release their The founding of the European Club Association players for the Olympic football tournament. This (ECA) and the signing of a memorandum of under- final ruling was pronounced by the international standing between UEFA and the new organisation, Court of Arbitration for Sport.
Match day 6 Match day 7 22 September 2007 25 September 2007 Hertha BSC 3:2 BVB BVB 0:3 Hamburger SV
An acrobatic bicycle kick: Diego In a tight squeeze: Christian Wörns and Klimowicz sizes up the situation in Dede (right) allow Paolo Guerrero no Hertha BSC Berlin's penalty box. passage. 47 Transfer system sequences of a breach of contract by a player. This is A good 12 years after the groundbreaking Bosman relevant solely to international transfers; player trans- ruling, the CAS ruling in the case of the Scottish play- fers within the Bundesliga are not affected by the er Andy Webster has caused an uproar in profession- CAS ruling. DFL Deutsche Fußball Liga GmbH is al football. Although he was under contract with the currently scrutinising the precise consequences of Scottish club Heart of Midlothian, Webster trans- this ruling. ferred to Wigan Athletic in the English Premier League. The Court of Arbitration for Sport (CAS) has In cooperation with the German Football Association now ruled that Webster was in breach of contract, and (DFB) and under the aegis of the European ordered him to pay damages to his former club in Professional Football Leagues (EPFL), the League accordance with Article 17 of the FIFA Statutes. Association (Ligaverband) will be working out a joint Immediately following this ruling, some had initially position of the football community. Moreover, FIFA feared that the professional football transfer system has announced that it plans to revise the ambiguous would again have to cope with fundamental changes wording of Article 17 of the FIFA Statutes. It is fur- as it did in the aftermath of the Bosman case. thermore advisable that the clubs include legal sanc- However, when considered rationally, such fears are tions in new player contracts for the event of a breach unfounded since Article 17 of the FIFA Statutes does of contract on the part of the player. In the event of a not stipulate any right of termination for players wish- dispute, clubs do have recourse to the regular nation- ing to transfer to other teams. The CAS explicitly con- al courts in order to enforce claims for injunctive firmed this. The Statute merely lays out the legal con- relief and damages.
Match day 8 Match day 9 29 September 2007 5 October 2007 Karlsruher SC 3:1 BVB BVB 2:1 VfL Bochum
Delron Buckley races with Karlsruhe Celebrating Giovanni Federico's long- player Timo Staffelt for the ball: Rarely range shot to win the match 2:1. has the BVB looked so determined. 48 MANAGEMENT REPORT
GROUP STRUCTURE AND BUSINESS
Group legal structure goool.de Sportswear GmbH) (100.00%), Sports & The Group management report is based on the con- Bytes GmbH (100.00%), BVB Merchandising solidated group of Borussia Dortmund GmbH & GmbH (100.00%), BVB Stadion GmbH (99.74%), Co. KGaA. In addition to its core activities of foot- BVB Beteiligungs-GmbH (94.90%), B.E.S.T. ball and the marketing of SIGNAL IDUNA PARK, Borussia Euro Lloyd Sports Travel GmbH (51.00%) Borussia Dortmund is involved in lines of business and Orthomed GmbH (33.33%). related to football. At present, the Company holds direct and indirect interests in the following Some of these companies have concluded mutual companies: BVB Stadionmanagement GmbH control and/or profit and loss transfer agreements. (100.00%), BVB Stadion Holding GmbH (formerly
Borussia Dortmund GmbH & Co. KGaA
94.90% BVB Stadion GmbH 100% BVB Stadion Holding GmbH 5,10% 94.90% BVB 5.10% BV. Borussia 09 Beteiligungs-GmbH e.V. Dortmund 100% BVB Stadionmanagement GmbH
100% BVB Merchandising GmbH Consolidated tax group
100% Sports & Bytes GmbH
51.00% B.E.S.T. 49.00% Hogg Robinson Germany Borussia Euro Lloyd Sports Travel GmbH GmbH & Co. KG
33.33% 66.67% Orthomed Orthomed GmbH Management
Match day 10 Match day 11. 20 October 2007 28 October 2007 Leverkusen 2:2 BVB BVB 0:0 FC Bayern
Head to head race for the ball between Fight for the ball: Toni and the formida- Diego Klimowicz and Hans Sarpei. ble Tinga (right).
49 BVB Merchandising GmbH with revenues and sporting success being strongly BVB Merchandising GmbH, a wholly-owned sub- correlated. This growth is attributable to the team's sidiary of Borussia Dortmund GmbH & Co. KGaA, participation in the Cup finals and the merchandise was again a key income driver in the past financial that was created specifically for this special occasion year. The company finished the financial year with a and the Cup competition, as well as unique sales profit of € 0.30 million before profit transfer, beat- promotions such as the “Steh drauf” – attending the ing its prior-year result by € 0.44 million. This was local derby “up close and personal” campaign. due to the increase in the company's total revenues by approximately 51.4% to € 7.97 million. The fan shop that opened in January 2007 in the August Lenz building has proven to be another rev- BVB Merchandising GmbH even generated a enue driver, and has meanwhile established itself as a record profit from its core business of selling and key component in the Merchandising sales structure. marketing merchandise, with revenues amounting to € 7.37 million. (previous year: € 4.63 million) Sports & Bytes GmbH In the period from 1 July to 30 June 2008, Sports & This is attributable largely to the proceeds from the Bytes GmbH recorded a profit of € 0.009 million. jersey exchange promotion with EVONIK Industries. In three days, roughly 40,000 jerseys The key mission of the wholly-owned subsidiary were distributed to season ticket holders in an Sports & Bytes comprised IT process implementa- unprecedented promotion. The primary sponsor of tion and video reporting on Bundesliga and DFB Borussia Dortmund GmbH & Co. KGaA, EVONIK Cup matches on BVB TV and live broadcasts on Industries AG, promised every season ticket holder BVB Netradio. a jersey as a token of thanks for their support last season and in anticipation of EVONIK’s upcoming BVB Netradio premiered on Holy Saturday 1999. IPO. The jersey distribution promotion was just as Sophisticated technology and ever larger data great a challenge for EVONIK Industries as it was servers allow it to reach a broader public every year. for the Dortmund-based company, and although The current average number of listeners for neither partner had had any previous experience in Bundesliga matches is between 70,000 and 90,000. implementing such a promotion, both partners were On 26 February 2008, the station reached a record congratulated after the successful execution of the 125,000 users listening in on BVB's 3:1 DFB Cup campaign. quarterfinal victory against TSG 1899 Hoffenheim. This match was not broadcast live on TV. Fans lis- However, notwithstanding the jersey promotion, tened in from around the world: the US, Canada, BVB Merchandising GmbH increased its revenues Japan, China, India, Indonesia, Thailand, Nicaragua, from the sale of merchandise by 21%. Merchandise Sri Lanka and Tanzania, as well as almost every sales in particular reflect the emotions of the fans, country in Europe.
DFB Cup Match day 12 31 October 2007 3 November 2007 BVB 2:1 Frankfurt Hanover 96 2:1 BVB
A head above the rest: Scorer Markus Robert Kovac makes a last minute save Brzenska against Marco Russ. just before Hanover's Szabolcs Huszti shoots. 50 MANAGEMENT REPORT
BVB TV is part of the BVB CLUB and has been a With effect from 30 June 2008, the liabilities to the fixed component of the BVB homepage since KGaA were transferred to the capital reserves of November 2003. A video recap of every Borussia BVB Stadion Holding GmbH. match can be accessed here shortly after the end of play. But the BVB CLUB offers even more: Fans BVB Stadion Holding concluded the financial year have access to their own BVB e-mail address, exclu- with a loss of € 4.25 million prior to loss absorption sive news, downloads and a wide range of communi- by the KGaA. The results were impacted for the last cations tools, from chat to star chat and through the time by the negative financial result of € 3.75 mil- forum. lion to finance the stadium shares.
Sports & Bytes GmbH is currently developing an elec- BVB Stadion GmbH tronic player passport on behalf of Borussia Dortmund BVB Stadion GmbH, which is the legal successor GmbH & Co. KGaA's sports management. company to Westfalenstadion Dortmund GmbH & Co. KG, owns the stadium property. BVB Stadion Holding GmbH The BVB Group holds a 99.74% interest in BVB (formerly goool.de Sportswear GmbH) Stadion GmbH through BVB Stadion Holding Pursuant to the resolution of the Shareholders' GmbH and BVB Beteiligungs – GmbH; BV. Meeting on 10 June 2008 and the entry into the Borussia 09 e.V. Dortmund holds a 0.26% interest. commercial register on 13 June 2008, the wholly owned subsidiary goool.de Sportswear GmbH will The company entered into a lease agreement with henceforth operate under the name BVB Stadion Borussia Dortmund GmbH & Co. KGaA for the use Holding GmbH. of the stadium property with a fixed term until 30 At the same time, the purpose of the company was June 2027. changed: Going forward, the object of BVB Stadion Holding GmbH will be to make equity investments Additionally, a profit and loss transfer agreement in other companies. was entered into with BVB Stadion Holding GmbH.
The company's original business of manufacturing BVB Stadion GmbH's net loss before loss absorp- and selling sports and leisure attire was suspended tion by BVB Stadion Holding GmbH for the finan- and the remaining merchandise held in inventory cial year in accordance with IFRS amounted to was sold to BVB Merchandising GmbH. € 3.39 million (previous year: € 3.48 million loss).
In the current financial year, the loan granted by BVB Beteiligungs-GmbH Morgan Stanley was repaid in full by Borussia BVB Beteiligungs-GmbH was founded and entered Dortmund GmbH & Co. KGaA. The Company is into the commercial register on 2 May 2006. The com- hence free from financial liabilities. pany holds a 5.1% interest in BVB Stadion GmbH.
Match day 13 Match day 14 10 November 2007 25 November 2007 BVB 1:1 Frankfurt Nuremberg 2:0 BVB
Close your eyes and go for it: Florian Brzenska (left) knows what's coming: Kringe, here battling Patrick Ochs, scores Galasek shoots past Petric and Kovac to a point against Eintracht. bring the score to 1:0. 51 In the current financial year, Borussia Dortmund B.E.S.T. Borussia Euro Lloyd Sports GmbH & Co. KGaA repaid in full the loan granted Travel GmbH by Morgan Stanley to finance the stadium shares, Borussia Dortmund GmbH & Co. KGaA has a 51% meaning that the interest expense from this loan interest in Borussia Euro Lloyd Sports Travel impacted net profit and loss for the year for the last GmbH. time in 2007/2008. In addition to general travel agency services, B.E.S.T. Against the backdrop of the financing of the shares, offers the conception, planning and implementation BVB Beteiligungs-GmbH closed the financial year of events, conferences and congresses. BVB provides with a loss of € 0.37 million before loss absorption by B.E.S.T. above all with the contacts and business rela- BVB Stadion Holding (previous year: € 0.32 million tions it has with numerous enterprises. loss). B.E.S.T. Borussia Euro Lloyd Sports Travel GmbH BVB Stadionmanagement GmbH closed the financial year with a profit of € 0.17 mil- The object of BVB Stadionmanagement GmbH is lion (previous year: € 0.12 million). the provision of personnel and other services for the management and administration of the operating Orthomed GmbH facilities of Borussia Dortmund GmbH & Co. Borussia Dortmund has a 33.33% interest in Ortho- KGaA, in particular SIGNAL IDUNA PARK. med Medizinisches Leistungs- und Rehabilitations- zentrum GmbH. Orthomed offers an all round con- The company entered into a profit and loss transfer cept for medical rehabilitation, particularly for agreement with the KGaA in October 2006. competitive athletes. The service package offered is divided into prophylactic measures and training- In the last financial year, net income for the year was related measures. It goes without saying that all of € 0.06 million (previous year: € 0.12 million). Borussia Dortmund's sporting departments are also attended to by Orthomed.
Orthomed recorded a profit for the year of € 0.15 million as at 31 December 2007 (previous year: € 0.06 million).
Match day 15 Match day 16 1 December 2007 7 December 2007 VfB Stuttgart 1:2 BVB BVB 6:1 Arm. Bielefeld
Sebastian Kehl doesn't let Pavel Pardo A shooting match against Bielefeld: throw him off track: He led the BVB to Florian Kringe can also add his name to victory against VfB. the list of scorers in this game. 52 MANAGEMENT REPORT
ORGANISATION OF MANAGEMENT AND CONTROL
The general partner, Borussia Dortmund Geschäfts- holder is Ballspielverein Borussia 09 e.V. Dortmund. führungs-GmbH, is responsible for management and The following chart shows the structures and representation of Borussia Dortmund GmbH & Co. responsibilities as between Ballspielverein Borussia KGaA. This limited liability company (“GmbH”) is 09 e.V. Dortmund, Borussia Dortmund GmbH & in turn represented by its Managing Directors Hans- Co. KGaA and Borussia Dortmund Geschäfts- Joachim Watzke and Thomas Treß; its sole share- führungs-GmbH.
Ballspielverein Borussia 09 e.V. Dortmund
Executive Council of Board economic affairs Borussia Dortmund elects appoints Geschäftsführungs-GmbH Members Meeting (General Partner) appoints and supervises
Advisory Board Managing Directors Borussia Dortmund GmbH & Co. KGaA (Consisting of members of the Executive Board, Council of economic affairs and non-voting, associated members) Supervisory Board No rightright ooff appointment, ononlyly rigrightht ooff supervisiosupervisionn elects
General Shareholders’ Meeting
Match day 17 DFB Cup (second round) 15 December 2007 29 January 2008 VfL Wolfsburg 4:0 BVB BVB 2:1 Werder Bremen
This is the only scene in the last game BVB faces Werder Bremen in the second before the winter break in which round: Tinga and Co. prevail 2:1. Borussia was on top (Valdez/Simunek). 53 The rights and duties of the KGaA's Supervisory The members of the Supervisory Board are as follows:
Board, which is appointed by the General Gerd Pieper (Chairman) Shareholders' Meeting, are limited. Specifically, it Proprietor and Managing Director of has no authority with respect to matters involving Stadtparfümerie Pieper GmbH, Herne personnel, i.e., no authority to appoint and dismiss Harald Heinze (Deputy Chairman) managing directors at Borussia Dortmund Ge- schäftsführungs-GmbH or to stipulate the terms of Ruedi Baer their contracts. Nor is the Supervisory Board autho- Consultant, B + B Beratungs AG, Watt rised to adopt internal rules of procedure for the (Switzer land) general partner or issue any list of transactions requiring its consent. Rather, such rights and duties Othmar Freiherr von Diemar Proprietor and manager of Othmar von Diemar are vested in the governing bodies of Borussia Vermögensverwaltung + Beratung, Cologne Dortmund Geschäftsführungs-GmbH, namely its
Advisory Board and the Executive Committee cre- Bernd Geske ated by the Advisory Board. Managing partner of Bernd Geske Lean Communication, Meerbusch
Christian Kullmann Head of the management board office and group communications of EVONIK Industries AG, Essen
Match day 18 Match day 19 2 February 2008 10 February 2008 MSV Duisburg 3:3 BVB BVB 2:3 Schalke 04
Diego Klimowicz' two goals late in the Dede sees red in the derby: Jermaine game secured BVB a point in the Jones from Schalke tries to calm the match against MSV Duisburg. Borussian. 54 MANAGEMENT REPORT
Within Borussia Dortmund GmbH & Co. KGaA, The responsible employees and the divisions for there are four independent areas of responsibility which they are responsible can be seen from the fol- below the management level, namely, “Commu- lowing chart. nications”, “Sport”, “Finance” and “Organisation”.
BORUSSIA DORTMUND GmbH & Co. KGaA
Management Management
Hans-Joachim Watzke Thomas Treß [Chairman]
Communications Sport Finance Organisation J. Schneck M. Zorc M. Knipping Dr. C. Hockenjos
Corporate Finances and General Professional football communications accounting organisation
Sport communications Amateurs Controlling Stadium management
Publications Youth Investor Relations Match organisation
IT (Information Fan support Training fields V.I.P. – Hospitality Technology)
Stadium announcements Personnel Sportfive and program (sponsors)
PR work Risk Management Events
Complaints Merchandising DFB/DFL management
Affiliates Ticketing
Sportfive (Commission Real estate processing)
Third party events
Match day 20 Match day 21 16 February 2008 23 February 2008 Energie Cottbus 0:2 BVB BVB 1:0 Hansa Rostock
Double-scorer Mladen Petric removes all Delron Buckley, shown here in an aerial doubt with this shot – goalie Tremmel can't duel with Kai Bülow, was the strongest quite reach. player in the field. 55 INTERNAL MANAGEMENT SYSTEM
Sports management mise cash flow by concentrating on the impacting Despite the successful restructuring and the eco- factors of “operating results” and “investments”. nomically stable results, in the future the focus will be on playing football successfully with a cost-opti- The operating result is the most important indica- mised budget. In order to achieve this aim, BVB will tor for measuring success. For us, the operating continue to have a competitive team going forward result means earnings before interest and taxes which is made up of young, promising players. (EBIT). Therefore we are constantly monitoring the operating results in all lines of business and areas of The sporting objectives will be aligned with the responsibility based on monthly comparisons financial circumstances, meaning that the makeup between the budget and the actual situation. The of the squad and its cost structure will continue to most important drivers for the operating result are depend on foreseeable variables on the income further improvement in sales revenues in the major side. Qualifying for and successfully playing in income areas of ticketing, sponsorship, TV market- international competitions would provide the finan- ing and merchandising, and disciplined manage- cial flexibility for acquiring additional reinforce- ment of operating expenses. ments. The medium-term goal must therefore be for the team to establish itself at the European lev- In coming years we will concentrate on successively el of competition. generating sales growth while limiting operating expenditure. In this respect, the decisive factor is Financial management qualifying for international competitions. One of the main aims of BVB's management is to increase profitability in the long-term and thus to Capital management further improve the Borussia Dortmund Group's The management's capital management responsi- equity resources. In addition, there is a focus on bilities include stabilising and increasing the con- financial strength. As well as a constant improve- solidated equity as determined in accordance with ment in the operating result, generating positive IFRS We will reach these targets, in particular, by cash flow is therefore the most important financial improving the operating result and through effec- objective of our Company. We are seeking to opti- tive investments.
DFB Cup QF Match day 22 26 February 2008 1 March 2008 BVB 3:1 Hoffenheim Werder Bremen 2:0 BVB
Giovanni Federico and Co. didn't treat Duel between Sebastian Kehl and their opponents (Gustavo) lightly in the Markus Rosenberg, a striker from quarter finals. Werder Bremen. 56 MANAGEMENT REPORT
CORPORATE STRATEGY
Borussia Dortmund's continues to pursue the aim of • Germany continues to be Europe's largest football establishing itself over the medium-term as one of the market, which, however, is behind some other leading German football clubs after FC Bayern European markets in financial terms. This provides Munich. Following the successful implementation of great growth potential. the reorganisation, the restructuring of our financial liabilities and investments in the professional squad, All financial activities at Borussia Dortmund are ori- we consider ourselves to be on the right path. ented around the target groups that are relevant for a football club: Its fans, members and business partners. The financial foundations of the first and to date only Products and services should be tailored to these listed German football company have been expanded groups in the best way possible. Through its existing with the exclusive marketing right for SIGNAL brand potential, Borussia Dortmund wants to utilise IDUNA PARK, more effective use of the “Borussia all commercial opportunities presented by profes- Dortmund” brand and the establishment of football- sional club football in an international context. related lines of business. However, the core business will in future also be professional football together The current business strategy can principally be sum- with its classic income sources of TV marketing, spon- marised as follows: sorship, ticketing and merchandising. For the follow- ing reasons, BVB is convinced that it will be able to • Sustainable adjustment of sporting perspectives further stabilise and expand its position: • Intensifying the promotion of up and coming talent • Fan involvement • Borussia Dortmund is in sporting terms one of the • Utilisation of the “Borussia Dortmund” brand most successful, well known and most popular German football clubs with an outstanding fan base However, financial and business development is that provides BVB with one of the highest average largely dependent on sporting success. Since sport- numbers of spectators in Europe. ing success can only be planned to a very limited • A football company can only be financially success- degree, the best management can do is to create a ful if it enjoys sporting success in the long term. In foundation for success. Investments, particularly in order to make its financial performance less the professional squad, are therefore a necessary dependent on short-term sporting success in the prerequisite for achieving sporting objectives, such future, Borussia Dortmund will push ahead further as qualifying for the UEFA Cup. However, in order with national and international marketing of its to meet financial goals, planned investments and brand name. decisions must under certain circumstances be post-
Match day 23 Match day 24 7 March 2008 15 March 2008 BVB 1:1 Hertha BSC Hamburger SV 1:0 BVB
The match against Hertha was hard- Hamburg's scorer Paolo Guerrero takes fought: Wörns attacks Berlin's scorer off the kid gloves with Borussia's Martin Pantelic. Amedick. 57 poned to the extent these would only be possible by The first steps in bringing us closer to this goal have incurring new debt. Moreover, a player may be sold been taken with the marketing of the stadium name – based on financial considerations in cases where this the agreement with the SIGNAL IDUNA Group was would not have happened had the decision been extended early by five years to at least 2016 –, the new made based solely on sporting criteria. principal sponsor agreement with EVONIK Industries AG – extended until 2011 – and conclusion A conflict, or a situation where sporting considera- of the new television agreement by DFL. Moreover, tions and financial considerations affect each other further significant revenue potential is available, espe- adversely, therefore arises between the pursuit of cially by successfully qualifying for international com- financial interests and sporting interests, particular- petitions, which would have a positive effect on all ly if the club continually falls short of its sporting Borussia Dortmund's revenue sources. goals. In such cases, management weighs up the Positive operating results and investments, main- opportunities and risks to find a solution that is ly in the professional squad, depending on those broadly in line with our strategic objectives from a results, are expected to enable stable, positive cash medium-term point of view. flows to be achieved over the long term.
DFB Cup SF Match day 25 18 March 2008 22 March 2008 BVB 3:0 Carl Zeiss Jena BVB 1:1 Karlsruher SC
Tinga scores in the 13th minute for an Borussia – as here with Rukavina against early 1:0 lead for BVB. Iashvili – were clearly the better team, but managed to score only one goal. 58 MANAGEMENT REPORT
POSITION OF THE GROUP
RESULTS OF OPERATIONS
Although the Borussia Dortmund Group generated Gross revenue amounted to € 116.28 (previous year: revenues of € 107.56 million, thus topping the pre- € 105.98 million). The result from operating activi- vious year's figure by € 10.44 million and breaking ties (EBIT) was again positive, at € 5.40 million (pre- through the € 100 million ceiling for the first time, vious year: € 15.60 million). the Group closed the 2007/2008 financial year with a € 3.94 million loss in accordance with IFRS (pre- vious year: € 10.12 million).
Borussia Dortmund Group – Revenues in %
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Match day 26 Match day 27 29 March 2008 6 April 2008 VfL Bochum 3:3 BVB BVB 1:2 Leverkusen
Nelson Valdez (here tackling Imhof) earns These two beat Leverkusen almost single- his “miles” in the match against Bochum handedly: Dede and Alex Frei, who alter- as well. nately set up goals for each other. 59 SALES DEVELOPMENT
In spite of its sporting performance in the Bun - increased revenues in ticketing (23.7%), sponsorship desliga, the Borussia Dortmund Group again (10.9%) and TV marketing (22.5%). increased its revenues by 10.8%. This growth is pri- marily attributable to the success in the DFB Cup The revenues for the individual segments are bro- competition, which contributed considerably to ken down as follows:
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Match day 28 Match day 29 13 April 2008 16 April 2008 FC Bayern 5:0 BVB BVB 1:3 Hanover 96
Disappointed Borussians (Dede, Wörns, Höttecke celebrates his Bundesliga debut Tinga) and jubilant Munich players in the match versus Hanover but was (Podolski, Sagnol). powerless to stop this shot by Huszti. 60 MANAGEMENT REPORT
Details of the performance of the individual revenue cessfully qualified for the DFB Cup finals this season sources are provided in the following paragraphs. for the first time in nineteen years. Of the six rounds, four were played at the home stadium, SIGNAL Income from ticketing IDUNA PARK. Due to the high stadium capacity, With income from the sale of tickets for Bundesliga this meant that it was possible to host a larger num- matches, the DFB Cup and from other football ber of spectators than at away matches. It should be matches, Borussia Dortmund generated € 22.59 mil- noted that in the national cup, ticket income does not lion in revenues, representing a € 4.33 million flow solely to the home team. Rather, a share of tick- increase over the previous year. et sales also goes to the guest team.
Income from the sale of admissions tickets to Match operations generated an additional € 1.78 Bundesliga matches amounted to € 16.72 million million from friendly matches and from regional last year, a € 0.22 million decline. In spite of the dis- match operations. appointing sporting performance in Bundesliga matches, leading the team to rank 13th nationally, Income from sponsorship Borussia Dortmund can boast that it leads the chart Borussia Dortmund's sponsoring income amounted in ticket sales as compared to the other Bundesliga to € 33.89 million, beating the prior-year figure by a clubs. Already at the beginning of the season, further € 3.34 million. Borussia Dortmund set the overall Bundesliga record for the amount of season tickets sold: 50,549. In addition to EVONIK Industries AG, the team’s On average, 71,650 spectators (including those hold- committed primary sponsor who not only grabbed ing free and complimentary tickets) attended attention with the first ever jersey campaign in the Borussia Dortmund's home matches. However, history of the Bundesliga, but also extended its com- Borussia Dortmund was less fortunate with regard mitment early until 2011, Borussia Dortmund can to the Bundesliga match schedule, as each of the continue to count on established partners such as three midweek match days scheduled was set as a Nike, SIGNAL IDUNA, Warsteiner and Sparda BVB home match. The matches against Hamburger Bank this season. In order to strengthen these part- SV, Hannover 96 and VfB Stuttgart confirmed again nerships and to underpin the trust and the con- that midweek matches draw smaller crowds, thus structive co-operation between Borussia Dortmund generating weaker income. and its partners, the agreement with the SIGNAL IDUNA Group was also extended early by an addi- Above all, DFB Cup ticket sales contributed to the tional five years. Germany's largest football stadium positive earnings. With sales amounting to € 4.08 mil- will therefore be called SIGNAL IDUNA PARK at lion, this represented an increase by € 3.88 million. least until 2016. Sparda Bank also expressed its con- Whereas Borussia Dortmund was already disqualified fidence in us in February by extending its Champion in the second main round in the previous year, it suc- Partner agreement by three years.
DFB Cup finals Match day 30 19 April 2008 25 April 2008 BVB 1:2 FC Bayern in overtime Frankfurt 1:1 BVB
The equaliser in the 92nd minute: Kahn Kuba scores his first goal for BVB at the looks on dumbfounded as Lahm won't 1:1 tie in Frankfurt – and makes a great be able to stop it. play. 61 In addition, the hospitality suites around the west- For Bundesliga match operations, this amount was ern, northern and eastern stands made a substantial € 20.76 million, the same level as the previous year contribution to the positive results. In addition to despite our final 13th-place ranking. This was attribu- the suites at the regulars’ level (Stammtischebene) table to the fact that the budget for the distribution and the “Rote Erde Club”, which had already been by DFL Deutsche Fußball Liga GmbH of income at full capacity in previous years, the Business 09 from marketing across all media in Germany for the Club was also completely sold out for all of this year. 2007/2008 season was € 15.00 million higher. Incentives packages are also gaining in popularity. The increase in TV revenues is therefore mainly In recent years, these packages have been used due to the team's success in the national cup cham- more and more frequently by companies who would pionships. A total of € 4.91 million was generated in like to play host to their guests on individual match the six rounds played, including the Cup final in days at SIGNAL IDUNA PARK independently of Berlin. The German Football Association determines season packages. An increasing number of compa- the distribution of the income from the marketing of nies who support the guest teams are also taking media rights for each round prior to the competition. advantage of the opportunity to share the SIGNAL The only distinction drawn for this purpose is IDUNA PARK experience with business associates. whether the matches are broadcast live or as a In order to satisfy all the requests in this segment roundup. and in accordance with past practice, the golf area At € 0.36 million, TV marketing for the regional located at the south of SIGNAL IDUNA PARK and league team fell just € 0.05 million short of the pre- the Conference Center added in early 2007 were vious year's level. converted into hospitality suites on match days dur- ing the current financial year. Transfer income In the past financial year, transfer income declined In addition, our DFB Cup success and the resulting by € 1.37 million to € 5.40 million. qualification for the UEFA Cup in the following sea- son helped lift revenues from advertising income. The core components of this revenue category were the transfers of Ebi Smolarek to Real Racing Club Income from TV marketing de Santander and Steven Pienaar to FC Everton. In Income from TV marketing in the past financial year summer 2007, FC Everton borrowed Pienaar from amounted to € 26.02 million, or € 4.77 million more BVB, initially for a one-year term. In March 2008, than the previous year. the club exercised an option to buy Pienaar, who received a contract until 2011.
Match day 31 Match day 32 2 May 2008 6 May 2008 BVB 0:0 Nuremberg BVB 3:2 Stuttgart
Though Mladen Petric managed to Alexander Frei (shown here battling break free of Andreas Wolf in this pic- Matthieu Delpierre) scores the 2nd and ture, he ran out of luck in the end. 3rd goals against VfB Stuttgart. 62 MANAGEMENT REPORT
Income from retail, catering and As in previous years, catering in SIGNAL IDUNA licences including other income PARK’s circulation levels and hospitality suites, as In the past financial year, Borussia Dortmund gen- well as for non-match events, made a significant con- erated € 19.65 million in revenues from retail, cater- tribution to sales. € 7.44 million was generated here, ing and licences including other income. This representing an increase by € 0.77 million resulting amount was € 0.63 million lower than the prior-year primarily from the three additional home matches. figure. It should be noted that average consumption per customer at Bundesliga matches rose year on year by The revenues are broken down individually into the € 0.28 net; excluding the three midweek matches, following lines of business: this amount rose by € 0.37 net.
Revenues from merchandising amounted to € 8.09 Retail, catering and licences including other income million, up € 2.10 million on the previous year. In also includes proceeds from rentals and leases, the addition to BVB Stadion Holding GmbH (formerly rights of use for all companies and advance booking goool.de Sportswear GmbH), which generated rev- fees from ticketing, totalling € 4.13 million (previous enues from operating activities of € 0.72 million as year: € 7.64 million). The rental and lease proceeds at 31 May 2008, BVB Merchandising GmbH gener- generated last financial year as a result of the 2006 ated record revenues in the amount of € 7.37 million. FIFA World Cup that were recognised under this The wholly owned subsidiary lifted merchandise item on a one-off basis explain the € 3.51 million sales by approximately 59%. decline in this area.
This is attributable largely to the proceeds from the Other operating income fell by € 0.23 million to jersey exchange promotion with EVONIK In- € 8.63 million in the past financial year. Again, this dustries, which accounted for approximately 23% of decline is primarily attributable to the earnings overall volume. Notwithstanding the jersey promo- recognised in the prior year period in relation to the tion, the revenues generated exceeded the previous 2006 FIFA World Cup. Next to the remuneration year's level by 21%. In addition to the team's suc- received for the first time for clubs that sent inter- cessful performance in the DFB Cup competition national players to the 2008 European Cup, this item and the related demand for items created specifical- primarily comprises the sale of the swap transaction ly for this event, other special sales and promotions, with Deutsche Bank AG as part of the retirement of such as the “Steh drauf” campaign contributed to the the credit facility with Morgan Stanley International positive results. Bank Limited, London.
Match day 33 Match day 34 10 May 2008 17 May 2008 Bielefeld 2:2 BVB BVB 2:4 Wolfsburg
Retreat: Kuba, Wörns and Kovac give On the last day of play, the Wolves chase after Bielefeld's Zuma. showed they were not all bark. Sascha Riether cleanly cuts the Brazilian Tinga off from the ball. 63 DEVELOPMENT OF SIGNIFICANT Depreciation and amortisation OPERATING EXPENSES Depreciation and amortisation increased year on year by € 1.95 million to € 15.50 million, primarily Cost of materials due to reinforcements made to the professional The cost of materials increased by € 1.49 million to squad. € 4.71 million. This was primarily attributable to the increase in merchandising revenue, which included Other operating expenses the jersey exchange promotion with EVONIK. Other operating expenses amounted to € 45.31 mil- lion in the 2007/2008 financial year compared with Personnel expenses € 36.64 million in the previous year. Personnel expenses rose year on year to € 45.36 mil- lion (previous year: € 36.98 million). This increase This increase was primarily the result of the three was primarily attributable to the budget of the additional home matches, the resulting increased Bundesliga squad, which had already been increased expense for match operations and the increase in at the beginning of the season, the premiums paid marketing commissions and association dues in con- out upon qualifying for the DFB Cup finals and the nection with the successful outcome of the DFB early qualification for the UEFA Cup Championship Cup. for the 2008/2009 season.
FINANCIAL CONDITION
Analysis of capital structure Stanley amounting to € 79.2 million and the new After taking into account the net loss for the year, loan taken out in this context. the Borussia Dortmund Group's equity amounted to € 80.80 million as at 30 June 2008. This corre- Liabilities amounted to € 175.80 million as at the sponds to an equity ratio of 31.49%. balance sheet date and were thus € 4.18 million higher than the previous year's level. This increase In the past financial year, Borussia Dortmund's debt was the result of greater payment obligations for structure was impacted by the signing of a new mar- professional players and the increase in value added keting agreement with Sportfive, the Group-wide tax in connection with the new marketing agree- retirement in full of the line of credit with Morgan ment.
DFB Cup Match day 1 09 August 2008 16 August 2008 RW Essen 1:3 BVB Leverkusen 2:3 BVB
Match-winner Nelson Valdez and scorer Kringe, Hummels, Kehl and Subotic cele- Florian Kringe celebrate the goal for a brate Subotic's first goal in the 2:1 victory over Rot-Weiss Essen. Bundesliga. 64 MANAGEMENT REPORT
Analysis of investments funds from the new marketing agreement with Payments for investments in player assets amounted Sportfive. The funds were used in full to repay the to € 3.06 million and investments in tangible assets Morgan Stanley loan. Further information can be amounted to € 1.69 million. found in the notes to the cash flow statement.
Analysis of liquidity The repayment of the net credit obligation in the As at 30 June 2008, the Borussia Dortmund Group amount of approximately € 59.2 million resulted in held cash of € 7.91 million, none of which was sub- the release of formerly pledged collateral. This will ject to restrictions. Furthermore, € 2.50 million in increase future financial flexibility to make moder- overdraft facilities is available in full. ate investments.
In 2007/2008, the completion of a non-recourse sale of receivables made it possible to generate advance
NET ASSETS
Net assets fell year on year by € 1.56 million to amortisation. In contrast, current assets rose by € 4.14 € 256.59 million as at the balance sheet date. million as against receivables, which rose year on The reduction in non-current assets by a total of year. Cash and cash equivalents fell by € 5.99 million. € 5.70 million is due primarily to depreciation and
OVERALL SUMMARY OF RESULTS OF OPERATIONS, FINANCIAL CONDITION AND NET ASSETS
The Borussia Dortmund Group again generated an tion with the restructuring of the liabilities side, the operating profit without having played in any lucra- room for manoeuvre in strengthening the profes- tive international competitions and can continue to sional squad for the future has increased. boast a solid equity ratio. Given this, and in connec-
Match day 2 Match day 3 23 August 2008 30 August 2008 BVB 1:1 FC Bayern Cottbus 0:1 BVB
“Gimme a hug”: Goal provider Nelson This is how Borussia celebrates its 1:0 Valdez pursues Kuba, the scorer. Right: victory in the “stadium of friendship”. Munich's Christian Lell. 65 THE DFB CUP – MERCHANDISING LEAVES ITS (TRADE)MARK
66 THE DFB CUP
19 April 2008: In the photographers' sights: The BVB squad before kick-off. 67 THE DFB CUP – MERCHANDISING LEAVES ITS (TRADE)MARK
Up to twelve million television viewers watched the 62nd DFB Cup final.
To mark the day, the team's equipment turing the club's colours in exactly equal pro- provider, Nike, created a limited-edition jer- portions. It goes without saying that this jer- sey. Borussia Dortmund came to the DFB Cup sey was a hot seller among fans, especially final match on 19 April 2008 in uniforms fea- due to the fact that it was a limited edition.
Borussia Dortmund's merchandising depart- ment also designed a T-shirt that was soon sold out. The bright yellow T-shirt was an eye catcher, featuring the slogan “We're going to Berlin” and the date of the final match, with the BVB logo flanked by two Berlin bears. In addition, special game day scarves and pen- nants featuring the logos of the two clubs
The run on admission tickets was co-ordinated by a large team of BVB employees. Tickets were allocated according to a distribution key agreed with the fan clubs.
68 THE DFB CUP
Johannes B. Kerner welcomed TV viewers. His prediction that they were in for an exciting match was no understatement.
Strong together: Brazilians Tinga and Dede (left picture) wearing the exclusive final-jersey. Midfielders Sebastian Kehl and Florian Kringe (below right) wearing the Berlin T-shirt.
were created for the final match against Bayern Munich, as well as for the preceding semi-final match against FC Carl Zeiss Jena and the quarter-final against TSG 1899 Hoffenheim.
But additional sales generated by Borussia's fan shops were not limited to textiles. The CD “50,000 Borussians on the Spree”, which was recorded specially to commemorate the team's taking part in the final, was a smash hit – and made the cash tills sing.
69 COMPENSATION REPORT
The structure of the compensation system for man- taxes. In addition, special payments can be made on agement is determined and regularly reviewed by the basis of resolutions approved by the Executive the Executive Committee of the Advisory Board. Committee of the Advisory Board. The Executive Committee is also responsible for determining the compensation of management in The component not related to performance com- detail and sets the appropriate amount of compen- prises a fixed annual salary and benefits in kind, sation. The principal criteria for determining the mainly derived from the amounts required to be tak- appropriate amount of compensation are the en into account in accordance with tax regulations responsibilities of the particular member of man- e.g. for the use of company cars. agement, their personal performance and the finan- cial condition, success and future prospects of The Supervisory Board's compensation is governed Borussia Dortmund. by § 13 of the Articles of Association, pursuant to which each member of the Supervisory Board As well as annual payments not related to perform- receives fixed compensation amounting to € 7,000; ance and based on market rates at comparable com- the Chairman receives twice that amount, while the panies, the compensation includes a performance- Deputy Chairman receives one and a half times that related component that is based on the consolidated amount. Value added tax is reimbursed to the mem- earnings of Borussia Dortmund GmbH & Co. bers of the Supervisory Board. KGaA before the fixed annual salary and income
70 MANAGEMENT REPORT
RISK REPORT
In the course of its business activities, the Borussia identification, assessment and management of these Dortmund Group is constantly exposed to risks dangers define the areas of responsibility of a com- which may negatively impact its operations. The pany's risk management system.
RISK MANAGEMENT
With its diverse lines of business, Borussia Dort- In order to ensure the highest possible level of trans- mund takes business decisions that allow it to seize parency, risk management has been incorporated the opportunities offered to the Group. However, into the organisational structure of the entire Group. there are risks inherent in many opportunities. While Every department and division is required to report most of these risks are of no significance to the to the management on any market-relevant changes Company, some may jeopardise its existence. Given to the risk portfolio. the fact that certain risks must be taken in order to sufficiently leverage opportunities, it is vital to have In order to ensure that the existing risks that have a functioning control and monitoring system. already been captured are kept up to date and to record identifiable risks, the proven risk inventory It is the responsibility of the Group's internal risk process of previous years is being kept. At regular management system to recognise, assess, monitor intervals, every individual risk is highlighted, dis- and control these risks, as well as the associated cussed and reviewed in terms of current circum- opportunities. stances, both in individual meetings and in plenary meetings. Depending on the classification of the Borussia Dortmund's risk management system is risks by amount of loss they may cause and their like- based on principles and guidelines laid out by the lihood of occurring, the necessary measures are management which are designed to enable uncer- derived or adapted. Furthermore, a functioning risk tainties to be identified and countermeasures to be management system is in a position to identify weak- taken in good time. nesses in the Company's internal processes, thus
71 offering the opportunity to counter these weakness- The governing bodies of Borussia Dortmund es through early recognition. received regular reports on the risk inventories per- The observance of targets is monitored using a formed in the past year, and the results thereof, and system of regular reporting. Particular emphasis is were thus kept informed of the Company's current placed here on high priority risks which could sig- risk situation. The efficiency and effectiveness of the nificantly jeopardise the continuing existence of risk management system is examined as part of the Borussia Dortmund. audit carried out by the Company's auditors.
SPECIFIC RISKS
STRATEGIC RISKS PERSONNEL RISKS
A key management responsibility in a football com- The commitment and performance of employees pany is to appropriately balance sporting and financial are essential pillars of successful company develop- targets in terms of risk, to ensure that financial and ment. Quality and employee motivation will play a corporate planning are performed independently of decisive role in future sporting and financial success. athletic success, and to maintain the company's prof- itability, bringing it in line with sporting objectives. The professional squad and the quality thereof form the bedrock enabling Borussia Dortmund to suc- Long-term affiliations and partnerships ensure a ceed as a company in its core business. Bad invest- certain level of planning security, independently of ments in relation to hiring new players can have far- sporting success. The pursuit of athletically driven reaching effects on sporting, and thus, financial aims and the necessary measures to achieve those objectives. Additionally, a lack of identification with aims may potentially conflict with the financial the Company, insufficient willingness to be part of objectives, such as ensuring adequate liquidity. The the team, and a lack of commitment negatively achievement of one company objective may there- impact performance – particularly in terms of sport fore make it necessary to abandon or modify anoth- – and hence earnings. To some extent, it may how- er objective. In such cases, management will weigh ever also not be possible to make up for the loss of up the risks and opportunities and attempt to find a key players as a result of injury and, as a result, the solution that is broadly in line with the strategic ability to meet internally defined objectives may be objectives from a medium-term point of view, while endangered. remaining within the range of defined company per- formance indicators in order not to jeopardise the Yet in the economic sector as well, the use of quali- financial objectives. fied specialists and executives is essential for BVB.
72 MANAGEMENT REPORT
Taking the right strategic decisions and thus laying collaboration with Sportfive GmbH & Co. KG, the groundwork early on for a secured future inde- which is a leader in marketing sporting rights pendent of sporting success is the basis for the throughout Europe and has access to an interna- Company's success. The ability to act with foresight tional network – reduces the risk that it will not be is a testament to the quality of the employees used. possible to win over new sponsors, keep existing Borussia Dortmund's organisational structure, with ones and maintain sponsor relationships. clear structures and areas of responsibilities was designed to ensure the separation of the specialist SALES RISKS departments. This enables business decisions to be analysed and prepared in individual departments The success of the individual lines of business with the relevant expertise before a decision is made depends on demand, which in turn depends heavily for the Company as a whole. The constant exchange on sporting success or is based on sympathy with between the corporate divisions is essential to opti- those involved. In order to reduce the risk of a lack mising the quality of the decisions made and avoid- of demand, Borussia Dortmund extended agree- ing conflicts of objectives. ments early with key partners, thus following the strategy of securing long-term relationships with COMPETITIVE RISKS business partners in order to create together a foun- dation for the future and to ensure a basis for plan- Especially in recent years, the playing field for foot- ning security. ball clubs has been levelled out, in both sporting and economic terms. The economic discrepancy in size However, the Company can do little to counteract that exists in other European leagues can be more or the reduction in demand caused by statutory provi- less ruled out, e.g. by centralised TV marketing, sions (ban on advertising certain products, smoking since every club is guaranteed a minimum amount. ban, ban on alcohol at sporting events). It can mere- The table rankings in recent years have also shown ly consider possible solutions to the problem in that the presumed smaller clubs are certainly able advance in order to prepare appropriate measures. to hold their own in competition. The increasing Additionally, the Federal Cartel Office's rejection of balance within the league means that potential cus- the German Football Association's marketing mod- tomers will increasingly be spread thinner over a el for broadcasting Bundesliga matches beginning larger group, with competition for sponsors growing in 2009/2010 will also have an effect on the amount fiercer. To complicate matters further for some of future revenues. Borussia Dortmund will not be clubs, sponsors are assessed differently according to in a position to influence this circumstance. region. This could mean that a partnership is for- bidden for one club but permitted for its competi- The League Association and the umbrella associa- tors. Extending co-operations with professional tion DFL are also aware of these risks. It will be partners – such as the extension until 2020 of the important in the coming years to systematically
73 implement the prepared strategies. In that regard, called liquidity risk. This risk is continuously moni- the political arena is gaining importance. Central tored and mitigated as part of the Company's liquid- issues of media marketing, transfer conditions and ity policy and planning under consideration of expect- match operation itself are subject to increasing ed cash flows. political influence. The internationalisation of the media, advertising, labour and capital markets does not stop at borders. Each of these factors will affect RISKS JEOPARDISING PERFORMANCE the future of professional football. AND CONTINUED EXISTENCE
In order to participate in Bundesliga matches, every FINANCIAL RISKS club – and hence Borussia Dortmund as well – requires a licence from Deutsche Fußball Liga for at Interest rate risk least one season. Financial performance is linked to After the repayment of the line of credit with e.g. the presumption of positive equity and proof of Morgan Stanley International Bank Limited and due sufficient liquidity to ensure match operations for the to the fixed-interest credit agreements entered into duration of the season in question. If the licence for the coming years, the Group is not subject to any were to be revoked or denied because of failure to interest rate risk. comply with conditions or evidence of inability to meet financial criteria, this would result in automat- Credit risk ic relegation. The Group companies conduct business exclusively with third parties of high credit standing. Credit risk But relegation to the Second Bundesliga can also can arise in the context of a player transfer and from result from lack of sporting success. The effects of long-term sponsorship agreements, as well as from relegation on earnings and liquidity could materially centralised marketing agreements. and lastingly adversely affect the Company's net assets, financial position and results of operations. Liquidity risk The danger of at some point not being able to meet payment obligations in a timely manner and in full is
THE RISK SITUATION IN SUMMARY
There have been no material changes to the Group's the existence of the Group or the individual compa- risk situation since the last report. Thanks to its risk nies in the past year. No concrete development is management system, Borussia Dortmund is in a presently identifiable that could materially and last- position to meet the statutory provisions with regard ingly impact Borussia Dortmund's net assets, finan- to control and transparency in the Company. cial position and results of operations or continued existence in the future. A review of the overall risk situation has concluded that in the past year, no risks existed that jeopardised
74 MANAGEMENT REPORT
REPORT ON EXPECTED DEVELOPMENTS
ANTICIPATED DEVELOPMENT OF THE COMPANY
After having entered into the agreement with its again to qualify for slots in international competitions marketing partner Sportfive and repaying the over the medium term. Morgan Stanley loan, Borussia Dortmund believes that it is in a position to invest more in its profes- We will maintain the course we have been following sional squad, as well as to finance its personnel for several seasons now – one of striving for sporting expenses from operating activities long-term, with- success from a sound equity base while avoiding finan- out needing to take on additional debt. Borussia cial risks – in order to re-establish ourselves at the top Dortmund expects that this will put it in a position ranks of the Bundesliga over the medium term.
EXPECTED GENERAL ECONOMIC ENVIRONMENT
The trend of rising popularity of the football as well as the familiar faces of Jürgen Klopp and Ralf Bundesliga observed in recent years seems to be con- Rangnick – the new Bundesliga season already pro- tinuing into the 2008/2009 season. Based on season mises to be a suspenseful and entertaining one. ticket sales, the first division clubs are already head- ed towards record spectator numbers for the season Even though it will be necessary to rethink the struc- that has just begun. ture of the new TV marketing agreement to bring it in line with legal rulings, the product on offer is still This trend is impressive proof of how attractive the top-notch and its market value is unquestionably Bundesliga is. Given high level of quality and per- high. The sound financial decision-making of the formance of all of the teams in the league and the new Bundesliga clubs puts them in a position to draw star generation of coaches – featuring new faces such as athletes into the league, and will surely enable them Jürgen Klinsmann, Fred Rutten and Bruno Labbadia, to make a big play every now and again, as well.
EXPECTED RESULTS OF OPERATIONS
ANTICIPATED EARNINGS DEVELOPMENT
In 2008/2009, earnings will again depend heavily on The management generally expects to generate a the key factor of sporting success. In particular, suc- consolidated operating profit (EBIT) for 2008/2009. cessful participation in the UEFA Cup can impact earnings for the year accordingly.
75 ANTICIPATED DEVELOPMENT Equally, the Company expects that expenses for mar- OF REVENUES keting commissions paid to Sportfive will increase, in particular as a result of expected increases in rev- As a result of our successful performance in the DFB enues, which cause expenses to rise proportionately. Cup competition, revenues in the past season rose to € 107.56 million – a result that will be difficult to Borussia Dortmund is intent on maintaining all oth- repeat without a similar sporting success, even con- er operating expenses at the same level, or even low- sidering the strong demand for season tickets, sold- ering them, in order to comply with savings meas- out hospitality suites in the stadium and the success- ures introduced in previous years. ful marketing of advertising space in and around SIGNAL IDUNA PARK. EXPECTED DIVIDENDS
As in previous years, we would like to point out here Following its repayment of the Morgan Stanley loan, that sporting success or increased transfer activities the KGaA still reports liabilities in the amount of could cause this level to rise considerably. € 68.76 million on its balance sheet. In spite of the resulting potential rise in earnings power and the pos- ANTICIPATED DEVELOPMENT OF itive results of recent years, a dividend payment would SIGNIFICANT OPERATING EXPENSES not be appropriate until Borussia Dortmund has re- established itself on the international sporting scene Expenses for professional players will be increased and generated long-term, substantial profits. in the 2008/2009 season in order to further guaran- tee and increase the competitiveness of the profes- sional squad.
EXPECTED FINANCIAL CONDITION
FINANCIAL PLANNING CAPITAL EXPENDITURE PLANNING
We will continue to reduce our liabilities as sched- Going forward, the focus of our investing activities uled in financial year 2008/2009 by repaying in instal- will lie on strengthening the professional squad and ments the long-term stadium financing. We do not in further upgrading SIGNAL IDUNA PARK. intend to take on new liabilities. Construction of the “Borusseum” extension in the northeast corner of the stadium, where the history of The amount of the other liabilities in the context of Borussia Dortmund will be housed, has made much our operating activities will be relatively unchanged. progress. The Borusseum will celebrate its grand opening in 2009. This renovation/construction project also includes a bridge linking the fan shop in the August Lenz building to the corner of the stadium.
76 MANAGEMENT REPORT
ANTICIPATED DEVELOPMENT OF LIQUIDITY
Due to the consolidated operating profit and the These surpluses will continue to provide us with the repayment of the Morgan Stanley loan, Borussia leeway needed to strengthen the professional team, Dortmund will continue to be in a position in the as well as to repay the long-term stadium financing future to generate substantial financial surpluses. on schedule.
OPPORTUNITIES
Its involvement in international competition will pro- against. Particularly in the UEFA Cup, BVB could vide the young Borussia team an opportunity to gen- face a tough opponent in the first round for which it erate additional revenues again for the first time, must rely on fate in the drawing. attributable to TV, sponsorship and ticketing revenues. No discussion of the sporting aspects would be com- In addition, the 2007/2008 season demonstrated that plete without mention of the youth of the squad. the successful participation in the national DFB Cup Despite the fact that in comparison with the previ- can lead to strong additional revenues. Both compe- ous season the average age of the squad has fallen, titions represent a major opportunity for Borussia the squad still possesses considerable potential. Dortmund to increase its consolidated net profit. Furthermore, many key players, such as Sebastian Kehl, have signed long-term commitments with Additionally, a successful sporting season can also be BVB. expected to translate into higher merchandising sales, leading in turn to rising revenues for this division. In addition to the increased earnings mentioned above resulting from sporting success, the profes- However, these opportunities also depend to a great sional squad offers tremendous transfer potential for extent on which teams Borussia Dortmund is drawn the future.
DEVELOPMENT FORECAST IN SUMMARY
The extension of our partnership with the marketing in making these investments. Thanks to our agency Sportfive and the subsequent repayment of increased financial flexibility, however, we have financial liabilities to Morgan Stanley have again already been able to sign key players this season, placed Borussia Dortmund in the comfortable posi- such as Neven Subotic, Tamas Hajnal, Patrick tion to be able to invest more in its professional Owomoyela and Mohamed Zidan. squad in order to systematically improve its compet- itiveness. In keeping with our policy of previous We will continue to strive to reclaim our place among years, we assumed no unforeseeable financial risks the leading Bundesliga clubs in the medium term.
77 THE DFB CUP – SPONSOR ADVERTISING
78 THE DFB CUP
Three of BVB's six Cup matches in the 2007/2008 season were broadcasted live on public television, offering sponsors a massive platform. 79 DERTHE DFB-POKAL DFB CUP – – WERBUNG SPONSOR FÜRADVERTISING SPONSORING
DRurcheaching das the Erreichen DFB Cup des final DFB-Pokal-Endspiels last season meant verbundenethe listed company Qualifikation in the für form den of UEFA-Cup performance auch thathat Borussia Borussia DortmundDortmund inalso der created vergangenen value for Sai- its inbonuses. Leistungsprämien für das börsennotierte partnersson auch andseinen sponsors. Partnern The und automatic Sponsoren qualifica- einen UnternehmenThree of the six niederschlägt. matches were broadcast live on tionMehrwert for the verschafft,UEFA Cup also der meantsich durch added die value damit for publicDrei television:der sechs Partien Over six wurden million live viewers, im öffent- on
Die BVB-Partner ins rechte BVB'sLicht gesetzt: partners Dede in the und spotlight: der DedeBremer and Diego Bremen's tragen Diego ihr Duell duel itvor out dem in frontSchriftzug of the der Signal Signal- IdunaIduna-Gruppe Group's aus.logo.
80 DER DFB-POKAL www.evonik.de
Wir stehen hinter dem BVB.
SponsorenSponsors use nutzen BVB diepublications BVB-Medien such as BORUSSIA BORUSSIAaktuell, BVB-SPIELTAG aktuell sowie andBVB-SPIELTAG BORUSSIA online to placeund BORUSSIA their marketing online communications, zur Platzierung which offer sure-fireihrer Marketingkommunikation. access to the target group. Die direkte Zielgruppenansprache ist ihnen gewiß.
lich-rechtlichenaverage, watched Fernsehen the second ausgestrahlt: round match Das Das10.3 Endspielmillion viewers, zwischen with Borussia as many Dortmund as 12 million und Achtelfinaleagainst Werder gegen Bremen, Werder which Bremen, Borussia das Borus- Dort- demwatching FC Bayern at the peak.München These verfolgten numbers imrepresen- Schnitt siamund Dortmund won 2:1. 5.5mit million 2:1 gegen Germans, Werder on average,Bremen 10,3ted market und in shares der Spitze of 33.7% sogar and zwölf 39.8%, Millionen respec- gewann,were glued verfolgten to their imscreen Durchschnitt watching über the semi-sechs Zuschauer.tively, thus Die representing Quoten entsprachen the greatest Marktanteilen market Millionenfinal against TV-Zuschauer. FC Carl Zeiss Beim Jena. Halbfinale gegen vonshare 33,7 for anybzw. DFB 39,8 Cup Prozent, final since womit 1987, laut according Kress- CarlThe Zeissfinal, Jenawhich saßen pitted durchschnittlich Borussia Dortmund 5,5 Mil- Reportto the Kress der höchste Report. Marktanteil eines DFB-Pokal- lionenagainst Deutsche FC Bayern vor Munich, ihren Fernsehschirmen. drew an average of finales seit 1987 erreicht wurde.
81 REPORT ON POST BALANCE SHEET DATE EVENTS
Borussia Dortmund is pleased to announce that it with an attractive opponent in the form of Hertha has sold 49,500 season tickets for 2008/2009, once BSC Berlin, also a Bundesliga club. The match is again underscoring Dortmunders' high level of expected to be played on 23 or 24 September 2008 at enthusiasm for and excitement in anticipation of SIGNAL IDUNA PARK. football in SIGNAL IDUNA PARK. After the second match day in the football From the sporting point of view, things are looking Bundesliga, Borussia Dortmund was in fourth place, distinctly encouraging. The additions of Lukas providing a good start into the 2008/2009 season. No Kruse, Felipe Santana, Patrick Owomoyela, Neven one expected an away win against Bayer 04 Subotic, Tamas Hajnal, Bajram Sadrijaj and Leverkusen and a tie against FC Bayern Munich at Mohamed Zidan to the roster of coach Jürgen Klopp SIGNAL IDUNA PARK, when the match schedule mean that the team is quantitatively und qualitative- was published for the first half of the season. Coach ly even better positioned than in the prior season. Jürgen Klopp's team laid a good foundation for the “We have succeeded in giving the squad more depth, current season. and the sense of competition within the team has increased,” concluded sport director Michael Zorc. Borussia Dortmund got off to a good start in the sea- Head coach Jürgen Klopp is also convinced that this son from a financial perspective as well, since adding will result in an ability to produce better perform- Brilliance Motors as a new Champion Partner. The ances and more attractive football. He hopes that his partners are planning a long-term alliance above and team will provide “positive surprises in all three com- beyond the current term of their agreement until petitions”. 2010.
Already before the start of the 2008/2009 Bundesliga Just prior to the end of the transfer period for the season, Borussia Dortmund has given a positive sign first half of the 2008/2009 season, BVB signed strik- of its sporting potential. Coach Jürgen Klopp's team er Mohamed Zidan from Hamburger Sportverein. beat Rot-Weiss Essen in the DFB Cup. In addition The player signed a four-year contract expiring on 30 to scorers Hajnal and Kringe, Nelson Valdez also June 2012. scored a goal in the match with a final score of 1:3. In return, HSV signed Mladen Petric. The clubs The draw for the 2nd main round of the DFB Cup have agreed to maintain confidentiality over the on 24 August 2008 provided Borussia Dortmund terms of release.
82 MANAGEMENT REPORT
OTHER DISCLOSURES
REPORT IN ACCORDANCE WITH § 315 (4) HGB
The Company gives the following information in 5. There is no control of voting rights in cases where response to the requirements of § 315 (4) Nos. 1 to employees are shareholders. 9 HGB: 6. Because of its legal form as a partnership limited 1. The share capital of Borussia Dortmund GmbH by shares, Borussia Dortmund GmbH & Co. & Co. KGaA amounts to € 61,425,000.00 and is KGaA does not have a management board. divided into 61,425,000 no-par value ordinary Instead, the Company's management and repre- bearer shares. All of the shares have been admit- sentation is the responsibility of the general part- ted to trading on the Official Market (General ner. The terms of § 6 No. 1 of the Articles of Standard) of the Frankfurt Stock Exchange and Association provide that this executive body of the in the over-the-counter markets (Regulated Company is Borussia Dortmund Geschäfts- Unofficial Markets) in Berlin, Bremen, Stuttgart, führungs-GmbH, whose registered office is in Munich, Hamburg and Düsseldorf. Each no-par Dortmund, on a permanent basis and not for a value share entitles the holder to one vote at the limited period of time, by virtue of its status as a General Shareholders' Meeting. The Company shareholder. The appointment and removal of therefore has only one class of shares and all managing directors of Borussia Dortmund shares carry the same rights and obligations. Geschäftsführungs-GmbH is governed by § 8 No. Additional rights and responsibilities attaching to 6 of its shareholders' agreement and is the the Company's shares are determined in accor- responsibility of the Executive Committee of its dance with the German Stock Corporation Act Advisory Board, and therefore not of the (Aktiengesetz, “AktG”). Supervisory Board of Borussia Dortmund GmbH & Co. KGaA. 2. There are no restrictions affecting the voting In principle, changes may be made to the Articles rights or transfer of the shares. of Association of Borussia Dortmund GmbH & Co. KGaA only by a resolution of its General 3. As of 30 June 2008, the Company had been noti- Shareholders' Meeting, which must be passed, in fied of the following interests in the share capital accordance with § 133 (1) AktG, by a simple of Borussia Dortmund GmbH & Co. KGaA in majority of votes and also, in accordance with § 15 excess of 10% of the voting rights: No. 3 of the Articles of Association of the – Morgan Stanley International Limited: 16.25% Company together with § 179 (1) and (2) AktG, by – Blue Bay Asset Management: 14.99% a simple majority of the capital represented at the passing of the resolution, except to the extent that 4. There are no shares with special rights which con- there are mandatory statutory provisions to the fer powers of control. contrary or the Articles of Association provide oth-
83 erwise. It is a mandatory provision of statute that from the beginning of the financial year in which a resolution of the General Shareholders' Meeting they are issued. The general partner is further passed by a majority of three-quarters of the share authorised, with the approval of the Supervisory capital represented at the passing of the resolution Board, to disapply the statutory subscription right is required for changes to the Articles of of the limited liability shareholders in certain cir- Association relating to the objects of the Company cumstances. (§ 179 (2) sentence 2 AktG), the issuance of non- In addition, by a resolution of the General voting preferred shares (§ 182 (1) sentence 2 Shareholders' Meeting held on 22 November AktG), capital increases where subscription rights 2005, the share capital of Borussia Dortmund have been disapplied (§ 186 (3) AktG), the cre- GmbH & Co. KGaA has been conditionally ation of conditional capital (§ 193 (1) AktG), the increased by up to € 14,625,000.00 by the issue of creation of authorised capital (§ 202 (2) AktG) – up to 14,625,000 new no-par value ordinary bear- where appropriate with authorisation to disapply er shares. The general partner is authorised until subscription rights (§ 203 (2) sentence 2 together 31 October 2010, with the approval of the with § 186 (3) AktG) –, the ordinary or simplified Supervisory Board, to issue bearer bonds with reduction of capital (§ 222 (1) sentence 2 and/or warrants and/or convertible bonds with a total § 229 (3) AktG) or a change of legal form (§ 233 nominal amount of up to € 40,000,000.00 and a (2) and/or § 240 (1) German Reorganisation Act maximum maturity of 25 years on one or more (Umwandlungsgesetz, “UmwG”)). In addition, occasions. The holders of bonds with warrants may capital increases, other changes to the Articles of be granted rights to subscribe for, and the holders Association and other decisions of a fundamental of convertible bonds may be granted rights to con- nature may only be resolved with the approval of vert into, a total of up to 14,625,000 new no-par the general partner, in accordance with § 285 (2) value ordinary bearer shares of the Company in sentence 1 AktG. The Supervisory Board is autho- accordance with the detailed terms and conditions rised in accordance with § 12 No. 5 of the Articles of the bonds with warrants and/or convertible of Association to resolve changes to the Articles of bonds. Association which relate only to their wording, in In the event of a takeover offer for shares issued particular in connection with the amount of capi- by the Company and admitted to trading on an tal increases out of authorised and conditional organised market, general statutory responsibili- capital. ties and powers also apply to the general partner. For example, if a takeover offer were to be 7. In accordance with § 5 No. 4 of the Articles of received, the general partner and the Supervisory Association of Borussia Dortmund GmbH & Co. Board would be required to issue and publish a KGaA, the general partner is authorised until 31 response to the offer, giving their reasons, in July 2011, with the approval of the Supervisory accordance with § 27 of the German Securities Board, to increase the share capital by the issue of Acquisition and Takeover Act (Wertpapierer - up to 21,937,500 new no-par value ordinary bear- werbs- und Übernahmegesetz, “WpÜG”), so that er shares against cash or non-cash contributions the limited liability shareholders can make a deci- on one or more occasions, but by a maximum of sion on the offer on an informed basis. Moreover, € 21,937,500.00 in total (Authorised Capital 2006). in accordance with § 33 WpÜG, once a takeover In all cases, the new shares participate in profits offer has been announced, the general partner
84 MANAGEMENT REPORT
may not take any actions outside the ordinary §§ 33a – 33c WpÜG (European prohibition on course of business which could frustrate the suc- frustrating action, European breakthrough rule, cess of the offer, unless those actions have been reservation of reciprocity). authorised by the General Shareholders' Meeting, or the Supervisory Board has given its approval to 8. The Company is not a party to any material agree- the actions or the actions relate to obtaining a ments which are conditional on a change of con- competing offer. In making their decisions, the trol following a takeover offer for the issued shares general partner and the Supervisory Board are of Borussia Dortmund GmbH & Co. KGaA. bound to have regard to the interests of the Company, its employees and its shareholders. At 9. The Company is not a party to any compensation the balance sheet date, there were no provisions of agreements applying in the event of a takeover the Articles of Association within the meaning of offer.
STATEMENT OF THE GENERAL PARTNER CONCERNING RELATIONS WITH AFFILIATED COMPANIES
The Dependent Company Report prepared by that was in each case reasonable under the circum- Borussia Dortmund GmbH & Co. KGaA pursuant stances known to us at the time such transactions to § 312 AktG sets out the relations with BV. Borussia were entered into. In all other cases, the Company 09 e.V. Dortmund as the controlling entity and its has been compensated for any disadvantages having affiliated companies. The general partner – repre- arisen. No other measures within the meaning of sented by its Managing Directors – issued the fol- § 312 (1) AktG were taken or omitted during the lowing concluding statement: financial year.
With respect to the transactions set out in the report Dortmund, 29 August 2008 concerning relations with affiliated companies, the Borussia Dortmund GmbH & Co. KGaA Company received consideration in the financial year Borussia Dortmund Geschäftsführungs- GmbH
Hans-Joachim Watzke Thomas Treß Managing Director (Chairman) Managing Director
85 THE DFB CUP – AN EYE ON BERLIN…
86 THE DFB CUP
19 April 2008: An almost unbearable tension before kick-off – the singing of the national anthem. 87 ... AN EYE ON DORTMUND
88 THE DFB CUP
19 April 2008: In Dortmund, thousands gather together to watch the deciding moment. 89 A tale of two cities: While half of the Olympic Stadium in Berlin cheered Borussia Dortmund on…
THE DFB CUP – AN EYE ON BERLIN, AN EYE ON DORTMUND
The image factor and advertising effect of foot- Of course, there is no comparison with such fig- ball are well known. The City of Dortmund esti- ures for the DFB Cup. Yet, when people speak of mates that the 2006 FIFA World Cup brought in BVB, they also mean Dortmund. The hotel indus- ¤200 million in advertising revenue. try profited from the four evening matches against Frankfurt, Bremen, Hoffenheim and Jena, with away fans booking overnight stays. Quarter- finalist opponent Hoffenheim alone drew over 7,000 fans to Dortmund at the end of February. Many of them enjoyed dining out in Dortmund.
... fans packed Friedensplatz in Dortmund to root for their team.
The DFB Cup final gives rise to a festive atmosphere in Dortmund. Entertainment is guaranteed.
90 THE DFB CUP
Franco-Brazilian duel in Berlin's Olympic Stadium: Dortmund's Tinga attacks Munich's Ribery.
The public viewing on the day of the final and the "We are proud of this team and nothing can stop team's return 24 hours later on Friedensplatz, us from celebrating it.", said Lord Mayor Dr. with over 20,000 visitors in total, were the high Gerhard Langemeyer. The name of his city was points of last year's cup season. The local econ- once again on everyone's lips in Germany. omy also benefited from these events – from Thanks to BVB. restaurants and pubs to street vendors.
Even the Lord Mayor is decked out in black and yellow: Dr. Gerhard Langemeyer.
BVB bench in Berlin: President Dr. Reinhard Rauball (2nd from left) and Hans-Joachim Watzke, Managing Director and Chairman (r.), greeted former Chancellor and honorary BVB member Dr. Gerhard Schröder (2nd from right), as well as his friend, the CEO of AWD Holding AG, Carsten Maschmeyer (l.).
91 CONSOLIDATED BALANCE SHEET
A S S E T S Note* 30 June 2008 30 June 2007 in EUR thousands in EUR thousands Non-current assets
Intangible assets (1) 15,398 14,866 Property, plant and equipment (2) 189,719 195,485 Investments in associates (3) 184 189 Financial assets (4) 309 253 Trade receivables and other assets (5) 7,013 7,608 Deferred tax assets (16) 6,495 6,420
219,118 224,821 Current assets
Inventories (6) 1,713 1,724 Trade receivables and other assets (5) 27,851 17,700 Cash and cash equivalents (7) 7,912 13,905
37,476 33,329 256,594 258,150
E Q U I T Y A N D L I A B I L I T I E S
Equity (8)
Subscribed capital 61,425 61,425 Reserves 19,187 24,939 Own shares -140 -142 Equity attributable to shareholders 80,472 86,222 Minority interest 332 314
80,804 86,536 Non-current liabilities
Non-current financial liabilities (9) 63,596 122,652 Non-current trade payables 1,150 245 Other non-current liabilities (10) 51,165 6,124 Non-current income tax liabilities (16) 3,232 4,232 Deferred tax liabilities (16) 0 1,934
119,143 135,187 Current liabilities
Current financial liabilities (9) 5,220 6,288 Current trade payables 10,685 5,022 Other current liabilities (10) 39,030 21,448 Current income tax liabilities (16) 1,712 3,669
56,647 36,427 256,594 258,150
* The relevant sections in the notes can be found on the following pages: (1) (2) – p. 106, (3) – p. 107, (4), (5) – p. 108, (6) – p. 109, (7), (8) – p. 110, (9) – p. 112, (10) – p. 113, (16) – p. 116.
92 CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
Note* 2007/08 2006/07 in EUR thousands in EUR thousands
Revenues (11) 107,559 97,115
Other work performed by the Company and capitalised 90 0
Other operating income 8,626 8,864
Cost of materials -4,707 -3,218
Personnel expenses (12) -45,355 -36,981
Depreciation and amortisation (13) -15,501 -13,546
Other operating expenses (14) -45,306 -36,639
Profit from operating activities 5,406 15,595
Income from investments in associates 45 13
Other interest and similar income 935 1,065
Interest and similar expenses -11,089 -9,595
Financial result (15) -10,109 -8,517
Profit/loss before income taxes -4,703 7,078
Income taxes (16) 759 3,037
Consolidated net profit/loss for the year -3,944 10,115
- of which attributable to shareholders: -4,018 10,067
- of which minority interest: 74 48
Earnings per share: (20) -0.07 0.17
* The relevant sections in the notes can be found on the following pages: (11), (12), (13) – p. 115, (14), (15), (16) – p. 116, (20) – p. 120.
93 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Reserves
Subscribed Capital Other revenue Revaluation Own Capital reserves reserves reserve shares in EUR thousands
30 June 2006 43,875 14,230 -20,642 0 -143
Distributions 0 Capital increase 17,550 19,548 Sale of own shares 1 61,425 33,778 -20,642 0 -142 Consolidated net profit for the year 10,067 Cashflow hedges, net of tax 1,736 Total comprehensive income 0 0 10,067 1,736 0 30 June 2007 61,425 33,778 -10,575 1,736 -142
Distributions 0 Sale of own shares 22 61,425 33,780 -10,575 1,736 -140 Consolidated net profit/ loss for the year -4,018 Cashflow hedges, net of tax -1,736 Total comprehensive income 0 0 -4,018 -1,736 0 30 June 2008 61,425 33,780 -14,593 0 -140
STATEMENT OF CHANGES IN NON-CURRENT ASSETS
Cost At At in EUR thousands 1 July 2007 Additions Disposals Reclassifications 30 June 2008 Intangible assets Player registrations 31,172 7,815 1,463 3,671 41,195 Industrial property rights and similar rights 1,499 0 339 0 1,160 Payments on account 3,671 0 0 -3,671 0 36,342 7,815 1,802 0 42,355 Property, plant and equipment Land, land rights and buildings including buildings on third-party land 207,887 199 1,474 0 206,612 Other equipment, operating and office equipment 26,631 2,490 1,132 0 27,989 Payments on account and assets under construction 0 301 0 0 301 234,518 2,990 2,606 0 234,902 Investments in associates 189 0 5 0 184 Financial assets 253 85 29 0 309 271,302 10,890 4,442 0 277,750
94 CONSOLIDATED FINANCIAL STATEMENTS
Equity attributable to Minority Consolidated shareholders interest equity
37,320 304 37,624
-38 -38 37,098 37,098 11 74,419 266 74,685
10,067 48 10,115 1,736 1,736 11,803 48 11,851 86,222 314 86,536
-56 -56 44 86,226 258 86,484
-4,018 74 -3,944 -1,736 -1,736 -5,754 74 -5,680 80,472 332 80,804
Depreciation and amortisation Carrying amounts At At At At 1 July 2007 Additions Disposals 30 June 2008 30 June 2008 30 June 2007
20,005 6,762 955 25,812 15,383 11,167
1,471 12 338 1,145 15 28 0000 03,671 21,476 6,774 1,293 26,957 15,398 14,866
26,728 6,829 1,474 32,083 174,529 181,159
12,305 1,898 1,103 13,100 14,889 14,326
0 0 0 0 301 0 39,033 8,727 2,577 45,183 189,719 195,485
0 0 0 0 184 189 0 0 0 0 309 253 60,509 15,501 3,870 72,140 205,610 210,793
95 Borussia Dortmund
CONSOLIDATED CASH FLOW STATEMENT
see Note (17) 2007/08 2006/07 in EUR thousands
Profit/loss for the period before taxes -4,703 +7,078
Depreciation and amortisation of non-current assets +15,501 +13,546
Loss from disposals of non-current assets -4,281 -6,767
Interest income -935 -1,065
Interest expense +11,089 +9,595
Income from investments in associates -45 -13
Changes in other assets not classified as from investing or financing activities -11,701 +3,639
Changes in other liabilities not classified as from investing or financing activities +63,338 -6,634
Interest received +478 +251
Interest paid -9,130 -9,504
Income taxes paid -3,055 -1,590
Change in restricted funds +19 +3,589
Cash flows from operating activities +56,575 +12,125
Payments for investments in intangible assets -3,056 -13,619
Proceeds from disposals of intangible assets +4,543 +6,065
Payments for investments in property, plant and equipment -1,693 -2,578
Payments for investments in financial assets -84 -78
Proceeds from financial assets +29 +26
Dividends received +50 0
Cash flows from investing activities -211 -10,184
Cash receipts from the issue of capital 0 +15,135
Proceeds from the sale of own shares +4 +1
Dividends paid to minority shareholders -56 -38
Proceeds from finance raised +19,690 0
Repayments of financial liabilities -81,773 -32,447
Repayments of liabilities from the finance lease -203 -99
Cash flows from financing activities -62,338 -17,448
Net change in cash funds -5,974 -15,507
Cash funds at beginning of period +13,886 +29,393 Cash funds at end of period +7,912 +13,886
* see Note (17) – p. 118.
96 CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
BASIC PRINCIPLES
POLICIES AND METHODS • IFRS 7 “Financial Instruments: Disclosures” • IFRIC 10 “Interim Financial Reporting and Borussia Dortmund GmbH & Co. KGaA (“BVB”) Impairment” has its headquarters at Rheinlanddamm 207-209, • IFRIC 11 “IFRS 2: Group and Treasury Share Dortmund, Germany. BVB's professional team Transactions” has participated in the 1stBundesliga for more The first-time adoption of IFRS 7 has led to addi- than three decades. In addition, BVB Group tional disclosures in the notes in connection with companies are engaged in the sale of merchan- financial instruments. The remaining accounting dise, the provision of internet and travel agency standards adopted for the first time had no effect services, the running of a medical rehabilitation on the assets, liabilities, financial position and centre and the operation of the football stadium profit or loss of the Group. in Dortmund, trading under the name SIGNAL IDUNA PARK. The IASB has also issued the following standards, These consolidated financial statements of BVB interpretations and amendments to existing stan- for the financial year from 1 July 2007 to 30 June dards that have completed the official EU 2008, including the prior-year information, were endorsement process but whose adoption is not prepared in accordance with International yet mandatory. No use has been made of the Financial Reporting Standards (IFRS), as adopt- option of early adoption. The future application of ed in the European Union and in force at the bal- the following standard is not expected to have any ance sheet date, and the supplementary provi- effect on the consolidated financial statements: sions of German commercial law required to be observed in accordance with § 315 HGB and • IFRS 8 “Operating Segments” § 315a (1) HGB. The term “IFRS” includes the recent International Financial Reporting In order to improve the clarity and usefulness of Standards (IFRS) and the International Account- the financial information, certain items in the ing Standards (IAS) issued by the International income statement and the balance sheet have Accounting Standards Board (IASB) in London been combined. These items are reported sepa- as well as the interpretations of the International rately and explained in the notes. The income Financial Reporting Interpretations Committee statement was prepared in accordance with the (IFRIC) and the Standing Interpretations nature of expense method. Committee (SIC). The consolidated financial statements are pre- The following accounting standards and interpre- sented in thousands of euros. tations, or amendments of existing standards, were required to be adopted for the first time in By a resolution dated 29 August 2008, the con- the past financial year: solidated financial statements and the Group management report were authorised by the • Amendments to IAS 1 “Presentation of Company's management for submission to the Financial Statements” Supervisory Board.
97 Borussia Dortmund
SCOPE OF CONSOLIDATION
In addition to Borussia Dortmund GmbH & Co. Orthomed GmbH, in which the Group holds KGaA, the consolidated financial statements 33.33% of the shares and of the voting rights, has include seven (prior year: seven) fully consolidat- been included in the consolidated financial state- ed subsidiary companies and one associated com- ments as an investment in associates under the pany accounted for using the equity method. equity method in accordance with IAS 28.
The list of shareholdings as at 30 June 2008 and 30 June 2007 was as follows:
Company Registered Shareholding office (%)
BVB Stadionmanagement GmbH Dortmund 100.00
BVB Stadion Holding GmbH (formerly: goool.de Sportswear GmbH) Dortmund 100.00
Sports & Bytes GmbH Dortmund 100.00
BVB Merchandising GmbH Dortmund 100.00
BVB Stadion GmbH Dortmund 99.74
BVB Beteiligungs GmbH Dortmund 94.90
B.E.S.T. Borussia Euro Lloyd Sports Travel GmbH Dortmund 51.00
Orthomed GmbH Medizinisches Leistungs- und Rehabilitationszentrum GmbH Dortmund 33.33
CONSOLIDATION PRINCIPLES
The annual financial statements of the companies company. Where companies consolidated had a included in BVB's consolidated financial state- different balance sheet date in the previous finan- ments are prepared in accordance with IFRS cial year, interim financial statements were pre- using consistent accounting policies. pared as at the reporting date of the parent com- pany. The investment in the associate Orthomed The reporting date for the consolidated financial GmbH was measured on the basis of annual statements is the reporting date of the parent financial statements for the calendar year. Interim
98 CONSOLIDATED FINANCIAL STATEMENTS
financial statements were not prepared because using the equity method and initially recognised the company is not material in the context of the at cost. The Group's share of profits and losses of information conveyed by the consolidated finan- associates is recognised in the income statement cial statements of BVB, and because there were from the date of acquisition, while the share of no material transactions or other events in the changes in reserves is reflected in consolidated business of this company between its own year- reserves. The carrying amount of the investment end and that of the Group. is adjusted to reflect the cumulative changes since the date of acquisition. There were no unrealised Intercompany revenues, income and expenses, gains at any date from transactions between and all receivables and liabilities between com- Group companies and associates which would panies included in the consolidated financial have been required to be eliminated on consoli- statements are eliminated on consolidation and dation. provisions relating to other Group companies are reversed. ACCOUNTING POLICIES On the initial consolidation of subsidiaries, the cost of the investment is netted against the The significant accounting policies used in the Group's share of the carrying amount of the net preparation of these consolidated financial state- assets of the relevant company. The difference ments are presented below. The policies between the cost of the investment and the share described were applied consistently for the of the net assets is allocated in full to the assets reporting periods shown, unless otherwise indi- and liabilities of the subsidiary, to the extent that cated. it represents unrecognised gains or losses. Any remaining positive difference is recognised as Intangible assets goodwill. Subsidiaries are fully consolidated from Purchased intangible assets are measured at cost the date on which the Group obtains control. The less amortisation based on their expected useful inclusion of subsidiaries in the consolidated finan- lives or at the lower fair value. Player registrations cial statements ends as soon as the parent com- reported in these financial statements are meas- pany ceases to have control. ured at cost, taking into account the FIFA Regulations for the Status and Transfer of Players Minority interests represent the share of net contained in circular no. 769 of 24 August 2001 assets that is not attributable to the Group. which came into force on 21 September 2001, Accordingly, minority interests are reported sep- and are amortised on a straight-line basis in accor- arately within consolidated equity and the con- dance with the term of the individual contracts solidated income statement. for professional players. The cost of player regis- trations includes transfer payments made and the Associates over which the Group has a significant costs of advisers directly attributable to the par- but not a controlling influence are accounted for ticular transfer.
99 Borussia Dortmund
Computer software for commercial and technical buildings in the balance sheet represents the car- applications is amortised on a straight-line basis rying amount as at 1 July 2004 less depreciation over three years. charged subsequently.
Property, plant and equipment Land, the other buildings and the remaining The SIGNAL IDUNA PARK stadium buildings items of property, plant and equipment are meas- were measured at their fair value amounting to ured at cost less depreciation. Borrowing costs € 177,200 thousand in the IFRS opening balance are recorded as an expense in the period in which sheet as at 1 July 2004, in accordance with the they are incurred. Repair and maintenance costs option permitted by IFRS 1.16. This valuation is are recognised in the income statement as based on the opinion of an independent external expenses in the current period. expert. The carrying amount of the stadium
Depreciation, mainly on a straight-line basis, is based on the following useful lives:
Useful life in years
Stadium 30 Other buildings 25 to 50 Technical equipment and machinery 4.5 to 15 Other equipment, operating and office equipment 7 to 15
Significant parts of the stadium building are depreciated over their respective specific useful lives (com- ponent approach).
100 CONSOLIDATED FINANCIAL STATEMENTS
Impairment testing The payment obligations resulting from finance The useful lives of intangible assets and items of lease agreements are recognised as a liability. The property, plant and equipment are all finite. If lease payments are apportioned between the there are specific indications of possible impair- finance charges and the element representing the ment, individual assets are tested for impairment. repayment of the remaining liability in such a way In the case of intangible assets, the useful life and that a constant rate of interest is charged on the the method of amortisation are reviewed at least outstanding lease obligation over the period of the at the end of each financial year. An impairment lease (effective interest method). Interest charges loss is recognised for the amount by which the are expensed immediately. If substantially all the carrying amount exceeds the recoverable amount. risks and rewards of ownership remain with the The recoverable amount is the higher of net dis- lessor (operating lease), the lease payments are posal proceeds and value in use. If the reason for recognised as an expense in the financial year. an impairment write-down recognised in prior years no longer exists, the impairment loss is Financial instruments reversed until the carrying amount of the asset, At the balance sheet date and in the comparable net of depreciation and amortisation, equals the period, the Group held no financial instruments amount that would have been determined if an accounted for at fair value through profit or loss. impairment loss had not been recognised. Held-to-maturity investments are non-derivative Leases financial assets with fixed payments and maturi- The Group's leases relate in particular to devel- ties that the Group intends to hold to maturity. oped land and operating and office equipment. Held-to-maturity investments are measured at amortised cost after their initial recognition. As at Leased assets in respect of which substantially all 30 June 2008, held-to-maturity investments the risks and rewards of ownership have been amounted to € 309 thousand (30 June 2007: transferred to the Group (finance lease) are recog- € 253 thousand). nised at the present value of the lease payments or at the lower fair value in accordance with IAS Loans and receivables are financial assets or lia- 17 and depreciated over the useful life or the bilities with fixed or determinable payments that shorter lease term. In the case of leases of land are not quoted in an active market. Receivables and buildings, the components of the land and are recognised at amortised cost less any valua- buildings are considered separately for the pur- tion allowances required for impairment. Loans pose of the classification of the leases. are measured on initial recognition at the amount
101 of the consideration received less transaction loan from Morgan Stanley & Co. Int. Ltd., costs attributable to the issue of the liability. After London. This interest rate swap was measured at initial recognition, interest-bearing loans are fair value using recognised pricing models. The measured at amortised cost using the effective swap was recognised as an asset if the fair value interest method net of repayments made. was positive and as a liability if the fair value was Liabilities from finance leases are reported under negative. The interest rate swap was recorded in other liabilities at their present values, calculated accordance with the requirements of IAS 39 using the effective interest method. At 30 June relating to the accounting treatment of cash flow 2008, there were no financial liabilities designat- hedges. The effective portion of the gain or loss ed at fair value through profit or loss (30 June on the interest rate swap was recognised direct- 2007: € 0). ly in equity net of deferred taxes, while the inef- fective portion was recognised immediately in Available-for-sale financial assets are measured profit or loss. At the most recent balance sheet at their fair value. Unrealised gains and losses date, the interest rate swap was determined to be from subsequent remeasurement are recognised fully effective. When the loan was repaid ahead directly in equity net of deferred taxes until the of schedule, the interest rate swap was also sold, financial instrument is sold or suffers permanent and the proceeds recognised directly in equity impairment. If evidence of impairment is estab- were eliminated from the balance sheet. lished in the course of regular impairment test- ing, the relevant expense is recognised immedi- Deferred taxes ately in profit or loss. At the balance sheet date Deferred taxes are recognised for all temporary and in the comparable period, the Group held no differences between the tax base of assets and lia- available-for-sale financial assets. bilities and their carrying amounts in the IFRS financial statements (liability method). However, If the maturity of a financial instrument is less if in the course of a transaction which is not a than 12 months after the balance sheet date, it is business combination a deferred tax asset or lia- reported in the balance sheet under current bility arises from the initial recognition of an assets or liabilities. asset or liability which, at the time of the trans- action, affects neither the accounting nor the tax- Derivative financial instruments able profit or loss, the deferred tax asset or lia- and hedging bility is neither recognised at the date of initial Until June 2008, the Group used only one deriv- recognition nor afterwards. ative financial instrument for the purpose of hedging the cash flow risks from interest rate Deferred tax assets are recognised to the extent changes arising from the variable-rate long-term that it is probable that taxable profits will be
102 CONSOLIDATED FINANCIAL STATEMENTS
available against which the temporary difference resale in excess of cost are added to capital can be utilised. Deferred tax assets are also reserves, while shortfalls are taken to revenue recognised for tax loss carry-forwards that can be reserves. utilised in subsequent periods, provided it is suf- ficiently probable that the deferred tax asset will Provisions and contingent liabilities be recoverable. In accordance with IAS 37, provisions are recog- nised where a present obligation exists to third Deferred taxes relating to items recognised direct- parties arising from a past event, which is expect- ly in equity are also recognised directly in equity. ed to result in an outflow of resources and whose amount can be reliably estimated. No provisions Deferred tax assets and liabilities are netted have been reported in these consolidated finan- against each other where the Group has a legally cial statements because it was possible to deter- enforceable right to set off current tax assets mine the amount and timing of all obligations against current tax liabilities, and the deferred tax with sufficient certainty, with the result that these assets and liabilities relate to income taxes levied obligations have been reported under liabilities. by the same taxation authority on the same tax- able entity. Contingent liabilities which do not meet the cri- teria for recognition as a provision are disclosed in Deferred tax assets and liabilities are measured the notes, unless the probability of an obligation on the basis of the tax laws in force at the balance occurring is remote. sheet date using a rate of income tax of 31.6% (previous year: 39.9%). Recognition of income and expenses Revenues are recognised when it is probable that Inventories the economic benefits will flow to the Group and Inventories consist principally of merchandising the amount of income can be measured reliably. articles and goods held by the subsidiary compa- Revenues are measured at the fair value of the ny BVB Merchandising GmbH. Inventories are receivable or consideration received and repre- measured at cost less any individual allowances sent amounts for goods delivered and services for goods whose cost may not be recoverable. provided in the ordinary course of business, less rebates, VAT and other taxes arising in relation to Own shares revenues. The full amount paid for the purchase of own shares is reported as an item deducted from equi- Interest income and expenses are allocated to the ty. The Company has the right to reissue own period to which they relate, taking into account shares purchased by it at a later date. Proceeds of the outstanding amount of the loan and the effec-
103 tive interest rate to be applied. The effective significant currency risks. The methods of man- interest rate is the discount rate at which the aging the individual types of risk are described in present value of the estimated future cash the following. receipts over the term of the financial asset is equal to its net carrying amount. Interest rate risks The Group's financial liabilities at the balance Operating expenses are recognised when the sheet date consist mainly of fixed-interest loans. goods or services are utilised or at the date the The Group is therefore not exposed to any sig- expenses are incurred. nificant interest-rate-related cash flow risks as at the balance date or over the medium term. Revenues In accordance with the classification prescribed Credit risk by the German Football League (Deutsche The Group conducts business exclusively with Fußball Liga GmbH, “DFL”) for the licensing third parties of high credit standing. Concen- procedure, income from the sale of transfer trations of credit risk can arise in the context of a rights for player registrations is reported under player transfer and from long-term sponsorship revenues. The expenses associated with the agreements. Such concentrations of risk are mon- transfer activities such as the book values of itored in the course of the Group's operating assets sold and incidental costs of disposal are activities. reported as other operating expenses. The maximum credit risk in the event of coun- terparty default is equal to the carrying amount of MANAGEMENT OF FINANCIAL RISKS these instruments.
The BVB Group finances itself primarily from Liquidity risk long-term bank loans, finance leases, trade The Group constantly monitors the risk of possi- payables, season tickets paid for in advance and ble liquidity bottlenecks, taking into account the payments from sponsors. The related risks aris- probable maturities of its financial liabilities and ing comprise interest-rate-related cash flow risks, the timing of the expected cash flows from oper- market risks, liquidity risks and credit risks. On ating activities. The Group counters potential liq- the other hand, the Group is not exposed to any uidity risk by taking up largely long-term financ-
104 CONSOLIDATED FINANCIAL STATEMENTS
ing. Appropriate corporate planning is used to SEGMENT REPORTING constantly monitor short-term financing compo- nents. BVB's business activities consist of the operation of a football club including a professional foot- ball team. There are no further business seg- SIGNIFICANT DECISIONS SUBJECT TO ments with distinguishable components and risks JUDGMENT AND ESTIMATES and rewards different from those of other busi- ness segments. The business activities of the sub- The collectability of trade receivables is assessed sidiary companies do not meet the criteria for based on the estimated probability of default. reportable segments in IAS 14 as a result of their Specific valuation allowances are calculated for lack of economic significance and are therefore overdue receivables using individually deter- not subject to the obligation to prepare segment mined percentages. In the event that the finan- reporting. cial situations of our partners worsen, the amounts actually written down may exceed the amount of the valuation allowances recognised. This could negatively impact the results of oper- ations.
Deferred tax assets are recognised in respect of tax loss carry-forwards to the extent that it is probable that taxable income will be available to enable the loss carry-forwards actually to be utilised. In order to determine the amount of the deferred tax assets required to be recognised in this context, management makes significant assumptions with respect to the expected timing and amount of future taxable income. As at 30 June 2008, deferred tax assets recognised in respect of tax loss carry-forwards amounted to € 6,151 thousand (30 June 2007: € 6,264 thousand).
105 Borussia Dortmund
NOTES TO THE CONSOLIDATED BALANCE SHEET
(1) Intangible assets
in EUR thousands 30 June 2008 30 June 2007
Player registrations 15,383 11,167 Industrial property rights and similar rights 15 28 Payments on account for player registrations 0 3,671
15,398 14,866
Intangible assets consist of purchased player reg- term of the significant player registrations istrations and computer software. The increase amounted to 3.1 years (30 June 2007 3.1 years). in player registrations is mainly due to the trans- fer payments in respect of the new signings Changes in intangible assets are presented in a Petric, Rukavina and Klimowicz. At the balance separate overview forming part of the notes to sheet date, the weighted remaining contractual the consolidated financial statements.
(2) Property, plant and equipment
in EUR thousands 30 June 2008 30 June 2007
Land, land rights and buildings including buildings on third-party land 174,529 181,159 Other equipment, operating and office equipment 14,889 14,326 Payments on account and assets under construction 301 0
189,719 195,485
Property, plant and equipment consists princi- primarily consist of further investments in the pally of the stadium and former offices and the Dortmund-Brackel training ground and the com- adjoining area “Am Luftbad”, and also the facili- plete renovation of the Conference Centre, ties at the training ground in Dortmund-Brackel, Business Club and Borussia Park located in the the youth centre, catering extensions and items circulation levels of SIGNAL IDUNA PARK. of operating and office equipment at these facil- Additional investments were made in the techni- ities and at the administrative headquarters. cal equipment of the stadium, parking spaces and Additions to property, plant and equipment advance payments made for the Borusseum.
106 CONSOLIDATED FINANCIAL STATEMENTS
Property, plant and equipment include the following assets not legally owned by the Group and subject to finance leases:
Net carrying amounts in EUR thousands 30 June 2008 30 June 2007
Buildings 2,999 3,244 Operating and office equipment 3,640 2,698
6,639 5,942
The items of property, plant and equipment recog- sponding increase in the carrying amount of prop- nised in the balance sheet as a result of finance erty, plant and equipment subject to finance leas- leases consist of buildings and other facilities at es and in the liabilities from finance leases. The the Dortmund-Brackel training ground; the lease Company has an option to purchase the entire site in respect of the land at the training ground, on following the expiry of the lease term in 2022. the other hand, is classified as an operating lease. Changes in property, plant and equipment are In the current financial year, the completion of the presented in a separate overview forming part of second phase of construction resulted in a corre- the notes to the consolidated financial statements.
(3) Investments in associates
in EUR thousands 30 June 2008 30 June 2007
At the beginning of the year 189 176 Share of profits 45 13 Distributions -50 +0 At the end of the year 184 189
The Group's share of the profits of its associated company Orthomed GmbH and its share of the assets and liabilities are as follows:
in EUR thousands 31 Dec. 2007 31 Dec. 2006
Share of assets 275 219 Share of liabilities 94 66 Share of revenues 1,099 1,074 Share of profit for the year 50 19
107 Borussia Dortmund
(4) Financial assets Financial assets consist mainly of a tenant's loan relating to an operating lease agreement and various employee loans. The carrying amounts generally reflect market values.
(5) Trade receivables and other assets
Non-current
in EUR thousands 30 June 2008 30 June 2007 Trade receivables 48 4,290 Interest rate swap 0 2,888 Receivables from related parties 1,389 0 Other assets and prepaid expenses 5,576 430 7,013 7,608
Non-current trade receivables are discounted recognised directly in equity were eliminated using the effective interest method and measured from the balance sheet. at amortised cost. The carrying amounts of trade receivables generally reflect their market values. Other assets and prepaid expenses consist princi- pally of prepayments relating to the professional When the loan from Morgan Stanley & Co. Int. squad and insurance premiums. The amounts are Ltd., London, was repaid ahead of schedule, the reversed rateably over the terms/lives of the indi- interest rate swap was also sold. The proceeds vidual items.
Current
in EUR thousands 30 June 2008 30 June 2007 Trade receivables 24,661 12,345 less: allowances -1,200 -544 Trade receivables - net 23,461 11,801
Receivables from related parties 0 1,394 Other assets 4,390 4,505 27,851 17,700
108 CONSOLIDATED FINANCIAL STATEMENTS
Trade receivables and other assets do not bear residual purchase price (value added tax) in con- interest and mostly have a maturity of up to 3 nection with the marketing agreement entered months. The carrying amounts of trade receiv- into with SPORTFIVE GmbH & Co. KG, ables generally reflect their market values. Hamburg, which is described in greater detail Trade receivables rose as at the balance sheet under note 10. date, primarily as a result of the outstanding
Changes in the allowance account were as follows:
in EUR thousands 30 June 2008 30 June 2007
As at 1 July 2007 544 590 Transfers recognised through profit and loss 744 293 Use 0 -234 Reversal -88 -105 As at 31 December 2008 1,200 544
General As in the previous year, no current receivables year: € 9,440 thousand) were due from a single were overdue as at the balance sheet date and debtor. In addition, current receivables from none were fully or partially impaired. SPORTFIVE GmbH & Co. KG amounted to Non-current and current trade receivables € 9,500 thousand at the balance sheet date. amounting in total to € 4,725 thousand (previous
(6) Inventories
in EUR thousands 30 June 2008 30 June 2007
Inventories 1,624 1,737 - impairment losses -16 -63 Payments on account 105 50 Inventories - net 1,713 1,724
During the current and previous financial year, no impairment write-downs to net realisable val- ue were recognised in cost of materials.
109 (7) Cash and cash equivalents
in EUR thousands 30 June 2008 30 June 2007
Bank balances and cash-in-hand 7,912 13,905
Balances with banks bear interest at variable rates of interest applying to demand deposits. Of the cash and cash equivalents reported at the balance sheet date, € 0 thousand (previous year: € 19 thousand) were subject to restrictions on the right of disposal.
(8) Equity The development of equity and minority interests shares with a notional share in the share capital of is presented in the statement of changes in equity. € 1.00 per share. The shares are fully paid-up; the number of shares issued and the number of shares Subscribed capital outstanding changed as follows: The subscribed capital of Borussia Dortmund GmbH & Co. KGaA is divided into no-par value
Own Number of shares Issued shares Outstanding
1 July 2006 43,875,000 -23,871 43,851,129 Capital increase 2006 17,550,000 Change in holding of own shares 236 30 June 2007 61,425,000 -23,635 61,401,365
Change in holding of own shares 345 30 June 2008 61,425,000 -23,290 61,401,710
In the period between the date of admission of 15 August 2006, the general partner resolved to the Company's shares to trading (31 October increase the share capital by up to € 17,550,000 to 2000) and the balance sheet date, the Company up to € 61,425,000 by the issue of up to 17,550,000 acquired a total of 34,000 no-par value shares and new bearer shares with subscription rights for sold 10,365 no-par value shares off-market in the shareholders. The limited liability shareholders form of printed physical share certificates. At the exercised their subscription right in the ratio of 5:2 balance sheet date, the Company held 23,290 no- for a total of 7,567,585 new shares at an issue price par value shares, representing 0.038% of the of € 2.00 per no-par value share. The 9,982,415 share capital. new shares not subscribed for by the existing On the basis of the authorisation granted by the shareholders were acquired by Morgan Stanley & extraordinary General Shareholders' Meeting on Co. International Ltd., London, at a price of € 2.20
110 CONSOLIDATED FINANCIAL STATEMENTS
per share in return for a non-cash contribution The remaining reserves consist entirely of other consisting of loans from the BVB Group. The pre- revenue reserves. Revenue reserves comprise mium of € 19,548 thousand over the nominal profits generated and not distributed by Group amount of the issue was added to capital reserves. companies in the current year and previous years The capital increase was entered in the commer- and accumulated losses. In addition, the net cial register on 19 September 2006. effect, taking account of subsequent adjustments, of the remeasurement of SIGNAL IDUNA PARK At the balance sheet date, as in the previous year, in accordance with IFRS 1.16 is reported under conditional capital expiring on 31 October 2010 this item. for the purpose of issuing convertible bonds and The revaluation reserve reported at the last bal- bonds with warrants amounted to € 14,625 thou- ance sheet date related to the positive fair value of sand. The extraordinary General Share holders' the interest rate swap entered into at that time Meeting held on 15 August 2006 also authorised amounting to € 2,888 thousand net of deferred tax- the general partner until 31 July 2011, with the es of € 1,152 thousand. When the loan was repaid approval of the Supervisory Board, to increase the ahead of schedule, the interest rate swap was also share capital by the issue of up to 21,937,500 new sold, and the proceeds recognised directly in equi- no-par value shares for cash or non-cash contri- ty were eliminated from the balance sheet. butions. Capital management Reserves The objective of capital management is to ensure Capital reserves consist exclusively of transfers in the Group's long-term ability to function on a respect of premiums on the issue of new shares going concern basis and to generate appropriate after deducting the net costs of the placement and returns for shareholders. Debt management steers the Company's share of revenues from the sale of the raising of debt, particularly with regard to its own shares. financing with matching maturities.
The capital structure at the balance sheet date was as follows:
in EUR thousands 30 June 2008 30 June 2007
Equity attributable to BVB shareholders 80,472 86,222 Share of net assets 53.9% 40.1%
Non-current financial liabilities 63,596 122,652 Current financial liabilities 5,220 6,288 Total financial liabilities 68,816 128,940 Share of net assets 46.1% 59.9% Net assets 149,288 215,162
The reduction in total capital is mainly attributable Stanley & Co. International Ltd., London, to the early repayment of the loan from Morgan England discussed in greater detail under note 9.
111 (9) Financial liabilities
30 June 2008 30 June 2007
weighted Carrying weighted Carrying average amount average amount interest rate EUR thou. interest rate EUR thou.
non-current Loan from Morgan Stanley & Co. Int. Ltd. 0 6.5% 73,525 Liabilities to other banks 6.1% 59,241 5.7% 44,243 Other loans 9.5% 4,355 9.4% 4,884 63,596 122,652
current Loan from Morgan Stanley & Co. Int. Ltd. 0 6.5% 3,716 Liabilities to other banks 6.3% 4,692 5.7% 2,171 Other loans 8.3% 528 9.1% 401 5,220 6,288 68,816 128,940
In June 2008, the existing long-term loan from maturity dates between 2020 and 2026; fixed- Morgan Stanley & Co. International Ltd., interest periods apply until 2016. London, England, was repaid ahead of schedule. The loan was refinanced mainly using payments As a result of the existing fixed-interest periods received in relation to the agency licensing agree- applying to all loans, the BVB Group is not ment entered into with SPORTFIVE GmbH & exposed to any significant risk from changes in Co. KG, Hamburg, regarding the marketing of interest rates, even in the medium and long term. BVB and discussed in greater detail under note 10. In addition, the Company took out a fixed- Pledged collateral: interest loan with a nominal amount of € 20,000 Items of property, plant and equipment with a thousand with Westdeutsche ImmobilienBank remaining book value of € 159.457 thousand AG, Mainz. This fixed-interest loan will fall due (30 June 2007: € 182,342 thousand) have been in June 2013. The loan conditions include pledged as security for financial liabilities. covenants relating to the consolidated equity ratio and the interest coverage ratio (EBIT- As in the previous year, future claims, not reflect- DA/interest expense) in the consolidated finan- ed in the financial statements, from season ticket cial statements. sales (excluding the hospitality area), were assigned. In addition, future claims from the The other liabilities to banks consist of a number agreement for the rights to the stadium name of loans repayable in instalments. The loans have were also assigned in the previous year.
112 CONSOLIDATED FINANCIAL STATEMENTS
The maturities of non-current financial liabilities were as follows:
in EUR thousands 30 June 2008 30 June 2007
Between 1 and 5 years 35,738 31,513 Over 5 years 27,858 91,139 63,596 122,652
On the basis of the general level of interest rates June 2007: € 873 thousand) below their carrying at the balance sheet date, the fair value of the amounts. All financial liabilities are denominated financial liabilities is around € 1,126 thousand (30 in euros.
(10) Other liabilities
in EUR thousands 30 June 2008 30 June 2007
non-current Advance payments received for agency licence and marketing rights 44,000 0 Liabilities from finance leases 7,165 6,124 51,165 6,124
current Advance payments received from season ticket sales 7,097 7,965 Advance payments received for agency licence and marketing rights 4,000 0 Advance payments received from sponsors 494 200 Other taxes 13,972 5,638 Outstanding salaries 7,129 2,619 Social security 15 5 Holiday entitlements 150 200 Liabilities from finance leases 247 194 Other 5,926 4,627 39,030 21,448 Other liabilities, total 90,195 27,572
Pursuant to an agency licensing agreement dated against payment of a total € 50,000 thousand. The 18 June 2008, responsibility for the marketing of payments received for the 12-year term of the BVB was transferred to SPORTFIVE GmbH & agreement were recognised as deferred income Co. KG, Hamburg. The agreement has a term and will be carried through profit or loss on a pro expiring on 30 June 2020 and replaces the origi- rata basis over the term of the agreement. nal agreement (expiring on 30 June 2010) early
113 The minimum lease payments from finance leases are due for payment as follows:
in EUR thousands 30 June 2008 30 June 2007
Up to 1 year 752 656 Over 1 year and up to 5 years 3,076 2,480 Over 5 years 8,536 7,695 12,364 10,831 Future finance charges from finance leases -4,952 -4,513
Present value of liabilities from finance leases 7,412 6,318
The change in the maturity structure of the present values of liabilities from finance leases is as follows:
in EUR thousands 30 June 2008 30 June 2007
Up to 1 year 247 194 Over 1 year and up to 5 years 1,240 2,392 Over 5 years 5,925 3,732 7,412 6,318
114 CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED INCOME STATEMENT
(11) Revenues
in EUR thousands 2007/08 2006/07
Ticketing 22,591 18,262 Sponsorship 33,894 30,549 TV marketing 26,024 21,250 Transfer income 5,398 6,767 Merchandising, catering, licences 17,715 14,379 Other 1,937 5,908 107,559 97,115
(12) Personnel expenses
in EUR thousands 2007/08 2006/07
Wages and salaries 42,923 34,844 Social security contributions 2,432 2,137 45,355 36,981
Average number of employees 304 295
No defined benefit pension entitlements have Payments to the state pension scheme are report- been granted to employees of the BVB Group. ed under social security contributions.
(13) Depreciation and amortisation
in EUR thousands 2007/08 2006/07
Amortisation of intangible assets 6,774 4,974 Depreciation of property, plant and equipment 8,727 8,572 15,501 13,546
Amortisation of intangible assets in the year under This amount relates to the write-down of a player review includes a write-down to the lower fair val- registration to the lower transfer price already ue of € 0 thousand (previous year: € 54 thousand). agreed at the balance sheet date.
115 Borussia Dortmund
(14) Other operating expenses
in EUR thousands 2007/08 2006/07
Match operations 19,488 12,884 Advertising 12,360 10,752 Transfers 1,973 1,967 Media and printing, postage 1,828 1,198 Leasing 2,943 2,073 Administration 4,856 7,132 Other 1,634 622 Other taxes 224 11 45,306 36,639
(15) Net finance costs
in EUR thousands 2007/08 2006/07
Income from investments in associates (see Note (3)) 45 13
Other interest and similar income Interest income from bank balances 166 251 Other interest income 60 0 Interest rate swap: Cash flow hedge, transfer from equity 252 0 Income from the unwinding of financial instruments 457 814 935 1,065
Interest and similar expenses Loans and bank overdrafts -8,751 -8,683 Interest rate swap: Cash flow hedge, transfer from equity 0 -528 Repayment of loan from Morgan Stanley & Co. Int. Ltd. -1,804 0 Expenses from finance leases -534 -384 -11,089 -9,595 -10,109 -8,517
(16) Income taxes and deferred taxes
Income tax liabilities developed as follows:
in TEUR 2007/08 2006/07
Income tax liabilities non-current 3,232 4,232 current 1,712 3,669 4,944 7,901
116 CONSOLIDATED FINANCIAL STATEMENTS
Non-current income tax liabilities relate to trade portion of the amount due for payment in finan- tax resulting from the sale of limited partners' cial year 2008/2009 is reported accordingly under shares in WFS KG to Molsiris in 2002. These lia- current liabilities. bilities are paid in equal annual instalments; the
The deferred tax assets and liabilities reported in the consolidated balance sheet relate to the following items:
30 June 2008 30 June 2007 in EUR thousands Assets Liabilities Assets Liabilities
Recognition and measurement of non-current assets 344 0 156 0 Trade receivables and other assets 0 0 0 1,152 Financial liabilities 0 0 0 782 Tax loss carry-forwards 6,151 0 6,264 0
6,495 0 6,420 1,934
The changes in deferred taxes were as follows:
in EUR thousands 30 June 2008 30 June 2007
At the beginning of the year + deferred tax assets 6,420 3,672 - deferred tax liabilities -1,934 -1,103 Net amount of deferred taxes at the beginning of the year 4,486 2,569
Deferred taxes recognised directly in equity 1,152 -1,152 Tax benefit recognised in the consolidated income statement 857 3,069 Net amount of deferred taxes at the balance sheet date 6,495 4,486
The income tax benefit was made up as follows:
in EUR thousands 2007/08 2006/07
Income taxes for the current period -98 -32 Deferred taxes 857 3,069 759 3,037
The recognition of deferred tax assets in respect The changes in the tax rates implemented in the of tax loss carry-forwards resulted in an increase 2008 corporate taxation reform resulted in a € 469 in the tax expense of € 113 thousand (prior year: thousand tax expense arising from the remea- reduction by € 2,633 thousand). surement of deferred taxes in the financial year.
117 Borussia Dortmund
At the balance sheet date, the BVB Group had no deferred tax assets have been recognised. corporation tax loss carry-forwards amounting to Under current tax law, tax loss carry-forwards may € 136,902 thousand and trade tax loss carry-for- be carried forward for an indefinite period. wards amounting to € 142,635 thousand for which
The expected income tax expense which would theoretically result from applying the weighted average tax rate of 31.6% (previous year: 39.9%) can be reconciled with the actual income tax benefit reported in the consolidated income statement as follows:
in EUR thousands 2007/08 2006/07 Consolidated loss before taxes -4,703 7,078 Theoretical tax rate in % 31.6% 39.9%
Expected income tax expense/income 1,485 -2,824 Effects of changes in tax rates -469 0 Effects from tax additions and subtractions -541 -1,126 Taxes relating to earlier periods -92 38 Effect from supplementary tax balance sheets -57 -156 Use of current tax losses and loss-carryforwards 447 7,100 Tax effects from the application of the equity method -14 5 Tax benefit recognised in the consolidated income statement 759 3,037 Actual tax rate in % 16.1% -42.9%
(17) Consolidated cash flow statement
Cash and cash equivalents reported in the balance sheet are reconciled to cash funds in the consolidated cash flow statement as follows:
in EUR thousands 30 June 2008 30 June 2007
Cash and cash equivalents 7,912 13,905 - cash and cash equivalents pledged 0 -19 Cash funds 7,912 13,886
Interest income was recognised in cash flows have been adjusted accordingly for reasons of from operating activities for the first time in the comparability. 2007/2008 financial year. The prior-year figures have been adjusted accordingly. Cash flows from operating activities in 2007/2008 include cash inflows from the agency licensing The cash flow statement was presented according agreement with SPORTFIVE GmbH & Co. KG, to net profit/loss for the period for the first time Hamburg, in the amount of € 50,000. in the current financial year; prior-year figures
118 CONSOLIDATED FINANCIAL STATEMENTS
OTHER DISCLOSURES
(18) Auditors' fees
in EUR thousands 2007/08 2006/07
Audit of the financial statements 281 365 Other audit-related work 24 0 Tax advice 87 62 Other services 37 198
(19) Other financial obligations
Due after Up to 1 1 to 5 more than 30 June 2008 (in EUR thousands) Total year years 5 years
Rental and lease payments (operating lease) 16,480 1,833 6,726 7,921 Purchase commitments for investments in intangible assets 10,340 10,340 0 0 Marketing fees 148,913 10,304 50,029 88,580 Other obligations 2,042 45 178 1,819
177,775 22,522 56,933 98,320
Due after Up to 1 1 to 5 more than 30 June 2007 (in EUR thousands) Total year years 5 years
Rental and lease payments (operating lease) 17,962 1,871 6,624 9,467 Purchase commitments for investments in intangible assets 4,700 2,600 2,100 0 Marketing fees 24,972 8,324 16,648 0 Other obligations 2,087 45 178 1,864
49,721 12,840 25,550 11,331
The minimum lease payments from operating Dortmund-Brackel and the offices on the expiry leases relate mostly to lease agreements for of the lease agreements in 2017 and 2022 respec- offices, the land at the Dortmund-Brackel train- tively. Rental payments from the non-cancellable ing ground and various motor vehicles. The period of a sublease are expected to amount to Company has an option to purchase the land at € 125 thousand (previous year: € 605 thousand).
119 Borussia Dortmund
(20) Earnings per share
Earnings per share are calculated in accordance prior-year bonus element included in the August with IAS 33 (Earnings per share) by dividing the 2006 capital increase has been taken into account net profit or loss for the period attributable to the in calculating the weighted average number of shareholders by the weighted average number of shares in issue. Since there are no potential ordi- shares in circulation. The earnings per share nary shares, the diluted and undiluted earnings relate only to shares in the parent company. The per share are the same.
2007/08 2006/07
Weighted average number of shares outstanding 61,401,538 58,665,483
Consolidated net profit/loss for the year after taxes (in EUR thousands) -3,944 10,115 Earnings attributable to minority shareholders 74 48 Earnings attributable to BVB Group shareholders -4,018 10,067
Earnings per share EUR -0.07 0.17
(21) Transactions with related parties
The general partner in Borussia Dortmund e.V., Dortmund, in its capacity as the sole share- GmbH & Co. KGaA is Borussia Dortmund holder in Borussia Dortmund Geschäftsführungs- Geschäftsführungs-GmbH. The latter is respon- GmbH. Both Borussia Dortmund Geschäfts- sible for the management and legal representa- führungs-GmbH and Ballspielverein Borussia 09 tion of Borussia Dortmund GmbH & Co. KGaA. e.V., Dortmund, and all their affiliated companies, The power to appoint and remove members of therefore qualify as related parties within the staff thus rests with Ballspielverein Borussia 09 meaning of IAS 24.
Transactions with related parties:
in EUR thousands 2007/08 2006/07
Transactions with BVB 09 e.V. Rental income 13 25 Income from other services 62 47 Interest income 41 0 Expense from costs recharged for youth department -227 0
Transactions with Borussia Dortmund Geschäftsführungs-GmbH Expense from costs recharged -1,214 -1,485
Transactions with Orthomed GmbH Expense from other services -180 -202
120 CONSOLIDATED FINANCIAL STATEMENTS
Outstanding items in respect of related parties:
in EUR thousands 30 June 2008 30 June 2007
Other current and non-current assets Intercompany account with BVB 09 .eV. 1,389 1,394 Orthomed GmbH 1 1
Other current liabilities Intercompany account with Borussia Dortmund Geschäftsführungs-GmbH 252 32
(22) Management
The management received the following remunera- tion in the past financial year:
in EUR thousands 2007/08 2006/07
Dipl.-Kfm. Hans-Joachim Watzke (Chairman) fixed components fixed remuneration 600 400 other remuneration 15 14 variable component bonus 67 232
Dipl.-Kfm. Thomas Treß fixed components fixed remuneration 400 400 other remuneration 26 26 variable component bonus 45 155 1,153 1,227
The remuneration paid to the Company's manage- ment consists exclusively of short-term benefits.
121 Borussia Dortmund
(23) Supervisory Board
The members of the Supervisory Board of the Company, their occupations and further responsibilities in other man- agement bodies are listed below. In the past financial year, the Supervisory Board received remuneration amounting to € 52.5 thousand (previous year: € 52.5 thousand).
Dipl.-Kfm. Harald Heinze Othmar Freiherr Bernd Geske Ruedi Baer Christian Kullmann Gerd Pieper von Diemar
Chairman Deputy Chairman
Occupations
Proprietor and Chairman of the Proprietor and manager Managing partner of Consultant, B + B Head of the manage- Managing Director of Management Board of Othmar von Diemar Bernd Geske Lean Beratungs AG, Watt ment board office and Stadtparfümerie Pieper (Rtd.) of Dortmunder Vermögensverwaltung + Communication, (Switzerland) group communications GmbH, Herne Stadtwerke AG Beratung, Cologne Meerbusch of EVONIK Industries (DSW 21) Aktiengesellschaft, Essen
Other responsibilities
Member of the Member of the Chairman of the Vice Chairman of the Supervisory Board of Supervisory Board of Supervisory Board of Board of Directors of Beauty Alliance e-m-s new media AG, Informium AG, Cologne mobilzone Holding AG, Deutschland GmbH & Dortmund Regensdorf Co. KG, Bielefeld Member of the (Switzerland) Member of the Supervisory Board of Member of the Supervisory Board of 004 Beratungs- und Chairman of the Board Supervisory Board of WV Energie AG, Dienstleistungs-GmbH, Herner Sparkasse, Frankfurt am Main Aschaffenburg of Directors of eyezone Herne AG, Watt (Switzerland) Member of the Substitute member of Supervisory Board of the Supervisory Board Member of the Board of M-Exchange AG, of Arques Industries AG, Directors of Swisshome Frankfurt/Main Starnberg Real Estate AG, Zug (Switzerland)
Chairman of the Board of Directors of Destination Travel AG, Liebefeld (Switzerland)
Chairman of the Board of Directors of B + B Beratungs AG, Watt (Switzerland)
Chairman of the Board of Directors of Bablo Immobilien AG, Niederscherli (Switzerland)
Member of the Board of Directors of Immoplaza AG, Regensdorf (Switzerland)
Chairman of the Board of Directors of AP Fashion AG, Watt (Switzerland)
122 CONSOLIDATED FINANCIAL STATEMENTS
(24) Events after the balance sheet date (26) Corporate Governance
After the reporting date, Borussia Dortmund The management and Supervisory Board of enhanced its professional squad, in terms of both Borussia Dortmund GmbH & Co. KGaA issued the quantity and quality. In July 2008, Lukas Kruse, statement of compliance with the German Felipe Santana, Patrick Owomoyela, Neven Corporate Governance Code required by § 161 of Subotic, Tamas Hajnal, Bajram Sadrijaj and the German Stock Corporation Act (Aktiengesetz) Mohamed Zidan were signed for the new season. in November 2007 and made it permanently avail- Mladen Petric was transferred to Hamburger SV able to shareholders on the BVB website at in exchange for Mohamed Zidan. www.bvb.de.
Coach Jürgen Klopp's team beat Rot-Weiss Essen 3:1 in the DFB Cup in August. Following an away Dortmund, 29 August 2008 win against Bayer 04 Leverkusen and a tie against FC Bayern Munich, Borussia Dortmund was in Borussia Dortmund GmbH & Co. KGaA fourth place in the Bundesliga. Borussia Dortmund Geschäftsführungs-GmbH
(25) Notifiable shareholdings under § 21 of the German Securities Trading Act (Wertpapierhandelsgesetz, "WpHG")
We have been informed of the following notifi- able shareholdings: Hans-Joachim Watzke Thomas Treß 1. Morgan Stanley International Ltd., London Managing Director (Chairman) Managing Director (16.25%) 2. Blue Bay Asset Management (14.99%) 3. Bernd Geske (7.30%) 4. BV. Borussia 09 e.V., Dortmund (7.24%)
Responsibility Statement of the Management
To the best of our knowledge, and in accordance Dortmund, 29 August 2008 with the applicable reporting principles, the con- solidated financial statements give a true and fair Borussia Dortmund GmbH & Co. KGaA view of the assets, liabilities, financial position and Borussia Dortmund Geschäftsführungs-GmbH profit or loss of the Group, and the management report of the Group includes a fair review of the development and performance of the business and the position of the Group, together with a descrip- tion of the principal opportunities and risks associ- ated with the expected development of the Group. Hans-Joachim Watzke Thomas Treß Managing Director (Chairman) Managing Director
123 THE DFB CUP – LOSING THE FINAL, WINNING OVER HEARTS
124 THE DFB CUP
19. April 2008: The team spirit wins: Borussia stands proud and pugnacious infront of the public. 125 THE DFB CUP – LOSING THE FINAL, WINNING OVER HEARTS
They gave their best, brought a vague dream to Munich team triumphantly paraded around life, and were the better team between the 30th Olympic Stadium. and 103rd minutes of the match. But it all ended
in tears. Borussia Dortmund lost the 65th DFB For thirty minutes, Bayern Munich was the supe- Cup 1:2 against the strongly favoured Bayern rior team, no doubt about it. But then BVB got in Munich. It was a close match that ended in BVB's the game. Shortly after Kringe missed a huge heartbreaking defeat in overtime. Although the opportunity in the 41st minute, Lucio came up team did not win the title, it did win over the with a save against Tinga. Kringe kept coming hearts of many in Germany. back, getting blocked by Kahn in the 66th minute, and hitting the side netting in the 68th minute. It “It hurts”, said Sebastian Kehl, shaking his appeared to be all over in the 87th minute when head. All eyes were on the cup, which the Klimowicz – wide open in front of the goal –
FC Bayern took the lead in the eleventh minute: Lucio and van Bommel (r.) cheer, Petric (No. 10) is disappointed.
The 1:1 equaliser – Munich goalie Oliver Kahn (r.) watches the ball go by. Tinga (No. 7) and Valdez (behind Tinga) are ready to cheer.
Shock at an unhappy loss. Not even the words of Germany's Federal President Dr. Horst Köhler offer much consolation.
126 THE DFB CUP
Dortmunders descended on Berlin on the final match weekend, celebrating peacefully at Brandenburg Gate.
A hero's welcome for the losing team: Dede (left pic- ture) and Kringe and Gordon (right) bask in the posi- tive atmosphere.
missed Kringe's pass, but Petric pushed Wörns' Munich goalie Kahn parried. His coach Ottmar header into the goal in stoppage time. It was the Hitzfeld commented: “That could have set us reward for the strong performance. “After back.” Munich counterattacked and was lucky evening it up, victory seemed sure”, said scorer that Podolski's shot didn't miss the goal by much, Petric. With the score at 1:1, goalie Ziegler instead being deflected by Toni, bringing the thought: “There's no stopping us now.” match to 2:1.
The team's fate of triumph or tragedy was sealed by two back-to-back plays. In the 100th minute, Kringe fired a shot from the 18 meter line, but
127 CONSOLIDATED FINANCIAL STATEMENTS Borussia Dortmund
AUDITORS’ REPORT
We have audited the consolidated financial state- Group and expectations of possible misstatements ments – consisting of the balance sheet, income are taken into account in the determination of statement, statement of changes in equity, cash audit procedures. The effectiveness of the internal flow statement and notes – prepared by Borussia accounting control system and the evidence Dortmund GmbH & Co. KGaA, Dortmund supporting the disclosures in the consolidated and the Group management report for the finan- financial statements and the Group management cial year from 1 July 2007 to 30 June 2008. The report are examined primarily on a test basis within preparation of the consolidated financial state- the framework of the audit. The audit includes the ments and Group management report in accor- assessment of the annual financial statements of dance with IFRS as adopted in the EU and the companies included in the consolidated finan- the additional requirements of commercial law to cial statements, the definition of the group of be applied under § 315a (1) of the German consolidated companies, the accounting and con- Commercial Code (Handelsgesetzbuch, “HGB”) solidation principles used and significant estimates as well as the supplementary provisions in the made by the legal representatives, as well as the Articles of Association is the responsibility of the evaluation of the overall presentation of the Company’s legal representatives. Our responsibi - consolidated financial statements and the Group lity is to express an opinion on the consolidated management report. We believe that our audit financial statements and the Group management provides a reasonable basis for our opinion. report, based on our audit. Our audit has not led to any reservations. We conducted our audit of the consolidated finan- cial statements in accordance with § 317 HGB and In our opinion, based on the results of our audit, the generally accepted standards for the audit of the consolidated financial statements comply with financial statements in Germany promulgated by IFRS as adopted in the EU and the additional the German Institute of Chartered Accountants requirements of commercial law to be applied (Institut der Wirtschaftsprüfer, IDW). Those stan- under § 315a (1) HGB as well as the supplemen- dards require that we plan and perform the audit tary provisions in the Articles of Association and such that misstatements materially affecting the give a true and fair view of the net assets, finan- presentation of the net assets, financial position cial position and results of operations of the Group and results of operations in the consolidated finan- in accordance with these requirements. The cial statements in accordance with the relevant Group management report is consistent with the financial reporting standards and in the Group consolidated financial statements, provides as a management report are detected with reasonable whole a suitable view of the Group's position and assurance. Knowledge of the business activities suitably presents the opportunities and risks of and the economic and legal environment of the future development.
Dortmund, 29 August 2008
BDO WESTFALEN-REVISION GmbH Wirtschaftsprüfungsgesellschaft R. Schepers ppa. J. Königshoven Auditor Auditor
128 EDITORIAL INFORMATION / FINANCIAL CALENDAR 2008/2009
EDITORIAL INFORMATION
Published by: Borussia Dortmund GmbH & Co. KGaA Editors Prologue, Rheinlanddamm 207-209, DFB Cup: 44137 Dortmund Boris Rupert Internet: www.borussia-aktie.de E-Mail: [email protected] Photos:
Title: Andreas Wegener. Responsible party: Firo sportphoto, Marcus Knipping Ralf Rottmann, Stefan Reinke, Matthias Graben, Knut Vahlensiek. Communication design/ Copyright by Concept: the photographers K-werk, Uwe Landskron, Agentur für Kommunikation, Printed by: www.K-werk.de Hitzegrad medien – druck GmbH & Co. KG
FINANCIAL CALENDAR 2008/2009
18. November 2008 Quarterly Financial Report for the first quarter of the 2008/2009 financial year
23. November 2008 Members Meeting of BV. Borussia 09 e.V. Dortmund, Dortmund
25. November 2008 Annual General Meeting of Borussia Dortmund GmbH & Co. KGaA for the 2007/2008 financial year, Dortmund
28. Februar 2009 Half-year report for the 2008/2009 financial year
Further information is available online at: http://eng.borussia-aktie.de
129 EPILOGUE
A home-field advantage is extremely impor- 1998, all 18 first league teams survived the tant in K.O. competitions such as the DFB Cup. first round this season. Unlike in Bundesliga matches or the UEFA BVB is looking forward to its home-field Cup group phase, there is no fix for sporting advantage in the second round. Its opponent at “gaffes”. Also in contrast to international the end of September will be Hertha BSC competitions, the DFB Cup does not involve a Berlin. second leg. The make-or-break decision on a With only six of BVB's 31 cup matches played team's advancement in the competition or out in Dortmund between 1990 and 2004, the departure from the field is made in 90 min- Westphalian city's fortunes have turned in the utes, with possible overtime and a penalty draw: In the last nine drawings where the shoot-off. home-field advantage was not automatic – the This means that the draw for each next round “amateurs” are automatically privileged – is vital to the fates of the teams. Particularly Borussia Dortmund was selected eight times at a time when all Bundesliga teams have to play host. rediscovered the economic and athletic signif- The last season proved how short the path to icance of the DFB Cup. For the first time since the final in Berlin is.
Ausgabe 2 24. September 2008 0,50 E SPIELTAG Die letzten Infos vor dem Anpfiff
DFB-POKAL BVB – HERTHA
Borussia 09 Wie Klopp die BVB-Elf wieder auf Kurs bringt
Hertha BSC Drei Asse für Berlins Angriff
DER
Rückblick Endspiel verloren, TRAUM VOM CUP Sympathien gewonnen BORUSSIA WILL ÜBER BERLIN NACH BERLIN
DFB-POKAL: ZAHLEN DATEN FAKTEN
Front cover of BVB's Spieltag match day programme, 24 September 2008.
130 THE DFB CUP
THE DFB CUP – MORE THAN A COMPETITION
131 CONTENTS
KEY FIGURES AT A GLANCE 2 PROLOGUE 3 MANAGEMENT'S GREETING 13 REPORT OF THE SUPERVISORY BOARD 14 GOVERNING BODIES AND CORPORATE STRUCTURE 19 THE BVB SHARE 20 SHARE PRICE PERFORMANCE SHAREHOLDER STRUCTURE 22 SHAREHOLDINGS BY MEMBERS OF GOVERNING BODIES INVESTOR RELATIONS CORPORATE GOVERNANCE REPORT 24 THE DFB CUP – BIRTH OF A BVB LEGEND 34 THE 2007/2008 SEASON 38 THE DFB CUP – EMOTION PURE 40 GROUP MANAGEMENT REPORT BUSINESS AND FRAMEWORK CONDITIONS 44 FINANCIAL YEAR 2007/2008 IN REVIEW DEVELOPMENT OF THE MARKET AND COMPETITIVE ENVIRONMENT IN GERMAN PROFESSIONAL FOOTBALL 46 GROUP STRUCTURE AND BUSINESS 49 ORGANISATION OF MANAGEMENT AND CONTROL 53 INTERNAL MANAGEMENT SYSTEM 56 CORPORATE STRATEGY 57 POSITION OF THE GROUP 59 RESULTS OF OPERATIONS SALES DEVELOPMENT 60 Development of significant operating expenses FINANCIAL CONDITION 64 Analysis of capital structure / Analysis of investments / Analysis of liquidity NET ASSETS 65 OVERALL SUMMARY OF RESULTS OF OPERATIONS, FINANCIAL CONDITION AND NET ASSETS THE DFB CUP – MERCHANDISING LEAVING ITS (TRADE)MARK 66 Tradition • Passion • Success COMPENSATION REPORT 70 RISK REPORT 71 Tradition • Passion • Success RISK MANAGEMENT SPECIFIC RISKS 72 Strategic risks / Personnel risks / Competitive risks / Sales risks / Financial risks / Risks jeopardising performance and continued existence THE RISK SITUATION IN SUMMARY 74 REPORT ON EXPECTED DEVELOPMENTS 75 ANTICIPATED DEVELOPMENT OF THE COMPANY EXPECTED GENERAL ECONOMIC ENVIRONMENT RESULTS OF OPERATIONS Anticipated earnings development / Anticipated development of revenues Anticipated development of significant operating expenses / Expected dividends EXPECTED FINANCIAL CONDITION 76 Financial planning / Capital expenditure planning / Anticipated development of liquidity OPPORTUNITIES 77 DEVELOPMENT FORECAST IN SUMMARY THE DFB CUP – SPONSOR ADVERTISING 78 REPORT ON POST BALANCE SHEET DATE EVENTS 82 OTHER DISCLOSURES 83 THE DFB CUP – AN EYE ON DORTMUND… 86 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET 92 CONSOLIDATED INCOME STATEMENT 93 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 94 STATEMENT OF CHANGES IN NON-CURRENT ASSETS CONSOLIDATED CASH FLOW STATEMENT 96 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 97 BASIC PRINCIPLES NOTES TO THE CONSOLIDATED BALANCE SHEET 106 NOTES TO THE CONSOLIDATED INCOME STATEMENT 115 OTHER DISCLOSURES 119 THE DFB CUP – WINNING OVER HEARTS 124 AUDITORS’ REPORT 128 EDITORIAL INFORMATION / FINANCIAL CALENDAR 129 EPILOGUE 130 Business Report Borussia Dortmund, July 2007 - June 2008 2007 - June Dortmund, July Business Report Borussia
Business Report Borussia Dortmund, July 2007 – June 2008