Kinepolis Group

Transcription

Kinepolis Group

Kinepolis Group
Kinepolis: a unique experience thanks
to 1 880 enthusiastic staff members
Annual Report 2009
Kinepolis Group Annual Report 2009
WWW.KINEPOLIS.COM
09
Ratio’s en kerncijfers
Key figures (in € ’000)
Consolidated income statement
Ratios
2004
2005
2006
2007
2008
2009
Revenue
200 608
192 812
211 191
212 324
216 877
231 226
EBITDA (1)
46 030
42 660
48 720
49 579
52 588
57 627
52 651
REBITDA
PROFITABILITY RATIOS
2004
2005
2006
2007
2008
2009
EBITDA / Revenue
22,9%
22,1%
23,1%
23,4%
24,2%
24,9%
Gross profit / Revenue
22,8%
21,5%
23,5%
23,4%
24,6%
25,6%
58 072
Operating profit (3) / Revenue
12,9%
10,8%
12,6%
11,8%
13,2%
13,8%
Profit for the period / Revenue
5,6%
4,2%
6,9%
6,9%
7,0%
9,6%
FINANCIAL STRUCTURE RATIOS
2004
2005
2006
2007
2008
2009
Gross profit (2)
45 789
41 387
49 608
49 687
53 346
59 218
Operating profit (3)
25 790
20 728
26 507
25 146
28 718
31 822
Financial calendar 2010-2011
Tuesday
18 May 2010
Net finance expense
-7 961
-7 365
-6 693
-6 890
-8 390
-2 305
Profit before tax
17 829
13 364
19 814
18 256
20 328
29 517
Net financial debt (4)
156 659
149 657
136 570
138 868
129 248
89 364
Profit for the period
11 266
8 105
14 635
14 726
15 186
22 177
Net financial debt / Equity (5)
171,8%
155,9%
126,4%
122,3%
110,2%
67,4%
15 225
20 421
Equity / Balance sheet total
25,2%
26,2%
30,8%
31,2%
33,3%
38,6%
Thursday
Current Ratio (6)
48,5%
49,3%
42,2%
55,3%
61,2%
48,8%
26 August 2010
8,7%
7,0%
9,0%
8,3%
9,6%
12,0%
Current profit
Annual growth percentages
2004
2005
2006
2007
2008
2009
Revenue
-3,9%
9,5%
0,5%
2,1%
6,6%
EBITDA
-7,3%
14,2%
1,8%
6,1%
9,6%
Friday
ROCE
(7)
21 May 2010
Tuesday
REBITDA
10,3%
Gross profit
-9,6%
19,9%
0,2%
7,4%
-19,6%
27,9%
-5,1%
14,2%
10,8%
-28,1%
80,6%
0,6%
3,1%
46,0%
Operating profit
Current profit
25%
160%
24%
135%
23%
110%
Thursday
24 February 2011
11,0%
34,1%
Tuesday
22%
2004
2005
2006
2007
2008
2009
309 715
307 150
301 491
310 247
299 349
288 153
51 578
58 885
49 283
53 637
53 035
55 384
17 May 2011
85%
21%
Consolidated balance sheet
16 November 2010
60%
2005
2006
2007
2008
2009
2005
EBITDA / Revenue
Non-current assets
Current assets
361 293
366 036
350 774
363 884
352 383
343 537
Equity, including minority interests
TOTAL ASSETS
91 175
96 014
108 059
113 554
117 306
132 540
Provisions (current and non-current) and deferred tax liabilities
18 499
17 889
17 229
17 524
17 272
17 676
Interest bearing loans and borrowings (non-current)
149 831
135 183
119 656
139 231
130 000
86 000
Interest bearing loans and borrowings (current) and bank overdrafts
30 801
41 829
31 486
15 877
16 536
23 696
Trade and other payables (current and non-current)
64 488
68 463
68 233
71 023
64 894
76 131
6 499
6 657
6 109
6 675
6 375
7 494
Other
TOTAL EQUITY AND LIABILITIES
361 293
366 036
(1) EBITDA: Operating profit + depreciations + amortisations + impairments + provisions
(2) Gross profit: Revenue – Cost of acquisitions
(3) Operating profit: Gross profit – distribution expenses – administrative expenses +/– other operating income and charges
350 774
363 884
352 383
343 537
2006
2007
2008
2009
Net Financial Debt / Equity
13%
70%
11%
60%
9%
50%
7%
40%
5%
2006
2007
2008
2009
ROCE
(3) Operating profit: Gross profit – distribution expenses – administrative expenses +/– other operating
income and charges
(4) Net financial debt: Financial debt after deduction of cash and cash equivalents
(5) Equity, including non-controlling interests
20 May 2011
General Meeting
of Kinepolis Group nv
Publication
of H1 2010 result and
press and analyst meeting
Publication
of Q3 2010
business update
Publication
of 2010 result and
Publication
of Q1 2011
business update
General Meeting
Please see the Investor Relations section (page 51)
for an overview of all group figures
30%
2005
Friday
Publication
of Q1 2010
business update
2005
2006
2007
2008
2009
Current Ratio
(6) Current ratio: Current assets / Current liabilities
(7) ROCE: EBIT / (average non-current assets – average deferred tax assets + average assets held for sale +
average trace receivables + average inventory – average trade payables)
Ratios
2004
2005
2006
2007
2008
2009
Revenue
200 608
192 812
211 191
212 324
216 877
231 226
EBITDA (1)
46 030
42 660
48 720
49 579
52 588
57 627
52 651
REBITDA
2004
2005
2006
2007
2008
2009
EBITDA / Revenue
22,9%
22,1%
23,1%
23,4%
24,2%
24,9%
22,8%
21,5%
23,5%
23,4%
24,6%
25,6%
58 072
12,9%
10,8%
12,6%
11,8%
13,2%
13,8%
5,6%
4,2%
6,9%
6,9%
7,0%
9,6%
2004
2005
2006
2007
2008
2009
Gross profit (2)
45 789
41 387
49 608
49 687
53 346
59 218
25 790
20 728
26 507
25 146
28 718
31 822
Tuesday
18 May 2010
Net finance expense
-7 961
-7 365
-6 693
-6 890
-8 390
-2 305
Profit before tax
17 829
13 364
19 814
18 256
20 328
29 517
156 659
149 657
136 570
138 868
129 248
89 364
11 266
8 105
14 635
14 726
15 186
22 177
171,8%
155,9%
126,4%
122,3%
110,2%
67,4%
15 225
20 421
25,2%
26,2%
30,8%
31,2%
33,3%
38,6%
Thursday
Current Ratio (6)
48,5%
49,3%
42,2%
55,3%
61,2%
48,8%
26 August 2010
8,7%
7,0%
9,0%
8,3%
9,6%
12,0%
Current profit
2004
2005
2006
2007
2008
2009
Revenue
-3,9%
9,5%
0,5%
2,1%
6,6%
EBITDA
-7,3%
14,2%
1,8%
6,1%
9,6%
Friday
ROCE
(7)
21 May 2010
Tuesday
REBITDA
10,3%
Gross profit
-9,6%
19,9%
0,2%
7,4%
-19,6%
27,9%
-5,1%
14,2%
10,8%
-28,1%
80,6%
0,6%
3,1%
46,0%
Operating profit
Current profit
25%
160%
24%
135%
23%
110%
Thursday
24 February 2011
11,0%
34,1%
Tuesday
22%
2004
2005
2006
2007
2008
2009
309 715
307 150
301 491
310 247
299 349
288 153
51 578
58 885
49 283
53 637
53 035
55 384
17 May 2011
85%
21%
16 November 2010
60%
2005
2006
2007
2008
2009
2005
EBITDA / Revenue
Non-current assets
Current assets
361 293
366 036
350 774
363 884
352 383
343 537
TOTAL ASSETS
91 175
96 014
108 059
113 554
117 306
132 540
18 499
17 889
17 229
17 524
17 272
17 676
149 831
135 183
119 656
139 231
130 000
86 000
30 801
41 829
31 486
15 877
16 536
23 696
64 488
68 463
68 233
71 023
64 894
76 131
6 499
6 657
6 109
6 675
6 375
7 494
Other
361 293
366 036
350 774
363 884
352 383
343 537
2006
2007
2008
2009
13%
70%
11%
60%
9%
50%
7%
40%
5%
2006
2007
2008
2009
ROCE
income and charges
20 May 2011
General Meeting
Publication
Publication
of Q3 2010
business update
Publication
of 2010 result and
Publication
of Q1 2011
business update
General Meeting
30%
2005
Friday
Publication
of Q1 2010
business update
2005
2006
2007
2008
2009
Current Ratio
Kinepolis Group
Annual Report 2009
WWW.KINEPOLIS.COM
09
Summary
01 Kinepolis at a glance
3
02 Kinepolis, the financial year 2009
Letter to shareholders
Key events in 2009
Management report
5
5
8
9
03 Kinepolis, corporate profile
Mission statement
Strategic highlights
Organisational structure
Innovation and customer experience
Human Resources
Sustainable enterprise
21
21
22
23
23
27
28
04 Kinepolis, core businesses
Box office
In theater sales (ITS)
Business to business (B2B)
Movie distribution
Real Estate
31
31
32
33
34
35
05 Kinepolis, Corporate Governance
Corporate Governance
Board of Directors and Special Committees
Executive Management
Insider Trading Policy
Remuneration Report
Description of the main characteristics of
the internal audit and risk control system
Compliance with the Corporate Governance Code
39
39
39
43
43
44
06 Information for the shareholders
51
07 Financial statements
Consolidated statement of realized and unrealized gains
Consolidated Cash flow statement
Consolidated statement of changes in equity
Notes to the consolidated financial statements
Extract from the unconsolidated financial statements
of Kinepolis Group nv, drawn up under Belgian
accounting principles
Organizational structure
59
59
61
62
64
66
68
49
49
120
123
Inhoudstafel annual report 2009
1
2
kinepolis group
01
Kinepolis Group is a source of relaxation and contemporary
entertainment for all age groups through its network of
movie theatres.
Kinepolis at a glance
KINEPOLIS IN EUROPe
COUNTRY
MULTIPLEXES
SCREENS
EMPLOYEES (1)
11
138
606 (2)
France
7
87
402
Spain
3
64
320
Switzerland
1
8
46
Belgium
The Kinepolis concept is characterised by constant innovation and focus on customers. In terms of technology, in
past years this has resulted in the digitisation of the motion
Poland
TOTAL
(3)
1
20
1
23
317
1 375 (4)
(1) average number of employee contracts in 2009,
exclusive of temporary workers
(2) including employees at headquarters
(3) operated by the ITIT group
(4) including temporary workers: 1 880 staff members
picture medium and the development of 3D cinema. In
terms of content, Kinepolis now programmes an original
mix of traditional movies and sports, cultural and social
events.
Since its formation in 1997 and initial public offering in 1998,
Kinepolis has grown into market leader in Belgium and
trendsetter in Europe.
Kinepolis runs 23 multiplex cinemas in Belgium, France,
Spain, Poland and Switzerland. Kinepolis employs 1 375
people and welcomed 22 million customers in 2009.
Revenue in 2009 was € 231.2 million.
Kinepolis at a glance annual report 2009
3
4
kinepolis group
02
Kinepolis, the financial year 2009
Letter to shareholders
Dear shareholder,
2009 was an extraordinary year for Kinepolis in more than
one way. The continuing crisis and the economic uncertainties that plagued numerous companies left Kinepolis too
facing some specific challenges. With a revenue increase
of almost 7%, recurring profit 34% higher than in 2008
and a debt ratio at its lowest level ever (€ 89.4 million at
31 December 2009), Kinepolis can look back on 2009 with
satisfaction. Both the consumer market and the business to
business segment more than held up in 2009, despite the
impact of the economic stagnation on screen advertising.
The strategic turnaround Kinepolis pushed through two
years ago is paying dividends. Our strategic objectives to be
the best cinema operator, the best marketer and the best
property manager get across and we wish to perpetuate
them in the future.
The new way of working together and the smoother
exchange of internal experience enabled Kinepolis to
streamline its operating processes, which optimised
daily management in all multiplexes and in the various
operational segments. Accordingly, the improvement in our
results is to a large degree due to the measures introduced
in recent years, which were rolled out by our employees
with great enthusiasm and dedication. We would like to
warmly thank the entire Kinepolis team for their efforts.
the financial year 2009 annual report 2009
5
Eddy Duquenne, Philip Ghekiere and Joost Bert
If we are to strengthen relations with our 22 million visitors,
their satisfaction is crucial. For the near future, the main
goal is to get to know our customers better and respond
to their needs and expectations in targeted ways. 2010 will
be the year in which we listen to our customers even more
than we have done in the past, to tailor the Kinepolis offering to the demands of the market to an even higher degree.
That goes for movies and alternative programming as well
as the full customer experience, in which the look and feel
of our multiplexes, the customer-oriented welcome, the
food range and the general experience of our visitors are
decisive.
6
kinepolis group
Thanks to our efforts in property management, the valuation of our sites and buildings has been increased and
improved.
Now the strategic decisions taken in the past have started
to pay dividends, Kinepolis wishes to continue along the
same path. In the current economic circumstances 2010 will
be a year of special challenges. We will continue to invest at
a considered pace in the remodelling of our multiplexes, in
digital, 3D and event technology, and in creating a unique
customer experience. Kinepolis is a pioneer in all these
areas and we will with great enthusiasm continue to live up
to that reputation in 2010. It is our task to protect and nurture
that positive development.
Kinepolis would like to highlight the positive relations with all
our stakeholders at the end of fiscal 2009. We owe our good
performance in 2009 also to our employees, movie buffs,
customers, suppliers and all other partners. We wish to share
the success of our group with our shareholders, which is why
we propose raising the dividend for 2009 by 39%. Above all,
we would like to thank everyone for the confidence placed in
Kinepolis this past year.
Joost Bert
Chief Executive Officer
Eddy Duquenne
Chief Executive Officer
Philip Ghekiere
Chairman of the Board of Directors
7
Belangrijke gebeurtenissen 2009
15 May 2009: The General Meeting decided to pay out a
gross dividend of €0.66 per share to shareholders.
June 2009: Eddy Duquenne became a member of the
Commission de Réflexion of the French cinema
federation FNCF. With this move, Kinepolis hopes to
contribute to the development of the cinema market in
France.
July 2009: Kinepolis sold its shareholding in CinemaxX
AG. The transaction generated a profit for Kinepolis in
fiscal 2009 equal to the sale price (€3 million).
September 2009: Philippe Halhoute was appointed
vice-country manager of Kinepolis France
April 2009: Kinepolis forwent the 50% option in
Imagimons (Mons, Belgium), bringing time-consuming
and expensive legal proceedings to an end.
October 2009: Kinepolis decided to scrap the Médiacité
cinema project in Liege, as a consequence of persistent
proceedings based on points of competition law.
1 May 2009: Henk Rogiers was appointed CFO.
4 May 2009: The Court of Appeal rejected the demand
of the French multiplex chain UGC to suspend the
decision of the Belgian Competition Authority of 1
October 2008(1). The Authority’s decision therefore
remained in place until a judgement on the merits on
11 March 2010(2) on the UGC’s demand to have the
decision annulled.
May 2009: Professor Marion Debruyne (Marion
Debruyne bvba), Associate Professor and Partner at the
Competentiecentrum Marketing of the Vlerick Leuven
Gent Management School and Mr Rafaël Decaluwé
(Gobes Comm.V.), former CEO of Bekaert, were
appointed independent directors.
8
kinepolis group
November 2009: Carl Lenaerts was appointed
vice-country manager Kinepolis Belgium.
26 November 2009: Kinepolis issued a Commercial
Paper with a programme scale of € 50 million, intended
for short-term financing. The financing is supported by
the syndicated credit, represents a diversification of the
sources of finance drawn on by Kinepolis and lowers the
interest costs.
(1) According to the Authority’s decision of 1 October 2008 the Authority’s prior permission
was no longer needed for the expansion, renovation or replacement of an existing
Kinepolis multiplex by another cinema and the construction or acquisition (but not
replacement) of an additional cinema in Belgium did have to been formally reported
until 1 October 2011.
(2) See ‘Report of the Board of Directors / important events after the end of the fiscal year’ for
more details.
Management report
In 2009 Kinepolis Group generated € 231.2 million in
revenues, 6.6% more than the preceding year. This
resulted in a rise in recurring (1) EBITDA (2) of 10.3% to
€ 58.1 million. The non-recurring profit rose by 34%
to € 20.4 million. The group reported a free cash
flow (3) of € 39.9 million (+316%). At 31 December 2009
the net financial debt was € 89.4 million.
Box office income (income from ticket sales) rose by 8% in
2009. Kinepolis Group welcomed 22.0 million paying customers in 2009, 0.5% more than in 2008. Good visitor figures
were posted in all countries, thanks to the strong movie
offering, especially in the summer and the second half of
the year. In spite of the tough economic conditions, growth
was achieved in France and Spain. Belgium experienced a
limited fall. The success of Flemish movie Loft (2008) was
not equalled in 2009.
Revenues
(1) After elimination of non-recurring transactions.
(2) EBITDA is not a recognised IFRS term. Kinepolis has defined the concept by adding
depreciations, amortisations, impairments and provisions to the operating profit, and
subtracting any reversals or uses of the same items.
(3) Kinepolis Group defines the free cash flow as the cash flow generated from operating
profits less the investments in intangible assets and property, plant and equipment
and investment property, paid interest charges, purchase of own shares and dividend
payments, including the sales of property, plant and equipment and other financial assets.
The revenues of € 231.2 million were almost
7% higher than in 2008 and break down as
follows: Belgium 52%, France 27%, Spain 19% and
Switzerland/Poland 2%.
Revenues by country
Revenues by activity
Movie distribution
1%
Switzerland/
Poland 2%
B2B
14%
Spain
19%
Real estate
4%
Belgium
52%
In theatre
sales 21%
Box office
60%
France
27%
9
Visitors (in millions)
Visitors
Belgium
France
Spain
Switzerland
Total
Number of multiplexes (1)
11
7
3
1
22
2009
9.5
7.2
5.1
0.2
22.0
2008
% change
9.7
7.0
5.0
0.2
21.9
-1.4%
2.3%
1.8%
-2.2%
0.5%
(1) exclusive of Cinema City Poznan, operated by the ITIT group
In theatre sales (ITS, income from the sale of drinks, snacks
and retail in the cinema) rose by 5% compared with 2008.
Thanks to the success of the new self-service shop (Mega
Candy), which offers cinemagoers a broader range and
greater convenience, ITS revenues per visitor continued to
rise (especially in Belgium), in spite of the economic crisis.
Business to business revenues (B2B) performed better, rising
3% compared with 2008. Events such as conferences and
corporate parties performed well (+8%). Screen advertising
on the other hand was affected by the economic crisis
(-13%).
In 2009 the turnover of Kinepolis Film Distribution (KFD)
rose to € 3.5 million. De Helaasheid der Dingen by Felix
van Groeningen, Dossier K. by Jan Verheyen and the
Studio 100 productions Het Geheim van Mega Mindy
and Plop en de Kabouterbaby were the highlights. The
distribution of non-Flemish movies such as the musical
Fame, the teenage comedy 17 Again and the lowbudget horror Paranormal Activity was also a success.
Lastly, property income experienced positive growth
thanks to efforts to drive up occupancy of business
spaces and various campaigns to valorise property
potential.
Recurring EBITDA (REBITDA)
In 2009 recurring EBITDA was € 58.1 million, a rise of
10% compared with 2008 (€ 52.7 million). This can be
explained on the one hand by the favourable turnover
growth, steps to increase the margin (product mix,
Mega Candy investments, B2B) and cost controls.
Efficiency improvements compensated for the effect of
inflation adjustments on payroll costs.
10 kinepolis group
Profit for 2009 was € 22.2 million, compared with
€ 15.2 million in 2008, a rise of 46%. After elimination
of non-recurring transactions, the recurring profit for
2009 (€ 20.4 million) was still significantly better that the
recurring profit for 2008 (€ 15.2 million). This is mainly
attributable to a rise in the operating profit and a
decrease in the financial costs.
The non-recurring items were: € 3 million generated on
the sale of the participation in CinemaxX, a provision
for uncollectable invoices of € -1.7 million (Screenvision),
costs of restructuring of € -1.2 million, the withdrawal of
service of not fully depreciated equipment of € -0.5 million, the write-down on the halted Mediacité multiplex
project in Liege of € -0.5 million, the rectification of VAT
provisions of € 1.5 million and taxes of € 1.1 million.
Current cash flow and net financial debt
The current cash flow was € 39.9 million in 2009 compared with € 9.6 million in 2008. This strong cash flow
generation was the consequence of the growth in profit,
the decrease in paid interest charges and the improved
management of the working capital. There were also
some one-off items, including € 3.0 million generated on
the sale of CinemaxX and one-off improvements in the
working capital (€ 12.0 million).
The trade payables rose as a consequence of the timing
of a number of investments and the management of
the payment terms. The other payables rose among
other things due to received advances from real estate
projects, increase in activities, higher movie distribution
royalties, prepaid sales and capital subsidies in France.
In 2009 an € 18.8 million investment was made in new
property, plant and machinery, a rise of € 4.6 million
compared with the previous year (€ 14.2 million).
The conservative financial policy was continued,
oriented to a further strengthening of the balance sheet
by reducing debt. The net financial debt of Kinepolis
fell by 30% from € 129.2 million at the end of 2008 to
€ 89.4 million at 31 December 2009. The NFD/EBITDA
ratio of 1.6 was accordingly at its lowest ever level.
Kinepolis has access to a syndicated loan that runs until
2014. In 2009 Kinepolis took up € 30 million less than
in 2008. Futhermore, at the end of 2009 a first tranche
of € 9.5 million of the Commercial Paper programme
(launched in the autumn of 2009) was issued. This
programme was launched with a view to the further
optimisation of the financial costs and diversification of
the sources of finance.
the financial year 2009 annual report 2009 11
Since 2008, to hedge the interest risk Kinepolis mainly
uses derivative financial instruments for which the
movement in fair value runs directly over equity and so
has no impact on the profit for the fiscal year (cash flow
hedge accounting). In 2009 the impact on equity was € 0.1
million compared with € -3.3 million in 2008, due to the
strong fall in the interest rate.
Balance sheet
Property, plant and equipment (including those available
for sale) of € 298.1 million accounted for 87% of the
balance sheet total at 31 December 2009. This includes
land and buildings (including those available for sale
and property investment) with a carrying value of € 219.5
million.
At 31 December 2009 equity was € 132.5 million or 38.6%
of the balance sheet total, a 5.4% improvement compared
with solvency at the end of 2008.
Line-up
2010, which began with Avatar, is expected to be a strong
movie year with various major sequels, including Toy Story
3, Shrek 4, Harry Potter and the Deathly Hallows (Part 1), The
Twilight Saga: Eclipse, The Chronicles of Narnia: The Voyage
of the Dawn Treader and Step Up 3. Other international
highlights are Alice in Wonderland, Inception and Prince of
Persia. The movie year is characterised by major 3D movies, such as Toy Story 3, Shrek 4, Step Up 3, Harry Potter and
the Deathly Hallows (Part 1) and Alice in Wonderland.
Many local movies are also scheduled for release in 2010,
including Zot van A (Belgium), L’Arnacoeur (France) and
Torrente 4 (Spain).
In 2010 Kinepolis launched many new initiatives in the
domain of sport, music, TV series and documentaries.
The UEFA football presentations in Belgium in association
with EXQI Sport (Alfacam) provided a taste of sporting
things to come.
12 kinepolis group
Key events after the end of the fiscal year
Screenvision Belgium nv
Kinepolis is deliberating whether to acquire Screenvision
Belgium. The conditions required for this acquisition are
not yet met. Kinepolis remains committed to keeping the
Belgian cinema advertising market united, which is in the
interests of all stakeholders.
Court of Appeal annuls Belgian Competition Authority’s
decision of 1 October 2008 and arrives at its own
judgement
The Court of Appeal annulled in the ruling of 11 March
2010 the decision of the Belgian Competition Authority of
1 October 2008(1) and then arrives at the same judgement
as the Authority, except that the conditions imposed
on Kinepolis in 1997 will not automatically expire on the
end date (1 October 2011), but rather will be automatically
renewed unless a decision to the contrary of the Belgian
Competition Authority in response to a request by
Kinepolis.
Capital
Authorised capital at 31 December 2009 was
€ 48 962 557.15, represented by 6 930 778 shares without
nominal value, all of which give the same rights to
holders.
The authority of the Board of Directors to increase the
authorised capital in one or more instalments by up
to € 48 883 132.15 was renewed by the Extraordinary
General Meeting of 18 May 2007 for a term of 5 years,
ending on 7 June 2012. The authority to increase the
authorised capital after the announcement of a public
acquisition bid was also renewed by the Extraordinary
General Meeting of 18 May 2007 for a term of three years,
commencing on the date of the publication of the deed
of amendment to the articles of association and ending
on 17 May 2010.
Shareholder structure at 31 March 2010 (2)
Shareholder
Research and development
Kinepolis does not conduct any research and development.
(1) According to the Authority’s decision of 1 October 2008 the Authority’s prior permission
was no longer needed for the expansion, renovation or replacement of an existing
Kinepolis multiplex by another cinema and the construction or acquisition (but not
replacement) of an additional cinema in Belgium did have to been formally reported
until 1 October 2011.
(2) As resulting from the transparency declarations.
Kinohold BIS and Mr Joost Bert
Number
of shares
%
2 475 888
35.72
Kinepolis Group n.v.
277 231
4.00
Free Float of which:
4 177 659
60.28
- Axa SA
658 179
9.50
- Axa Investment Managers
310 501
4.48
- Petercam sa + Petercam Mgt. Services sa
353 519
5.10
- Bestinver Gestion
319 108
4.60
- Quaeroq CVBA
TOTAL
210 000
3.03
6 930 778
100
Statements under Belgium’s acquisitions
legislation
Relevant information
Share buybacks
In 2009 a total number of 66 113 shares were purchased for
a total price of € 997 613 in application of the discretionary
power granted by the Board of Directors to Bank Degroof
under the conditions of transitional stipulation # 2 of the
articles of association to cover the options to be issued
under the 2007-2016 Share Option Plan as approved by the
Board of Directors on 5 November 2007. No shares were
sold.
At 31 December 2009 Kinepolis Group nv held a total of
277 231 of its own shares, representing 4% of the total
number of shares and with a capital value of € 1 958 501.
14 kinepolis group
Rights to nominate candidates for a seat
on the Board of Directors
The articles of association state that eight directors are
to be appointed from the candidates nominated by
Kinohold Bis, a limited liability company governed by the
law of Luxembourg. This rule applies insofar as Kinohold
Bis or its successors, as well as all entities directly or
indirectly controlled by any of them or any of their
successors (in the sense of Article 11 of the Companies
Code) holds, individually or collectively, no less than 35%
of the company’s shares at the time of nomination or
appointment by the General Meeting. If Kinohold Bis or
its successors, as well as all entities directly or indirectly
controlled by any of them or any of their successors (in
the sense of Article 11 of the Companies Code) represents less that 35% of the company’s capital, Kinohold
Bis or its successors shall only be entitled to nominate
candidates for a seat on the Board of Directors for each
tranche of shares representing 5% of the company’s
capital.
If the above condition with regard to shareholding is
met, the General Meeting must appoint candidates to
the corresponding number of seats on the Board of
Directors that are on the list of candidates nominated
by Kinohold Bis sa, in accordance with the above
stipulations.
Shareholder agreements
The company is not aware of any shareholder agreements that could restrict the transfer of securities or
the exercise of voting rights in the context of a public
acquisition bid.
Change of control
Pursuant to the Term and Revolving Facilities
Agreement concluded by Kinepolis Group nv and a
syndicate of financial institutions on 26 November
2004 and amended on 10 February 2006 and 13 July
2007 a participating financial institution may end its
participation in this agreement, if natural or corporate
persons other than Kinohold Bis and Stichting
Administratiekantoor Kinohold acquire control of
Kinepolis Group nv. In this event, the corresponding
part of the loan is immediately due and payable.
Received statements
Pursuant to Article 74 of the Public Acquisitions Bids Act
of 1 April 2007, on 26 August 2009 Kinepolis Group nv
received statements from the following persons acting
by mutual agreement (either because they are ‘affiliated
persons’ in the sense of Article 11 of the Companies
Code or they otherwise act in mutual agreement)
and collectively holding more than 30% of the voting
shares
of Kinepolis Group nv: Kinepolis Group nv, Kinohold
Bis sa, Stichting Administratiekantoor Kinohold, MarieSuzanne Bert-Vereecke, Joost Bert, Koenraad Bert,
Geert Bert and Peter Bert.
According to these statements:
Kinohold Bis sa held 2 434 288 shares or 35.12% of
the shares of the company compared with 34.41%
at 1 September 2008. Kinohold Bis sa is controlled
by Stichting Administratiekantoor Kinohold under
Dutch law, which in turn is jointly controlled by the
following natural persons (in their capacity as
directors of Stichting Administratiekantoor):
Marie-Suzanne Bert-Vereecke, Joost Bert, Koenraad
Bert, Geert Bert and Peter Bert. Kinohold Bis sa also
acts in mutual agreement with Joost Bert.
Conflict of interests policy
Kinepolis Group nv, controlled by Kinohold Bis sa, held
277 231 or 4% of the shares of the company compared
with 0.45% at 1 September 2008.
There were no changes to the shareholding of Joost Bert,
who acts in mutual agreement with Kinohold Bis sa. He
retains 41 600 shares or 0.6% of the shares of the company.
The Board of Directors took two decisions on 18 February
2009 pursuant to Article 523 of the Companies Code of
Belgium.
These decisions relate to the following:
The award to executive management of the variable
part of the remuneration of € 200 000 per year,
considering the fulfilment in fiscal 2008 of the
quantitative and qualitative management targets as set
by the Board of Directors.
The establishment of the maximum variable
remuneration for the members of executive
management for fiscal 2009 of € 400 000, up to
€ 280 000 of which was awarded on the basis of
quantitative targets and € 120 000 on the basis of
qualitative targets. An outperformance bonus pool of
€ 70 000 may also be allocated for performance above
the quantitative management targets.
The relevant excerpt from the minutes was included in
the report of the board of directors on the unconsolidated
financial statements.
The Board of Directors decided on 31 March 2010 to apply
Article 523 of the Belgian Company Code to increase the
outperformance bonus pool for 2009 to € 230 209 because
performance was substantially above the quantitative
management targets.
16 kinepolis group
A number of risks and uncertainties relevant to the
company are described in brief below.
Market risks and financial instruments
As a multinational, Kinepolis is exposed to various
types of financial risk, including exchange rate risk and
interest rate risk.
Kinepolis endeavours to minimise the negative impact
on financial profit by using financial instruments
to hedge risks as part of a global risk management
strategy.
Application of the Act of 17 December 2008 for the
establishment of an Audit Committee
The composition of the Audit Committee complies with the
obligations included in the Act.
Pursuant to Article 526bis of the Companies Code the Audit
Committee is composed of two independent members of
the Board of Directors with the appropriate expertise and
professional experience in accounting and auditing bearing
in mind their previous and/or current business activities.
Kinepolis manages its debts by combining short-,
medium- and long-term borrowings. The mix of debts
with fixed and floating interest is established at group
level. At the end of December 2009 he group’s net
financial debt was € 89.4 million. Kinepolis has concluded interest swaps and interest options to manage
the risk of interest fluctuations. These interest hedges
totalled € 105.0 million on 31 December 2009.
The Audit Committee is composed as follows:
Mr. Geert Vanderstappen
Mr. Rafaël Decaluwé
Principal risks and uncertainties
The company took appropriate steps to ensure the most
efficient control of risks without being able to provide
certainty that these steps will control these risks in full in all
circumstances.
Operating risks
The business environment in which the company operates
is characterised by uncertain factors such as the quality
and local character of the movie offering, the individual
cultural character of cinema visits, the trends in the media
and entertainment sector, and the weather in the various
countries. Kinepolis has no direct impact on these factors,
but does manage their consequences through operational
efficiency and flexibility in terms of staffing and mix of
activities among other things.
Various risks
In addition to the traditional risks facing all companies
and in the context of full transparency, the company
wishes to state that with regard to the cancelled urban
development permit on 30 September 2008 for the
Kinepolis multiplex in Ostend, Ostend municipality is
working with due speed on the draft of a municipal
spatial execution plan (GRUP) and an environmental
impact report for the area in question, after which
a new urban development permit may be issued to
normalise the existing situation of Kinepolis Ostend.
Kinepolis also has complete confidence in the favourable outcome of the civil restoration claim brought
before the court of first instance in Bruges by an owners’ association of a neighbouring apartment block.
Lastly, the company has taken note of the planned
development and repurposing of the Heysel plateau
by the municipality of Brussels.
Profit appropriation and dividend
In its proposal to the General Meeting concerning the
appropriation of profit and payment of dividend the
Board of Directors took various factors into consideration, including the company’s financial situation,
operating profits, current and expected cash flows and
expansion plans.
Based on a payout ratio of 30% calculated on recurring
profit as from fiscal 2009, it is proposed to pay out
a gross dividend of € 0.92 per share for fiscal 2009.
Subject to the approval of the General Meeting, the
Board of Directors has decided to make the dividend
18 kinepolis group
available to shareholders through a financial institution
of their choosing on 2 June 2010 upon presentation of
coupon 10.
Unconsolidated annual financial statements
From the unconsolidated annual
financial statements:
Profit from fiscal year for appropriation
€ -2 343 738.99
Profit carrying forward from previous fiscal year
€ 16 629 239.63
Addition to equity:
- To the legal reserve
€ 0.00
- To other reserves
The full version of the unconsolidated annual financial
statements as well as additional reports can be read at
www.kinepolis.com and be requested from [email protected] free of charge.
€ 997 613.05
Profit to be carried forward
€ 7 166 624.35
Dividend
€ 6 121 263.24
Declaration with regard to the information
contained in this annual report
Undersigned declare that to the best of their knowledge:
The annual financial statements, prepared in accordance
with the applicable standards for annual financial
statements, provide a true and faithful picture of the
equity, the financial situation and the results of Kinepolis
and the companies included in the consolidation;
The management report provides a true and faithful
picture of the development and the position of
Kinepolis and the companies included in the
consolidation, as well as a description of the primary
risks and uncertainties they face.
Eddy Duquenne,
CEO
Joost Bert,
CEO
20 kinepolis group
03
Kinepolis, corporate profile
Mission statement
Kinepolis Group believes in a world of cinema, entertainment and experience in which
individuals can choose when, where, how and with whom they enjoy themselves.
Kinepolis endeavours to provide its customers with original relaxation activities and
high-quality business experiences, aiming for collective experiences exclusive to the
Kinepolis environment.
To achieve this, Kinepolis explores innovation in many different fields to meet the
changing needs of its customers.
Kinepolis endeavours to manage, expand and increase the value of its unique
property position.
Kinepolis targets profitable growth in markets it has or aspires to a leading position.
corporate profile annual report 2009 21
Strategic highlights
The unique position of Kinepolis has been supported
since 2008 by three strategic highlights, which are a
source of great strength for the company and ensure it
is ready for a future in which creativity, dynamism and
dialogue will be key to establishing a long-time relationship with the contemporary public.
Kinepolis wants to be:
the best cinema operator;
the best marketer;
the best cinema property manager.
The implementation of this strategic vision over the next
few years will be basis for the creation of sustainable
shareholder value.
The Hollywood model has had its day and succumbed
to the need for a new, contemporary approach, oriented
to all age groups and diverse cultural styles and interests.
Kinepolis has all the know-how and the motivated team
to meet these challenges. The group will do everything
within its power over the next few years to implement this
philosophy and claim a leading role in the various business
segments it operates in.
The best cinema operator
Cinema continues to be one of the more visible core
businesses of Kinepolis. With this in mind, Kinepolis wants
to earn a reputation as the best cinema operator. This
goal relates both to the technical aspects of the offering,
especially striking here is the far-reaching digitisation,
and its content. Traditional movies are increasingly complemented with presentations of another cultural dimension,
such as sporting or musical events, which appeals to a new
audience.
22 kinepolis group
The best marketer
Kinepolis wants to establish a personal relationship with
its target groups. The anonymous relationship with past
cinema audiences must make way for more intensive
interaction with visitors, before, during and after presentations. Through the development and maintenance of its
customer relations Kinepolis wants to take its traditional
marketing efforts to a new level, which will form the
foundation for a more personal approach and dialogue
between Kinepolis and its visitors.
The best cinema property manager
The unique position held by Kinepolis also has its origins
in the group’s specific property management. Kinepolis
controls the vast majority of its properties, which means
it has great flexibility to utilise the available spaces to the
good of the group’s global strategy and make optimal use
of the infrastructure to achieve its strategic goals.
Organisation
Kinepolis is organised on a geographical basis. The most
important geographical markets are Belgium, France
and Spain. The organisation serves to improve customer
orientation, raise operational efficiency and optimise
property utilisation and management.
It is characterised by shorter lines, allowing decisions to
be taken faster, and a clear division of responsibilities
and goals.
Activities are now streamlined into five units. Cinema
Operations takes care of activities in the multiplexes.
Real Estate is responsible for property management and
utilisation. Kinepolis Film Distribution (KFD) looks after
movie distribution. Digital Cinema Services (DCS) delivers technological support. The Shared Services Center is
occupied with admin services and support.
Local, national and international permanent and ad hoc
committees are established as needed to study specific
issues. They are tasked with ensuring that information
is shared between the various parts of the group and
potential synergies are generated.
Innovation and customer experience
Alternative content
Alternative content is the digital programming of events
screened in Kinepolis cinemas – live or otherwise. That
includes premieres of TV series ahead of broadcast,
musical highlights such as rock and pop concerts and
operas, sports events and much more. This innovative
event-based programming – sometimes combined with
traditional movie screenings – is experiencing exciting
growth as more and more customers are hooked. The new
cinema experiences are the result of continual investments
by the group in innovation.
Opera in the Cinema was a frontrunner in this respect in
2009. The 2009-2010 opera season, which opened with
Tosca in October, was a smash hit. Live opera in association
with the New York Metropolitan Opera (Kinepolis Belgium,
Kinepolis France), Opéra Comique de Paris (Kinepolis
France) and various opera houses in Italy and Spain
(Kinepolis Spain) attracted more than 70 000 opera lovers
to Kinepolis in the various countries in 2009. Opera in the
Cinema is well worth a repeat. A new, bumper opera season
will launch in 2010 and some operas will be beamed live
and repeated at a later time.
In October Robbie Williams performed at the Roundhouse
in London in the opening concert in the BBC Electric Proms
2009. In partnership with the BBC, the event was beamed
live in high definition by satellite to a European cinema network, including 19 Kinepolis Group cinemas, to the delight
of 3 000 Robbie Williams fans who attended the comeback
show at Kinepolis. Iron Maiden also attracted their fans to
Kinepolis with Flight 666, a unique, global date for Maiden
fans. Voice Mail, Julien Clerc and many other performers
also brought music to the cinema.
The programme was also enhanced with live theatre
(Theater in the Cinema in association with the National
Theatre in London) and live ballet (Diaghilev’s Ballets in
association with Opéra Garnier in Paris). Such popular TV
series as Flikken and De Kampioenen (Belgium) were also
shown on the big screen.
To top it all, Kinepolis Spain beamed the final of the French
Open live and in 3D by satellite to the big screen in June
2009 in a very successful pilot project.
24 kinepolis group
The digitisation of screens goes hand in hand with the
development of an ICT network in cinemas for movie
distribution and screen monitoring.
Every multiplex is equipped with a hi-def satellite receiver
system for the presentation of alternative content. Events
are regularly screened in crystal-clear definition and 5.1
surround sound. Digital is now the ideal platform for
tailored public and private screenings.
Leadership in technology
Audiences lapped up the 3D showings of Ice Age 3, Up
and Avatar. The sturdy Dolby 3D specs and powerful
Barco projectors ensure that every 3D showing is a unique
experience. A string of high-profile 3D movies are set for
release in 2010, including Toy Story 3, Shrek 4, Step Up 3,
Harry Potter and the Deathly Hallows (Part I) and Alice in
Wonderland.
Digital cinema
Ticketing
Kinepolis has gone digital, with digital projectors and
movies, on the one hand, and a string of digital signage,
advertising, programming and information screens, on the
other. Network-controlled flat screens provide customers
with up-to-the-minute information on screenings, seat
availability and special offers.
Moviegoers can select their own seat when buying a
ticket at virtually every Kinepolis multiplex. The ticketing
software automatically identifies the most central
Kinepolis continued to open new digital screens to meet
increasing demand for digital movies. In Belgium the share
of digital screens at the end of 2009 was 80%, in France 74%
and in Spain 39%. In Belgium 20% of the digital auditoriums
are equipped with 3D systems. In France and Spain the
share is 25%. The high performance and high-tech character
has led many directors and distributors to select Kinepolis
to host their movie premiere in the presence of cast and
crew.
available seat, but customers can also choose a seat
themselves. Various payment methods are available.
interiors, retail and entertainment facilities with a view to
further improving customer perception and service.
The ICT approach to ticketing is integrated and centralised to guarantee optimal service at all Kinepolis points of
sale. Developed in-house, this ticket and sales platform,
which incorporates all sales channels and the entire back
office in a single IT solution not only allows Kinepolis
to provide a fast and specific response to the wishes of
visitors; it also ensures optimal operational efficiency.
Central tenets in this strategy are:
ICT is responsible for the installation and management
of the point-of-sale infrastructure, including payment
options, weighing equipment and voucher processing
in local languages and in accordance with local customs
and laws.
Research
Kinepolis participates in innovation projects, including
new sales channels, payment methods and broadening
customer experience, in association with centres and
partners at home and abroad. For example, ICT supports
the introduction of new voucher formulas and there are
investments in mobile ticketing and interactive systems
projects.
Refresh & Remodelling
Numerous innovative applications are introduced in the
Kinepolis multiplexes and the interiors are also being
refurbished. The Refresh & Remodelling department is
rejuvenating and updating interiors at Kinepolis at a fast
rate, as well as developing new concepts in the field of
26 kinepolis group
Automatic box office (‘self ticketing’) in contemporary
design.
Low-energy ‘edge-light’ poster frames, which
highlight the movie programme on a poster wall;
Self-service shops (Mega Candy) with wider selection
and greater convenience for customers;
High-quality seat modernisation.
In 2009 four Belgian and two French multiplexes were
given a full makeover. Kinepolis Madrid and Kinepolis
Valencia were also renovated. An ambitious programme is
also planned for 2010.
The refurbishment activities are paying dividends.
The self-service formula for drinks, snacks and retail
articles have been a success, enabling Kinepolis to
achieve the targeted increase in turnover per visitor
to the level of in-theatre sales, while improving
efficiency and reducing operating costs.
Human Resources
Kinepolis is aware that its success is largely dependent on the talent and commitment of its employees.
Including temporary staff members, 1 880 people
are concerned. The group is accordingly always
looking to create a working atmosphere in which
all employees, regardless of the type or duration of
their labour contract, are able to make optimal use
of their individual talents. By creating a solid human
resources policy Kinepolis aims to create a culture
in which initiative and personal development are
valued.
Education and training
Human resources policy is characterised by great attention for such aspects as sustainable quality, efficiency
and flexibility. These criteria are not only employed
when hiring new employees; they are also encouraged
during the employee’s career. Kinepolis invests more
than ever in its internal training systems. The Kinepolis
Academy is taking shape and part of the training is
offered digitally, as Kinepolis moves a step closer to
e-learning.
Evaluation
The new job evaluation system introduced in the
course of the previous year has already started paying
dividends. The system combines financial and quality
aspects and forms the cornerstone of the group’s
international bonus system. The new way of working
increases the involvement and responsibility of all
employees and the sense of responsibility of all employees, as well as being a practical tool for monitoring and
achieving the individual goals and strategic policy lines
of the group.
Internal communication
The internal communication is undergoing continued
streamlining. It is important that high-quality internal
communication stimulates internal learning processes,
too. By enabling experience sharing, often across
countries and departments, Kinepolis is well on the way
to becoming a ‘self-learning organisation’.
Sustainable enterprise
In contemporary business management, the company’s
economic role is often linked to broader social goals.
The pursuit of a way of doing business that is socially,
ecologically or culturally responsible is the basis of
sustainable enterprise, which takes account of the
company’s overall social role and its impact on all possible interest groups.
Minimising waste
Environmental concern is a permanent point for attention in the day-to-day operations of Kinepolis. Waste
prevention and sorting is an important ongoing project
that also actively involves Kinepolis visitors. Signage in
the multiplexes and large-scale awareness campaigns
prior to the main presentation help ensure the various
types of waste, primarily from the sale of refreshments
and snacks, are disposed of in the right receptacle.
Kinepolis also has contracts with specialised waste
processing and disposal firms.
Digitisation
The continuing digitisation of the audiovisual productions, which has accelerated in recent years, ensures
that Kinepolis is able to make a positive contribution to
waste prevention and the limitation of CO2 emissions.
With digital movie distribution, rolls of film no longer
need to be transported. This also limits the use of
traditional film, which requires chemical processing. The
rate of digitisation in Belgium now exceeds 80%.
28 kinepolis group
Energy
The joint project with Siemens Building Technologies to
install low-energy air conditioning in the auditoria was
rolled out further in 2009. The intelligent, centralised
control of air conditioning systems has enabled Kinepolis
to achieve a significant saving on its energy bill. Energy
consumption is also given appropriate attention in renovation and new-build projects. Such factors as climatologic
conditions and ambient heat play an important role in the
conceptualisation of the Kinepolis multiplexes. Support
projects such as the use of low-energy lighting and optimal thermal insulation ensure that energy consumption is
minimised in all circumstances.
Cultural and social integration
In our ever-changing, multicultural societies Kinepolis plays
an active role in the integration of new population groups.
With that goal in mind, the expectations of minorities
are also addressed in the programming of spaces. Turkish
cinema for one has established itself in the programming
of Kinepolis in Belgium and similar projects are running in
other countries. The success of this formula is shown by
the high attendances and visitor numbers that traditionally
could only be expected for blockbusters.
Kinepolis also works hard to improve the participation of
other population groups in film. Improved access for wheelchair users and special efforts for visitors with a handicap
are expected to ensure that all visitors are guaranteed the
unique Kinepolis experience.
In the year under review the
group supported numerous
other initiatives, including
a solidarity project of Child
Focus and Missing Children
Europe, a Unicef child
rights tour, a donation for
the victims of the Haitian
earthquake and awareness
campaigns based on
movies with an ecological
message, such as Home,
The Age of Stupid and
Dance for the Climat.
Social engagement
Kinepolis wishes to assume its social responsibility and fulfil
its social role in other ways too. KineScola is an educational
programme through which Kinepolis reaches out to
schools.
Based on a world-friendly
desire, Kinepolis wishes to focus public attention on a selection of topical issues, addressed in movies, documentaries
and total events. Social-, cultural- and ecological-inspired
movie presentations are awarded the Kinepolis World label.
30 kinepolis group
04
Kinepolis, core businesses
Box office
Kinepolis Group welcomed 22.0 million paying customers in
2009, which was a 0.5% rise on the 2008 figure.
Good visitor figures were posted in all countries, thanks to
the strong movie offering, especially in the summer and the
second half of the year. In spite of the tough economic conditions, growth was achieved in France and Spain. Belgium
experienced a limited fall. The level of success achieved in
2008 by Flemish movie Loft was not reproduced in 2009,
however. A number of blockbusters did nevertheless
perform outstandingly. Ice Age 3: Dawn of the Dinosaurs,
Harry Potter and the Half-Blood Prince, Avatar (a
success in the last two weeks of December),
Up and 2012 had the most successful runs.
Local movies like De Helaasheid der Dingen
(Belgium), Le Petit Nicolas (France) and Agora
(Spain) also performed well.
Alternative content in 3D is taking on an
increasingly important role in the programme. 3D (Ice Age 3, Up, Avatar) has been
welcomed with enthusiasm and culture and
core businesses annual report 2009 31
sports lovers have also been served with numerous
events, including live opera, theatre, ballet, concerts
and sporting finals. Opera in the Cinema led the pack,
attracting more than 70 000 opera buffs to our multiplexes in 2009. These new cinema experiences are the
result of continual group investments in innovation.
The events programme clearly appeals to new target
groups, such as opera lovers, football supporters and
fans of all music genres. Kinepolis expects a great
deal of these new developments, which reinforces its
image as a trendsetter in the industry.
In 2009 Kinepolis organised various events for specific
target groups, such as the continuation of the Magic
Sundays / Matinées Magiques for families and the
successful females-only Ladies@theMovies, which
was a smash-hit sell-out, with two XL editions in 2009.
Popular themes were also given appropriate attention,
with special events for Halloween, Valentine’s and
Christmas. The hosting of exclusive movie promotions, activities and special movie decorations ensured
that there was always something going on.
Many national and international stars of the big and
small screen visited Kinepolis in 2009, strengthening
its image as a temple of movies. Kiefer Sutherland
and Reese Witherspoon (Monsters vs Aliens), Zac Efron
(17 Again), Pedro Almodóvar and Penélope Cruz (Los
Abrazos Rotos), Alejandro Amenabar and Rachel Weisz
(Agora), Leslie Nielsen (Spanish Movie) and Miley Cyrus
(Hannah Montana: The Movie) were among those
who came to Kinepolis Madrid to present their new
movies. Jean Dujardin (Lucky Luke) visited Kinepolis
Imagibraine and Vin Diesel (Fast & Furious 4) Kinepolis
Lomme.
32 kinepolis group
In theater sales (ITS)
Theatre sales (ITS) comprises all revenues from the sale of
beverages, snacks and other products in multiplexes.
The food and beverages menu meets the demand for convenience among a large number of moviegoers, who want
to eat and drink in a pleasant atmosphere in the multiplex.
The group is also responding to increasing demand for
healthy food and beverages. In addition to proven sellers
like cola, potato chips and popcorn, Kinepolis now also
offers a choice of fruit juices and waters, yoghurt drinks,
fruit and more.
In 2009 ITS revenues rose by 5% compared with 2008.
ITS revenues per visitor continued to rise, in spite of the
purchasing power crisis, especially in Belgium. This rise
is bolstered by the further expansion of the range and
the innovative sales concepts. The new concept of large
self-service shops (Mega Candy) introduced in various mul-
tiplexes in 2008 and 2009 has been a remarkable success.
The aim is to invest further in the shop concept and to roll
it out in virtually all Kinepolis multiplexes.
Business to business (B2B)
B2B generates revenues from business events, which are
continually diversified and professionalised. This revenue
channel is entirely independent of movie ticket sales.
Kinepolis multiplexes are promoted as B2B locations with
digital projectors, extensive, tailored conferencing facilities
and service, based on media campaigns and successful
partnerships. Screen advertising, sampling, digital
displays in the foyers and advertising panels helped make
Kinepolis a top-of-mind corporate brand among Belgian,
French and Spanish cinemagoers. Digital projectors with
3D facilities, tailored conferencing infrastructure and
service, more energetic prospecting, intensive media
campaigns and successful partnerships enabled Kinepolis
multiplexes to present themselves as B2B locations like
never before.
In 2009 Kinepolis conferences and corporate parties
drew a lot of approval once again. Revenues were better
than expected, rising 3% compared with 2008, in spite
of a sharp fall in income from screen advertising, which
was affected by the economic crisis. Kinepolis multiplexes hosted more than 3 000 events in all territories.
Such prestigious names as Coca-Cola, Microsoft, Apple,
Carrefour, Repsol, Banco Santander and BNP Paribas
Fortis selected Kinepolis to host their conferences,
premieres, employee events and more.
K. by Jan Verheyen and the Studio 100 production Het
Geheim van Mega Mindy.
A wide selection of Flemish film premieres is scheduled
for 2010. Bo by director Hans Herbots (based on the
book Het Engelenhuis by Dirk Bracke) was released
on 10 February. The crime thriller Wolf, starring Axel
Daeseleire and Pieter Embrechts followed in March. 22
mei, Koen Mortier’s long anticipated second feature
after Ex Drummer and two movie debuts – Adem by
Hans Van Nuffel and TurQuaze by Kadir Balci are also
scheduled for release. Other features to look forward
to include the romantic comedies Oh No ! It’s a Woman
by Hilde Van Mieghem and Zot van A. by Jan Verheyen.
Young moviegoers will be well served in 2010, too, with
premieres including the Studio 100 productions Wickie
de Viking and a second Mega Mindy feature, as well as
Movie distribution
Film distribution activities are focused on Flemish movies,
among other things. Kinepolis Film Distribution (KFD) has
earned a strong position in this field in Belgium. With KFD,
Kinepolis shows that it wishes to support Flemish films.
More than 1.9 million cinemagoers saw a Flemish movie
at Kinepolis in 2009. Flemish cinema accordingly consolidated its gains a year after all records were broken thanks
to one movie – Loft. The undisputed winner in 2009 was
Felix van Groeningen’s De Helaasheid der Dingen, which
attracted more than 440 000 visitors, followed by Dossier
34 kinepolis group
the new 3D animation Sammy’s Adventures, The Secret
Passage by Ben Stassen, who was behind the smash 3D
animation Fly Me To The Moon.
Non-Flemish movies are also creating a stir. For these,
KFD works in association with independent distributors
such as E1 Entertainment and A-Film, two Dutch content
companies.
In 2009 KFD distributed 71 movies, including international smashes such as Fame, the musical, teen comedy
17 Again, horror sensation Paranormal Activity and Coco
Avant Chanel with the radiant Audrey Tautou in the
starring role.
The Imaginarium of Doctor Parnussus (the final movie to
feature Heath Ledger), the thriller Edge of Darkness with
Mel Gibson, Precious, which won two Oscars, romantic
drama Dear John, which knocked Avatar off the top of
the box office in the United States and comedy Kick-Ass
starring Nicolas Cage are all expected to pull in big
audiences in 2010.
Real estate
Real Estate is a separate business unit within the group
tasked with coordinating property management and
utilisation. At year’s end 2009 Kinepolis had a portfolio of 23
multiplexes, comprising 317 screens and 94 226 seats. 54 000
sq m of floor space in these multiplexes is leased to third
parties.
Kinepolis Real Estate invested efforts in three areas in
2009: increasing business rental income, expansion and
redevelopment, and refurbishment.
Rise in business rental income
Following on from 2008, in 2009 efforts were again
invested in driving up occupancy by filling the last
empty business spaces, creating additional spaces and
introducing retail concepts to improve diversification. In
2009 occupancy of the business spaces rose to 92% and
business rental income also rose compared with 2008.
Direct debit, an important development in the management of business spaces, was 98% in 2009.
Since 2007 tenants that do not radiate the image
demanded by Kinepolis have been replaced. The halting of
the summer disco in the parking lot in Madrid is one example of this strategy. A number of historic rental disputes
were also settled amicably.
Additional commercial spaces were created to maximise
utilisation of the available surface area and repurpose any
overcapacity. All contracts have already been signed for
this, ensuring that occupancy will rise again in 2010. The
impact on income is not yet clear because some new tenants are still in the permit and start-up phase.
36 kinepolis group
Kinepolis is property owner of Cinema City Poznan,
which has been operated by Israeli group IT International
Theaters (ITIT) since 19 January 2007.
As property owner, Kinepolis invested special attention
in the high-quality business places, which led to a rise in
occupancy within two years from 58% to 100%. The large
spaces in the Polish multiplex are being given additional
uses. For instance, in 2010 a climbing wall will be erected
in the lobby.
Kinepolis Real Estate now has a robust portfolio that can
be expanded further over the next few years.
Expansion and redevelopment
Studies are ongoing into the potential of a number of sites
and possible sites, not least in France and Spain. Existing
sites will be developed, while land with less strategic value
for Kinepolis will be sold in whole or in part.
A new entrance was opened at Kinepolis Ghent in 2009.
Apartments were built alongside the multiplex, in association with Groep Blijweert. Kinepolis contributed the
land and will be compensated with a number of studio
apartments and flats. Delivery is expected in 2010. An
agreement is being prepared with Liege University (ULG)
for the sale of the Opera cinema, which has been empty
since 2004.
The development of the planned shopping mall next to
Cinema City in association with Spanish group Bogaris
is advancing on schedule. Marketing efforts are being
invested before the permit applications are made.
Refurbishment
A series of replacement investments and refurbishments
were completed in the older multiplexes in consultation
with the Refresh & Remodelling department, as part of
a long-term plan. (For more details, see Innovation and
customer experience). The exteriors will be systematically
renovated in the future..
38 kinepolis group
05
Kinepolis, Corporate Governance
Corporate Governance
Pursuant to the Belgian Corporate Governance Code of 12
March 2009, on 17 December 2009 the Board of Directors
approved the revised version of the Corporate Governance
Charter of Kinepolis Group nv of 18 December 2007. The
Charter can be consulted on the Kinepolis website under
the Investor Relations section.
This section of the annual report contains more factual
information about the Corporate Governance policy,
including any relevant changes to this policy and important
events that have taken place during the fiscal period.
Board of Directors and special
Committees
Composition of the Board of Directors
At 31 December 2009 the Board of Directors consisted
of eight members, four of whom are independent of
the majority shareholders and management. These
directors fulfil the criteria for independent directors
as stated in the new Article 526ter of the Companies
Code and were nominated by the Board of Directors
based on the recommendation of the Nomination and
Remuneration Committee. The majority shareholders
did not execute their nomination right with regard to
these appointments.
The Board regularly reviews the criteria for its composition and of its committees, in light of ongoing and
future developments and expectations, as well as its
strategic objectives.
During 2009, Mr Rafaël Decaluwé (Gobes Comm.V.)
and Mrs Marion Debruyne (Marion Debruyne bvba)
were appointed independent directors. The
proposed changes to the composition of the Board
of Directors follows the shareholding reshuffle (at the
end of 2006) and constitutes the final phase in the
Corporate Governance annual report 2009 39
appointment of professional, independent directors
with extensive business experience to strengthen the
Board of Directors. Marc Van Heddeghem (Managing
Director Redevco Belgium) and Geert Vanderstappen
(Managing Partner Pentahold) had already been
appointed (2008). The new composition is in line with
the need for diversity and complementarity of skills.
Professor Dr Marion Debruyne is Associate Professor
and partner at the Marketing Competence Centre
of Vlerick Leuven Gent Management School. She is
specialised in strategic marketing , innovation and
competition.
Mr Rafaël Decaluwé is a former CEO of Bekaert who has
had a long career in financial management positions
at a number of multinationals, including Samsonite,
Fisher-Price and Black &Decker. Mr Decaluwé is chairman of the Board of Directors of Jensen Group nv.
Baron Hugo Vandamme (HRV nv) was president of the
Board of Directors until May 2008, accepting a seat as
independent director in the interests of continuity when
his term of office ended. After the new composition of the
Board of Directors and the induction of the new management team, he stepped down as an independent director
on 15 May 2009 to concentrate on his many other duties in
world business and culture. The Board of Directors would
like to thank him for his contribution to good governance
at the Group over the past years.
Bearing in mind the new career orientation of Mrs Mimi
Lamote (Eugenius bvba) she was not reappointed. The
Board of Directors thanks Mrs Lamote for her valued
contribution to the development of the Group.
The table below shows the composition of the Board of
Directors as well as the attendance record of the various
directors with respect to the eight meetings that took
place in 2009.
40 kinepolis group
DIRECTORS AT 31 DECEMBER 2009
NAME
POSITION
TERM ENDS
OTHER POSITIONS AT
LISTED COMPANIES
ATTENDANCE RECORD
Mr Philip Ghekiere (2)
President
2012
/
All meetings
Mrs Marie-Suzanne Bert-Vereecke,
permanent representative of
nv Pentascoop 1) (2)
Honorary
president
2012
/
3 meetings
Mr Joost Bert (2)
CEO
2012
/
All meetings
Mr Eddy Duquenne
CEO
2012
/
All meetings
Mr Geert Vanderstappen,
permanent representative of Management
Center Molenberg bvba (1)
Independent
director
2011
Spector Photo Group nv:
Director
All meetings
Mr Marc Van Heddeghem (1)
Independent
director
2011
Leasinvest Real Estate Bevak: Bestuurder
Befimmo nv: Director
7 meetings
Mrs Marion Debruyne, permanent
representative of Marion Debruyne bvba (1)
Independent
director
2012
/
All meetings since her appointment
Mr Rafaël Decaluwé, permanent
representative of Gobes Comm. V. (1)
Independent
director
2012
Jensen Group nv: Chairman
3 of the 4 meetings since his
appointment
DIRECTORS WHO VACATED THEIR SEATS IN 2009
NAME
POSITION
TERM ENDS
OTHER POSITIONS AT
LISTED COMPANIES
ATTENDANCE RECORD
Baron Hugo Vandamme, permanent
representative of nv HRV (1)
Independent
director until
15 May 2009
2009
Roularta Media Group nv: Chairman of
the Board of Directors
Picanol Group nv: Deputy Chairman of
the Board of Directors
Alfacam Group nv: Chairman of the
Board of Directors
3 meetings, including 2 by conference
call
Mrs Mimi Lamote, permanent
representative of Eugenius bvba (1)
Independent
director until
15 May 2009
2009
Belgacom nv: Director
3 meetings
(1) Non-executive director
(2) Representing the majority shareholder
Activity Report of the Board of Directors
In addition to the duties stated in the Companies Code, the
following issues are handled on a regular basis:
monthly review of the actual revenues and financial
results together with the forecasts;
progress reports on cinema and real estate projects;
reports of the Audit Committee and the Nomination
and Remuneration Committee;
Composition and activities report of Nomination
and Remuneration Committee
At 31 December 2009 the Nomination and Remuneration
Committee was composed of the following members,
the majority of whom were independent directors:
Mr Philip Ghekiere (President);
Mr Marc Van Heddeghem;
Mr. Rafaël Decaluwé.
The CEOs attend the meetings of the Nomination and
Remuneration Committee on invitation.
up-to-date treasury situation and cash flow forecast;
strategic decisions that need to be taken;
other issues, including human resources, external
communication, investor relations, disputes and legal
issues are addressed on an as needed or desired basis.
Meetings were also devoted to the following issues:
analysis and approval of annual and half-year financial
statements and reports and business updates;
profit plan for the following year;
The Nomination and Remuneration Committee met four
times: two times in February 2009 in the presence of all
its members at the time (Messrs Ghekiere, Vandamme
and Haspeslagh), one time in August and one time
in December 2009 in the presence of all its present
members.
The main subjects discussed by the Nomination and
Remuneration Committee were as follows:
proposal to appoint directors;
short and long term strategy;
proposals to set the management targets for
executive management and the method for
evaluating these goals;
target setting of management;
evaluation of the achievement of management goals;
financing strategies;
hiring and remuneration of members of
management;
valuation models.
Seven meetings are scheduled in 2010.
42 kinepolis group
share option allocations to members of
management.
Composition and activities report
of the Audit Committee
Pursuant to Article 526bis of the Companies Code at 31
December 2009 the Audit Committee was exclusively
composed of non-executive and independent directors
with the appropriate expertise and professional experience
in accounting and auditing bearing in mind their previous
and/or current business activities:
Mr Geert Vanderstappen;
Mr Rafaël Decaluwé.
The Chief Financial Officer, the Chief Executive Officers
and the internal auditor attend the meetings of the Audit
Committee. The representatives of the majority shareholders may attend meetings upon invitation.
In 2009 the Audit Committee met four times, with all its
members attending. The main agenda items were:
discussion of financial reporting in general and the
unconsolidated and consolidated annual and interim
financial statements in particular;
discussion, establishment and monitoring of the internal
audit activities;
discussion and evaluation of the internal control and risk
management systems;
evaluation of the internal audit process;
monitoring of the financial reporting and its compliance
with the applicable reporting standards.
Executive Management
Insider Trading Policy
The Company’s policy on insider trading was updated by
the Board of Directors of 18 December 2007 and included
in an Insider Trading Protocol that applies to the members
of the Board of Directors, the Chief Executive Officers and
other persons who might be aware of ‘inside knowledge’.
The protocol is designed to ensure that share trading by the
persons in question only take place strictly in accordance
with the Law of 2 August 2002 on supervision of the
financial sector, and also in accordance with the Guidelines
issued by the Board of Directors.
The Chief Financial Officer is responsible, as Compliance
Officer, for monitoring compliance with the rules as set out
in this Protocol.
The Executive Management consists of the two Chief
Executive Officers. The Board of Directors is authorized to
appoint additional members of Executive Management.
Remuneration Report
Kinepolis Group provides transparent information on
remuneration of members of the Board of Directors and
Executive Management to its shareholders and other
stakeholders.
Procedure for establishing the remuneration
policy and level for the Board of Directors
and Executive Management
During the previous financial year the Company formalised
the remuneration policy for its directors and Executive
Management, as developed by the Nomination and
Remuneration Committee (hereinafter ‘NRC’) and published in
the new Corporate Governance Charter adopted by the Board
of Directors on 17 December 2009.
This policy means that the global annual remuneration and
the corresponding policy for the members of the Board of
Directors are established by the General Meeting on the basis
of a proposal by the Board of Directors, advised by the NRC.
The allocation of the global portfolio to the individual
members is a decision of the Board of Directors on the
recommendation of the NRC.
The Board of Directors decides the remuneration as well as
the remuneration policy for Executive Management on the
recommendation of the NRC.
The NRC applied the following principles in 2009 in its
recommendations to the Board of Directors with regard
to the global remuneration of the Board of Directors, the
remuneration of the individual directors and Executive
Management:
remuneration must be sufficient to attract, retain and
motivate directors and members of Executive
Management who meet the profile required by the
Board of Directors;
for the execution of their duties as a member of the
Board of Directors, non-executive directors receive a
fixed amount for attending a meeting of the Board of
Directors;
a fixed amount is also allocated to the members and
chairman of the committees for attending each
meeting of the relevant committee;
the president and the honorary president of the
Board of Directors and the Chief executive Officers
are allocated a fixed annual amount;
the non-executive directors do not receive any
bonuses, participation in long-term share-related
incentive programmes, benefits in kind or benefits
related to pension plans;
44 kinepolis group
in addition to fixed remuneration, Executive
Management receives variable remuneration
dependent on the achievement of their qualitative
objectives and quantitative management targets
based on the results of the Group and its subsidiaries.
Next to this variable remuneration, which is dependent
on the achievement of the above management
targets, as established annually by the Board of
Directors on the recommendation of the NRC, in the
event of substantial outperformance with regard to
these quantitative targets, an outperformance bonus
will be allocated. Long-term incentives in the form of
share options or other financial instruments of the
Company or its subsidiaries may also be allocated to
the Executive Management. The remuneration
package for Executive Management may also include
participation in the corporate pension plan and the
use of a company car;
the exit arrangement for the early termination of the
contract of a member of Executive Management will
not exceed the equivalent of twelve months’ basic and
variable remuneration. In certain justified
circumstances, on the recommendation of the NRC
and if so stated in the contract, this amount may be
higher but never higher than the equivalent of
eighteen months’ basic and variable remuneration. In
any event, the exit arrangement shall not exceed
twelve months’ basic remuneration and the variable
remuneration if the person has not achieved the
performance criteria stated in his or her contract.
Remuneration for directors
The Company’s non-executive directors are remunerated
for their duties with a fixed amount for each attended
meeting of the Board of Directors and any of the
committees.
The president and honorary president of the Board of
Directors and the Chief Executive Officer are allocated a
fixed annual amount.
The amounts are decided by the Board of Directors on the
recommendation of the NRC, with due consideration for
the maximum amounts established by the shareholders.
The non-executive directors receive no other remuneration,
benefit, share-based or other incentives from the Company.
F.l.t.r. Raf Decaluwé, Eddy Duquenne, Philip Ghekiere, Joost Bert, Geert Vanderstappen, Marie-Suzanne Vereecke, Marc Van Heddeghem and Marion De Bruyne.
The individual remuneration of directors in fiscal 2009 is shown in the table below. All amounts are gross amounts
before deduction of tax.
NAME
TITLE
REMUNERATION (in euros)
BOARD OF DIRECTORS
Directors at 31 December 2009
Philip Ghekiere
President
85 000
Marie-Susanne Vereecke (Pentascoop nv)
Founding director – Honorary
President
50 000
Eddy Duquenne
Independent director
30 000
Joost Bert
30 000
Geert Vanderstappen (Management Center Molenberg bvba)
36 250
Marc Van Heddeghem
27 500
Marion Debruyne (Marion Debruyne bvba)
15 000
Rafael Decaluwé (Gobes Comm. V)
18 750
Hugo Vandamme (HRV nv)
46 875
Mimi Lamote (Eugenius bvba)
11 250
Directors who vacated their seats in 2009
TOTAAL
350 625
In accordance with agreements reached at the time of Kinepolis Group nv’s constitution and for as long as Mrs M.S. Bert-Vereecke is a
member of the Board of Directors, an annual remuneration of EUR 166 996 is paid to Pentascoop nv, whose permanent representative
is Mrs M.S. Bert-Vereecke, for the industry knowledge of Mrs M.S. Bert-Vereecke and her contribution as a founder to the Group’s
development.
46 kinepolis group
Remuneration of Executive Management
The term Executive Management refers to the two Chief
Executive Officers of the company.
The remuneration package of the Executive Management
has a fixed and a variable part.
In 2007 the fixed part of the remuneration was set by the
Board of Directors at EUR 270 000, index-linked annually, for
each member of the Executive Management.
The variable remuneration, the amount of which is
recommended by the NRC, is approved annually by the
Board of Directors, with due consideration for the need
for remuneration at the market rate proportionate to the
duties, responsibilities and management targets. For 2009
the global maximum amount in variable remuneration for
the Executive Management in total was set at EUR 400 000,
not including indexation. The significant variable part of the
remuneration ensures that the interests of the Executive
Management run parallel to the Group’s, lead to value
creation and loyalty, and provide the appropriate incentive
to achieve the short and long term targets of the Group
and its shareholders.
consolidated current profit, and qualitative, to which 30% of
the variable remuneration was linked in 2009.
In addition to the variable remuneration, in the event of
substantial outperformance with regard to the quantitative management targets, the Board of Directors on the
recommendation of the NRC has the discretionary power to
allocate a bonus, the annual amount of which is set by the
Board of Directors.
The amount of the exit remuneration for one of the members of Executive Management, in the event of change of
control of the company, shall be 24 months fixed remuneration plus the pro-rata part of the variable remuneration for
the ongoing year.
The table below provides an overview of the fixed part of
the remuneration, the other components of the remuneration (pension contributions, insurances, company cars and
so on) as well as the variable part of the remuneration for
the performance of the Executive Management in the
reported year.
The final amount of variable remuneration actually
allocated to the Executive Management depends on the
achievement of the qualitative and quantitative management targets that collectively apply to the Executive
Management and are recommended by the NRC and
approved by the Board of Directors on an annual basis.
These objectives are both quantitative, to which 70% of
the variable remuneration was linked in 2009 and the main
measure of which is the achievement of a certain level of
NAME
REMUNERATION (in euros)
2009
CEO
Joost Bert
276 251
Fixed remuneration (1)
39 168
Other components (2)
Variable remuneration
Eddy Duquenne (Eddy Duquenne bvba)
Fixed remuneration (1)
Other components
Joost Bert – Eddy Duquenne (Eddy Duquenne bvba)
(2)
204 631
276 251
22 138
Variable remuneration (3)
204 631
Outperformance bonus pool
230 209
(1) other than Board of Directors remuneration
(2) car and group insurance
(3) to be paid in 2010 for duties in 2009
(4) car
Long-term incentives
The goal of the 2007-2016 Share Option Plan (the ‘Plan’)
approved in 2007 is to support and achieve the following
corporate and human resource objectives:
to encourage and reward the executive directors and
members of Executive Management of the company
and its subsidiaries, who are able to contribute to the
long-term success and growth of the company and its
subsidiaries;
to assist the company and its subsidiaries in attracting
and retaining directors and members of Executive
Management with appropriate experience and skills;
to link the interests of the directors and members of
Executive Management more closely to those of the
shareholders of the company and give them possibility
of sharing in the value creation and growth of the
company.
48 kinepolis group
(3)
Pursuant to the Plan, the President and the Chief Executive
Officers were each allocated 69 308 options in 2008 and
30 000 options were allocated to the other members of
management in 2009.
In line with the ‘apply or explain’ principle, the company
decided that it was in the best interests of the company
and its shareholders to depart from the Code in a limited
number of specific cases.
These departures are explained below:
Description of the main characteristics
of the internal audit and risk control
system
A system will be implemented within Kinepolis integrating internal control processes. The Integrated Framework
for Risk Management chosen by the Board of Directors
is the one developed by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). This
framework provides an approach for risk control and
focuses on identifying and controlling strategic, operational and reporting risks as well as risks in the field of
legislation and regulations, with the overall aim of making
the achievement of the corporate goals possible.
Kinepolis follows the design of this model in order to
control the above risks in the business processes and
financial reporting. The system is developed centrally and
uniformly applied in the various parts of the organisation
and group companies as far as possible. The system fills
in the various activity components, as prescribed by the
reference model, as well as the various roles and responsibilities with regard to internal audits and risk control.
Kinepolis uses the threshold of 20% for the submission
of motions to the General Meeting, as stipulated in the
Companies Code, rather than the threshold of 5%
recommended in the Corporate Governance Code. The
company believes that the 5% threshold for requiring
the company to place any motion on the agenda of the
General Meeting is too low, and that the 20% threshold
better reflects the Group’s shareholder structure;
the Board of Directors believes that, bearing in mind its
own limited composition, an Audit Committee
comprising two independent members – both with the
requisite auditing and accounting expertise – provides
sufficient peace of mind with regard to the efficient
functioning of the Committee;
the Nomination and Remuneration Committee is
headed by the President of the Board of Directors, who
also has a limited number of executive duties. Bearing in
mind the limited nature of these duties, the Board of
Directors believes that this does not impede his
presidency and the good governance of the NRC.
Compliance with the corporate
governance code
Kinepolis complies with the principles of the Belgian
Corporate Governance Code.
50 kinepolis group
06
Information for the shareholders
Financial calendar
Tuesday
18 May 2010
Friday
21 May 2010
Thursday
26 August 2010
Tuesday
16 November 2010
Thursday
24 February 2011
Tuesday
17 May 2011
Friday
20 May 2011
Publication
of Q1 2010
business update
General Meeting
Publication
Publication
of Q3 2010
business update
Publication
of 2010 result and
Publication
of Q1 2011
business update
General Meeting
Information for the shareholders annual report 2009 51
Information on the Kinepolis Group share
Kinepolis Group (ISIN: BE0003722361 / Mnemo: KIN) is listed on NYSE Euronext Brussels, under compartment B, Mid Caps.
Closing price at 31 December 2009
€ 29.40
Average daily trading volume
11 552
Average closing price
€ 22.10
Trading volume 2009
2 929 380
Market capitalization at 31 December 2009
Number of shares
Number of shares at 31 December
€ 203 764 873
2007
2008
2009
6 930 778
6 930 778
6 930 778
Weighted average number of ordinary shares
6 850 222
6 819 329
6 655 040
Weighted average number of diluted shares
6 850 222
6 819 329
6 658 679
Data per share (in €)
2007
2008
2009
Revenues
30.63
31.29
33.36
EBITDA
7.15
7.59
8.31
Earnings
2.15
2.22
3.31
Current earnings
N/A
2.22
3.05
Diluted earnings
2.15
2.22
3.31
Gross dividend
0.65
0.66
0.92
Equity
16.6
17.2
19.1
Pay-out ratio
30%
30%
30% (1)
Share trading
2007
2008
2009
Closing price at 31 December (in €)
34.40
16.45
29.40
238 419
114 011
203 765
33.94
16.20
14.20
(1) based on current earnings from 2009 on
Market value at closing price (in ‘000 €)
Lowest price of the year (in €)
Highest price of the year (in €)
Average traded day volume
Source: NYSE Euronext
52 kinepolis group
57.30
34.50
31.03
14 321
5 907
11 552
Dividend
Price development and volume
over the past five years
For the financial year 2009, taking into account a payout
ratio of 30% applied on the current profit as of this year,
the proposal is to declare a gross dividend of € 0.92/share.
This pay-out ratio of 30% will thus have been maintained
for the 6th consecutive year. The Board of Directors has
set the date for dividend payment at 2 June 2010, subject
to approval by the General Meeting, on 21 May 2010, at a
financial institution of the shareholder’s choice by means of
submission of coupon no. 10.
Liquidity Agreement
In order to support the liquidity of the Kinepolis share,
the Group has underwritten a liquidity agreement (1) with
two liquidity providers, Bank Degroof nv and Petercam nv,
which covered the whole year 2009 and continue to be
applied.
Average volume per year
14 321
11 552
7 840
4 117
5 907
3 918
2004
2005
2006
2007
2008
2009
Follow-up by financial analysts
Four sell-side analysts monitored the Kinepolis share in
2009. Kinepolis has always acknowledged the importance
of an active monitoring by analysts. By being available to
the financial analysts at all times Kinepolis hopes to secure
permanent increased attention from private and professional investors in its home market and abroad. In recent
years, this has led to increased press coverage and liquidity
of the share.
(1) A liquidity agreement is an agreement which was concluded between NYSE Euronext
and a liquidity provider in favour of an issuing company.
The following institutions actively monitor Kinepolis and
publish regular analysts’ reports:
Bank Degroof
KBC Securities
ING Financial Markets
Petercam
Preben Bruggeman
Margo Joris
Filip De Pauw
Emmanuel Carlier
The ratings of these analysts and a list of their most recent
reports are provided at www.kinepolis.com/investors.
Relationships with shareholders and investors
Shareholders and investors who wish to receive the annual
report, press releases or other information on the Kinepolis
Group, can find these on the website www.kinepolis.com/
investors. On this investor site they can find the annual
report for download and in an interactive version, full
financial data on the Group, the press releases, stock market
price, the financial calendar and data regarding Corporate
Governance of Kinepolis Group nv. All this information is
available in Dutch, French and English.
wishes to provide individual investors and investor clubs
with independent information and education with
respect to financial assets. Communication, information
and education are primarily focused on shares. VFB
is a working member of the European Shareholders
Organisation and an active member of the World
Federation. There are currently 51 business members
and 29 business sponsors. Twice a year, Kinepolis Group
organizes an info stand at the largest investment events
in Belgium: the VFB Happening and the VFB Tips Day,
both taking place at Metropolis Antwerp.
Since January 2007, the
Kinepolis Group is also a member of the French-speaking
investors club Investa. The
aim is to create more visibility especially in the Frenchspeaking part of Belgium. Investa originated in March
2003 from the merger of the EVB (European Association
for Individual Investors) and the FBCI (Fédération Belge
des Clubs d’Investissements). Investa has approximately
3 500 members and has concluded agreements with
51 members. We also hope to organize several investor
events with them.
Roadshows and meetings with institutional investors
Investor clubs and individual investors
In 2009 Kinepolis Group has again actively managed its relation with the private investors community . A few examples:
Since the end of 2005, Kinepolis Group
has been a sponsor of the VFB (Flemish
Federation of Investor Clubs and
Investors), after having already been a
member for 2 years. VFB is a non-profit organization that
54 kinepolis group
For the benefit of the investment community (analysts,
fund managers, financial media etc), the Kinepolis Group
regularly organizes roadshows and meetings with the
management of the Group.
In the course of 2009 there have been more than 50
one-on-ones with institutional investors in Europe
(Brussels, London, Paris, Frankfurt, Rotterdam and
Amsterdam). In the first months of 2010, following the
publication of the 2009 financial results, more than 30
personal meetings have taken place with institutional
investors accross Europe.
Kinepolis Group invites analysts and the financial press
to a press and analyst presentation twice a year on the
occasion of the publication of the semi-annual and
annual results. Since the second semester of 2006, these
presentations are also made available by the management
via webcasts. These webcasts are placed on the Investor
Relations website of Kinepolis Group and contain a full
financial explanation based on the slides of the press and
analyst presentations. Via this medium, all the financial
information is available to each investor, whether institutional or private.
Shareholders’ structure at 31 March 2010 (1)
Kinohold Bis and Mr. Joost Bert
Kinepolis Group nv
Free Float of which:
2 475 888
35.72%
277 231
4.00%
4 177 659
60.28%
- Axa sa
658 179
9.50%
- Petercam sa + Petercam Mgt. Services sa
353 519
5.10%
- Bestinver Gestion
319 108
4.60%
- Axa Investment Managers
310 501
4.48%
- Quaeroq cvba
210 000
3.03%
TOTAL
6 930 778
100%
(1) as resulting from the transparency notices, accessible at www.kinepolis.com
Key group figures
IN ‘000 €
Revenue
EBITDA
REBITDA
2004
2005
2006
2007
2008
2009
200 608
192 812
211 191
212 324
216 877
231 226
46 030
42 660
48 720
49 579
52 588
57 627
N/A
N/A
N/A
N/A
52 651
58 072
Operating profit
25 790
20 728
26 507
25 146
28 718
31 822
11 266
8 105
14 635
14 726
15 186
22 177
Current profit
N/A
N/A
N/A
N/A
15 225
20 421
Investments
21 811
23 114
19 127
34 359
14 173
18 780
Amortization
20 610
21 654
21 850
23 587
23 813
24 787
Cash flow
10 864
3 388
-12 769
1 625
-1 150
5 076
156 659
149 657
136 570
138 868
129 248
89 364
2004
2005
2006
2007
2008
2009
361 293
366 035
350 774
363 884
352 383
343 537
91 175
96 014
108 059
113 554
117 306
132 540
2004
2005
2006
2007
2008
2009
From operating activities
10 855
28 874
33 256
36 525
40 009
66 256
From investing activities
-7 313
-19 759
-17 512
-30 071
-13 791
-15 660
Net financial debt
BALANCE SHEET TOTAL AND EQUITY
Balance sheet total
Equity
NET CASH FLOW
From financing activities
Net increase (decrease) in cash
RATIOS
7 322
-5 727
-28 513
-4 829
-27 368
-45 520
10 864
3 388
-12 769
1 625
-1 150
5 076
2004
2005
2006
2007
2008
2009
-4.0%
8.7%
0.5%
2.1%
6.6%
Revenue change in % versus previous year
Operating profit in % of Revenue
12.9%
10.8%
12.6%
11.8%
13.2%
13.8%
Tax burden in %
36.8%
39.4%
26.1%
19.3%
25.3%
24.9%
5.6%
4.2%
6.9%
6.9%
7.0%
9.6%
Equity in % of Balance sheet total
25.2%
26.2%
30.8%
31.2%
33.3%
38.6%
Investments / Revenues
10.9%
12.0%
9.1%
16.2%
6.5%
8.1%
3.4
3.5
2.8
2.8
2.5
1.6
8.7%
7.0%
9.0%
8.3%
9.6%
12.0%
Profit in % of Revenue
Net financial debt / EBITDA
ROCE
56 kinepolis group
2004
2005
2006
2007
2008
2009
Belgium
729
727
845
633
613
606
Abroad
749
810
911
805
770
769
TOTAL
1 478
1 536
1 755
1 438
1 383
1 375
MULTIPLEXES
2004
2005
2006
2007
2008
2009
9
9
10
11
11
11
Belgium
France
6
7
7
7
7
7
Spain
3
3
3
3
3
3
Switzerland
1
1
1
1
1
1
SUBTOTAL
19
20
21
22
22
22
Poland
1
1
1
1
1
1
TOTAL
20
21
22
23
23
23
2004
2005
2006
2007
2008
2009
10 816 229
9 936 224
10 641 006
9 912 058
9 658 063
9 521 742
NUMBER OF ADMISSIONS
Belgium
France
6 534 931
6 075 527
6 688 322
6 543 616
6 987 546
7 149 186
Spain
5 436 259
5 362 469
5 273 312
5 397 350
5 047 119
5 136 274
Switzerland
267 830
208 410
202 017
185 461
177 097
173 202
23 055 249
21 582 630
22 804 657
22 038 485
21 869 825
21 980 404
Poland
1 457 115
991 831
1 108 085
TOTAL
24 512 364
22 574 461
23 912 742
22 038 485
21 869 825
21 980 404
2004
2005
2006
2007
2008
2009
Revenue
8.18
8.54
8.83
9.63
9.92
10.52
EBITDA
1.88
1.89
2.04
2.25
2.40
2.62
REBITDA
N/A
N/A
N/A
N/A
2.41
2.64
Profit
0.46
0.36
0.61
0.67
0.69
1.01
Current profit
N/A
N/A
N/A
N/A
0.70
0.92
Amortization
0.84
0.96
0.91
1.07
1.09
1.13
Cash flow
0.44
0.15
-0.53
0.07
-0.05
0.23
Investments
0.89
1.02
0.80
1.56
0.65
0.85
Net financial debt
6.39
6.94
6.55
7.11
7.16
4.07
SUBTOTAL
DATA PER VISITOR (in €)
58 kinepolis group
07
Financial report
CONSOLIDATED INCOME STATEMENT
CONSOLIDATED INCOME STATEMENT
IN ’000 €
Revenue
NOTE
3
31/12/2009
31/12/2008
231 226
216 877
Cost of sales
-172 008
-163 532
Gross profit
59 218
53 346
Distribution expenses
-11 476
-12 008
Administrative expenses
-14 553
-14 493
Other operating income and expenses
4
Operating profit before financing costs
-1 367
1 873
31 822
28 718
Finance income
7
4 699
2 512
Finance cost
7
-7 004
-10 902
29 517
20 328
-7 340
-5 142
22 177
15 186
22 044
15 111
Profit before tax
Income tax expense
8
Attributable to:
Equity holders of the company
Non-controlling interests
133
74
22 177
15 186
Basic earnings per share (€)
20
3.31
2.22
Diluted earnings per share (€)
20
3.31
2.22
Financial report annual report 59
60 kinepolis group
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
COMPREHENSIVE INCOME (IN ‘000 €)
Translation differences
Net changes in the fair value of derivative financial instruments
NOTE
31/12/2009
31/12/2008
22 177
15 186
-45
-21
63
-3 322
Net changes in the fair value of financial assets available for sale
270
Net changes in the fair value of financial assets available for sale transferred to
the income statement
-2 070
Total other comprehensive income for the period
-2 052
-3 073
Total comprehensive income for the period
20 125
12 113
19 992
12 038
133
74
20 125
12 113
Attributable to:
Equity holders of the company
Financial report annual report 2009 61
CONSOLIDATED STATEMENT OF FINANCIAL POSITION / ASSETS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
IN ’000 €
NOTE
31/12/2009
31/12/2008
9
2 894
2 540
Goodwill
10
18 761
18 761
Property, plant and equipment
11
235 586
242 218
Investment property
12
13 159
14 413
Deferred tax assets
13
1 545
1 969
Derivative financial instruments
25
Non-current other receivables
15
16 179
17 350
Other financial assets
17
29
2 098
288 153
299 349
Other intangible assets
Non-current assets
Assets classified as held for sale
18
9 912
8 309
Inventories
14
2 049
2 272
Trade and other current receivables
15
22 937
24 945
154
221
Cash and cash equivalents
16
20 332
17 288
25
55 384
53 035
343 537
352 383
Current tax assets
Current assets
TOTAL ASSETS
62 kinepolis group
CONSOLIDATED STATEMENT OF FINANCIAL POSITION / EQUITY AND LIABILITIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
IN ’000 €
NOTE
31/12/2009
31/12/2008
Issued capital
19
48 963
48 963
Share premium
19
1 154
1 154
Consolidated reserves
82 539
67 393
-1 439
-1 394
131 217
116 116
1 323
1 190
132 540
117 306
Total equity attributable to equity holders of the company
19
Equity
Loans and borrowings
22
86 000
130 000
Provisions
23
2 886
1 839
Deferred tax liabilities
13
14 704
13 869
25
3 253
4 217
Trade and other payables
24
10 911
12 060
117 754
161 985
Non-current liabilities
Bank overdrafts
196
2 280
22
23 500
14 256
24
65 220
52 834
Provisions
23
86
1 564
25
Current tax liabilities
Current liabilities
964
61
3 277
2 097
93 243
73 093
343 537
352 383
CONSOLIDATED STATEMENT OF CASH FLOWS
IN ’000 €
NOTE
31/12/2009
31/12/2008
29 517
20 328
24 787
23 813
Cash flows from operating activities
Profit before tax
Adjustment for:
Depreciation and amortization
Provisions and impairments
6
23
1 017
-45
Government grants
4
-1 138
-1 283
(Gains) losses on sale of fixed assets
4
-7
-169
(Gains) losses on sale of financial assets
7
-3 000
0
-235
-987
Change in fair value of derivative financial instruments and unrealized foreign exchange
results
Discount of long-term receivables
7
-926
-989
Share-based payments
5
503
589
Interest expense and income
7
5 437
7 616
Change in inventory, trade receivables and payables
14, 15, 24
3 022
-3 279
Changes in other receivables and payables
14, 15, 24
12 145
-2
71 122
45 591
Cash from operating activities
Income taxes paid
-4 866
-5 582
66 256
40 009
9
-1 803
-1 510
11, 12
-16 977
-12 662
Net cash from operating activities
Cash flows from investing activities
Acquisition of other intangible assets
Acquisition of property, plant and equipment and investment property
Proceeds from sale of other intangible assets
Proceeds from sale of property, plant and equipment
Proceeds from sale of other financial assets
Net cash used in investing activities
64 kinepolis group
120
381
3 000
0
-15 660
-13 791
IN ’000 €
NOTE
31/12/2009
31/12/2008
9 500
5 000
-44 256
-15 803
-5 535
-7 952
Cash flows from financing activities
New loans
Repayment of borrowings
Interest paid
Interest received
Repurchase of own shares
Dividends paid
Net cash used in financing activities
Net cash flow
166
337
-998
-4 465
-4 397
-4 485
-45 520
-27 368
5 076
-1 150
Cash and cash equivalents at beginning of the period
16
15 057
16 240
Cash and cash equivalents at end of the period
16
20 136
15 057
3
-33
5 076
-1 150
Effect of exchange rate fluctuations on cash held
Net cash flow
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
IN ’000 €
At 31 December 2008
CAPITAL SHARE PREMIUM
48 963
1 154
TRANSLATION
RESERVE
HEDGING
RESERVE
-1 394
-2 866
-45
63
Net changes in the fair value of financial assets available for sale transferred to the
income statement
-45
63
-45
63
1 154
-1 439
-2 803
CAPITAL SHARE PREMIUM
TRANSLATION
RESERVE
HEDGING
RESERVE
-1 373
456
Dividends paid
Share-based payment transactions
Purchase / sale of treasury shares
Total transactions with owners, recorded directly in equity
At 31 December 2009
IN ’000 €
At 31 December 2007
48 963
48 963
1 154
-21
-3 322
Net changes in the fair value of financial assets available for sale
-21
-3 322
-21
-3 322
-1 394
-2 866
Dividends paid
Share-based payment transactions
Purchase / sale of treasury shares
Total transactions with owners, recorded directly in equity
At 31 December 2008
66 kinepolis group
48 963
1 154
FAIR VALUE
RESERVE
RETAINED
EARNINGS
TREASURY SHARES
SHARE-BASED
PAYMENTS
RESERVE
EQUITY ATTRIBUTABLE
TO EQUITY HOLDERS OF
THE COMPANY
NONCONTROLLING
INTERESTS
TOTAL EQUITY
2 070
73 576
-5 976
589
116 116
1 190
117 306
22 044
133
22 177
22 044
-45
-2 070
-2 070
-2 070
-45
63
63
-2 070
-2 070
-2 052
22 044
19 992
-4 397
-2 052
133
-4 397
503
-998
20 125
-4 397
503
503
-998
-998
-4 397
-998
503
-4 892
0
91 223
-6 974
1 092
131 216
1 323
132 539
fAIR VALUE
RESERVE
RETAINED
EARNINGS
TREASURY SHARES
SHARE-BASED
PAYMENTS
RESERVE
EQUITY ATTRIBUTABLE
TO EQUITY HOLDERS OF
THE COMPANY
NONCONTROLLING
INTERESTS
TOTAL EQUITY
1 800
62 950
-1 511
0
112 438
1 116
113 554
15 111
74
15 186
15 111
-4 892
-21
-21
-3 322
-3 322
270
270
270
270
-3 073
-3 073
270
15 111
12 038
-4 485
12 113
-4 485
-4 485
589
589
589
-4 465
2 070
74
-4 465
-4 465
-4 485
-4 465
589
-8 361
-8 361
73 576
-5 976
589
116 116
1 190
117 306
Notes to the consolidated financial statements
1.Significant accounting policies
2. Segment reporting
3.Revenue
4.Other operating income and expenses
5.Personnel expenses
6.Additional information on operating expenses by nature
7. Finance income and cost
8.Income tax expense
9.Other intangible assets
10.Goodwill
11.Property, plant and equipment
12.Investment property
13. Deferred tax
14.Inventories
15.Trade and other receivables
16.Cash and cash equivalents
17.Other financial assets
18.Assets classified as held for sale
19.Capital and reserves
20.Earnings per share
21.Share based payments
22.Interest-bearing loans & borrowings
23.Provisions
24.Trade and other payables
25.Financial instruments
26.Operating leases
27.Capital commitments
28.Contingencies
29.Related parties
30.Subsequent events
31.Group entities
32. Mandates and remuneration of the Statutory auditor
68 kinepolis group
1. Significant accounting policies
Kinepolis Group nv (the ‘Company’) is a company
established in Belgium. The consolidated financial
statements of the company for the year ending on 31
December 2009 include the company and its subsidiaries (together the ‘Group’) and the Group’s interest
in equity accounted investees. These consolidated
financial statements were approved by the Board of
Directors for publication on 31 March 2010.
Statement of compliance
The consolidated financial statements have been prepared in accordance with the International Reporting
Standards (IFRS ) as published by the International
Accounting Standards Board (IASB) and adopted by the
European Union on 31 December 2009. The Company
has not applied any European exceptions to IFRS,
which means that the financial statements comply in
full with the IFRS standards.
Basis of preparation
The consolidated financial statements are presented
in euros, rounded to the nearest thousand. They are
drawn up on a historical cost basis, with the exception
of the following assets and liabilities which are
recorded at fair value: derivative financial instruments
and financial assets available for sale.
Non-current assets held for sale are valued, in accordance with IFRS 5, at the lower of carrying value and
fair value less costs to sell. Hedged assets and liabilities
included in the balance sheet are valued at fair value
in the amount of the hedged risk.
The accounting policies have been applied
consistently across the Group and are consistent with
those applied in the previous financial year, with the
exception of the following new or revised standards
and interpretations, which became effective after
31 December 2008 and have an impact on these
consolidated financial statements.
The revised standard IAS 1 Presentation of Financial
Statements (2007) became effective on 1 January 2009.
As a consequence, all changes in equity relating to
shareholders in their capacity as shareholder are
presented in the consolidated statement of changes
in equity. All changes in equity not relating to shareholders in their capacity as shareholder are recognised
in the consolidated statement of comprehensive
income. The comparative information in these
financial statements is adjusted to comply with the
revised standard.
IFRS 8 Operating Segments replaces IAS 14 Segment
Reporting and is applicable since 2009. The application
of IFRS 8 has no impact on the segment presentation
of the Group or on the comparative figures for 2008.
Kinepolis is organised on a geographical basis. The
various countries constitute the operating segments.
The operating segments are reported in such a way
that they are compatible with the internal reporting to
the CEOs and CFO, who are the highest placed officers
of the Group and take the main operating decisions
(note 3).
The presentation of the statement of cash flows was
changed compared with the previous year. Paid and
received interest are presented as cash flows from
financing activities as from 2009. The changes in working capital are split between the change in inventory,
trade receivables and payables and the change in
other receivables and payables. The discount of the
long-term receivables is also shown on a separate line.
The comparative figures for 2008 have been adjusted.
The preparation of the financial statements under IFRS
requires management to make judgments, estimates
and assumptions that influence the application of
the policies and the reported amounts of assets and
liabilities, income and expenses. The estimates and
related assumptions are based on past experience and
on various other factors that are considered reasonable
in the given circumstances. The outcomes of these
form the basis for the judgment as to the carrying
value of assets and liabilities where this is not evident
from other sources. Actual results can differ from these
estimates. The estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions of
estimates are recognized in the period in which the
estimate is revised, when the revision affects only this
period, or in the revision period and future periods,
where the revision affects both the reporting period
and future periods.
Basis of consolidation
Subsidiaries
Subsidiaries are those entities over which the Company
exercises control. Control is understood as meaning
70 kinepolis group
that the Company can, directly or indirectly, determine
an entities’ financial and operating policy. In determining
whether a situation of control exists, potential voting rights
that can be exercised at the time are taken into account.
The financial statements of subsidiaries are recognized in
the consolidated financial statements from the date that
control commences until the date that control ceases.
Equity accounted investees
Equity accounted investees are entities over which the
Group exercises significant influence, but not control, over
the financial and operational policies. Significant influence
is deemed to exist where the Group holds between 20
and 50 per cent of the voting rights of another entity. The
consolidated financial statements include the Group’s share
in the income and expenses of the participating interest,
which is recorded following the equity method, from the
starting to the ending date of this significant influence.
Whenever the Group’s share in the losses exceeds the
carrying value of the investments in equity accounted
investees, the carrying value is reduced to zero and future
losses are no longer recognized, except to the extent that
the Group has an obligation on behalf of the investee.
Transactions eliminated on consolidation
Intra-group balances and transactions, along with any unrealized gains and losses on transactions within the Group
or gains or losses from such transactions, are eliminated
in the consolidated financial statements. Unrealized gains
arising from transactions with equity accounted investees
are eliminated proportionally to the Group’s interest in the
investee. Unrealized losses are eliminated in the same way
as unrealized gains, but only where there is no indication of
impairment.
Foreign currency
Transactions in foreign currencies
Transactions in foreign currencies are converted
into euro at the exchange rate on transaction date.
Monetary assets and liabilities expressed on the
balance sheet date in foreign currencies are converted
into euro at the exchange rate at the balance sheet
date. Exchange rate differences occurring in the
translation are immediately recognized in the income
statement. Non-monetary assets and liabilities
expressed in foreign currency are converted at the
exchange rate at the transaction date. Non-monetary
assets and liabilities in foreign currencies which are
recognized at fair value are converted into euro at the
exchange rates at the date on which the fair value was
determined.
Financial statements of foreign operations
Assets and liabilities relating to foreign operations,
including goodwill and fair value adjustments on
acquisition, are converted into euro at the exchange
rate at balance sheet date. Income and costs of foreign
entities are converted into euro at exchange rates
approaching the exchange rates prevailing on the
transaction dates.
The exchange rate differences arising from the translation are recognized immediately in equity.
Financial instruments
All financial instruments are recorded on the transaction date.
The Group uses derivative financial instruments to
manage the exchange rate and interest risks deriving
from operational, financial and investment activities.
Under its treasury management policy the Group
does not use derivative financial instruments for
trading purposes. Derivative financial instruments
that do not meet the requirements of hedge accounting are, however, accounted for in the same way as
derivates held for trading purposes.
Derivative financial instruments are initially valued at
fair price. Attributable transaction costs are expensed
as incurred. Subsequent to initial recognition these
instruments are measured at fair value. The accounting treatment of changes therein is as described
below.
The fair value of derivative financial instruments is
the estimated amount that the Group will obtain or
pay at balance sheet date at the end of the contract
in question, with reference to present interest and
exchange rates and the creditworthiness of the
counterparty.
Hedging
Cash flow hedges
Whenever derivative financial instruments serve to
hedge the variability in cash flows of a liability or
a highly probable future transaction, the effective
portion of the changes in fair value of these derivatives is recorded directly in equity. When the future
transaction results in the recording of a non-financial
asset, the cumulative profits or losses are removed from
equity and transferred to the carrying amount of the
asset. In the other case the cumulative profits or losses
are removed from equity to the income statement at the
same time as the hedged transaction. The non-effective
portion is included immediately in the income statement.
Profits or losses deriving from changes in the time value
of derivatives are not taken into consideration in determining the effectiveness of the hedging transaction and are
recognized immediately in the income statement.
Whenever a hedging instrument or hedge relationship
is ended, but the hedged transaction still has not taken
place, the cumulative gains or loss remains in equity and
will be recognized in accordance with the above policies
once the transaction takes place. When the covered
transaction is not longer probable, the cumulative gains
or loss included in equity is immediately taken into the
income statement.
Fair value hedges
Hedge accounting is not applied to derivative instruments
which are used for fair value hedging of foreign currency
denominated monetary assets and liabilities. Changes in
the fair value of such derivatives are recognized in profit or
loss as a part of the currency translation gains and losses.
Non-derivative financial instruments
Non-derivative financial instruments comprise
investments in equity and debt securities, trade and
other receivables, cash and cash equivalents, loans and
borrowings, trade and other payables.
72 kinepolis group
Non-derivative financial instruments are initially recognized at fair value plus, for instruments not at fair value
through profit or loss, any directly attributable transaction
costs. After initial recognition, non-derivative financial
instruments are valued as described below.
Cash and cash equivalents are the cash on hand and
all call deposits. Bank overdrafts that are repayable on
demand, which are an integral part of the Group’s cash
management are viewed as a part of cash and cash
equivalents in the presentation of the cash flow table.
Financial assets available for sale –
Investments in equity securities
Investments in equity securities consist of participating
interests in enterprises in which the Group has no control
or no significant influence.
In those cases in which the Group has directly or indirectly
more than 20% of the votes and/or exercises significant
influence on the financial and operating policy, the
participating interests are viewed as equity accounted
investees. Participating interests in equity accounted
investees are recorded by the equity method, except
when classified as financial assets held for sale in accordance with IFRS 5 (Non-current assets held for sale and
discontinued operations). When there is reason to apply
an impairment, the accounting policy for impairments is
applied.
Other investments in equity securities are classified as
financial assets available for sale and recorded at fair
value on initial recognition, except for equity securities
not listed on an active market and for which the fair value
cannot reliably be determined. Participating interests not
eligible for valuation at fair value are recorded at historical
cost. Profits and losses from the change in fair value of a
participating interest classified as a financial asset available
for sale and which is not hedged are taken directly into
equity. Where the investment is sold, received or otherwise
transferred, or when the carrying value of the investment
is impaired, the accumulated profit or loss previously
included in equity is transferred to profit or loss.
The fair value of financial assets available for sale is their
listed bid price on the balance sheet date.
Other non-derivative financial instruments
Other non-derivative financial instruments are measured
at amortized cost price using the effective interest rate
method less any impairment losses.
Owned assets
Items of property, plant and equipment are measured at
cost less accumulated depreciation and impairments (see
below). The cost of self-constructed assets includes the
cost price of the materials, direct personnel expenses and a
proportionate share of the production overhead, any costs
of dismantling and removal of the asset and the costs of
restoring the location where the asset is located. Where
parts of an item of property, plant and equipment have
different useful lives, these are accounted for as separate
plant, property and equipment items.
Gains and losses on the sale of property, plant and equipment are determined by comparing the sales proceeds
with the carrying value of the assets and are recognized
within ‘other operating income’ in the income statement.
Leased assets
Lease agreements that transfer to the Group nearly all the
risks and rewards attached to the ownership of an asset
are viewed as finance leases. Buildings and equipment
acquired under finance leases are recorded at the lower of
the fair value or the present value of the minimum lease
payments at the beginning of the lease agreement, less
cumulative depreciation and impairments.
Subsequent costs
The cost price of replacing part of a property, plant and
equipment is included in the carrying value of the asset
whenever it is probable that the future economic benefits
relating to the assets will flow to the Group and the cost
price of the assets can be measured reliably. The cost of
daily maintenance of property, plant and equipment is
recognized as an expense in profit or loss as and when
incurred.
Depreciation and amortization
Depreciation is charged to the income statement using the
straight-line method over the expected useful life of the
asset, or of the separately recorded major components of
an asset. The residual value, useful lives and depreciation
methods are reviewed annually. Land is not depreciated.
The estimated useful lives are:
- buildings 30 years
- fixtures 5 – 15 years
- computers 3 years
- machinery and equipment 5 – 10 years
- furniture and vehicles 3 – 10 years.
Investment property
Investment property is property that is held in order
to earn rental income or for capital appreciation or
both, but is not intended for sale in the context of
usual business operations, for use in the production or
delivery of goods or for administrative purposes.
Investment property is measured at cost, less cumulative depreciation and impairments. The accounting
policies given under ‘Property, plant and equipment’
apply.
Rental income from investment property is accounted
for as described below in the accounting policy for
the ‘Revenue and other income’.
Intangible assets
Goodwill
Goodwill from an acquisition is the positive difference
between the purchase price and the Group’s share
in the fair value of the acquired identifiable net
assets. Goodwill is valued at cost less impairment
losses. In respect of equity accounted investees the
carrying value of the investment in the enterprise also
includes the carrying value of the goodwill. Goodwill
is not amortized. Instead, it is subject to an annual
impairment test.
Negative goodwill
Negative goodwill from an acquisition is the negative
difference between the Group’s share in the fair
value of the acquired net identifiable assets and
74 kinepolis group
the purchase price. Negative goodwill is immediately
charged to the income statement.
Acquisitions of non-controlling interests
When a non-controlling interest is acquired in a
subsidiary, the goodwill corresponds to the difference
between the cost price of the additional investment and
the carrying value of the net assets that are acquired on
the date of exchange.
Other intangible assets acquired by the Group are
valued at cost less accumulated amortization and
impairment losses (see below). Costs of internally
generated goodwill and brands are recognized in profit
or loss as incurred.
Internally developed software
Internally developed software is capitalized whenever
the development costs can be reliably determined,
the product or process is technically and commercially
feasible, the future economic benefits are probable, and
the Group intends and has sufficient resources in order
to complete the development and to actively use or sell
it. The cost of internally developed software includes all
costs directly attributable to the asset.
Other development costs are expensed to the income
statement as and when incurred.
Subsequent expenditure
Subsequent expenditure in respect of intangible assets
is capitalized only when it increases the future economic
benefits specific to the related asset. All other expenditure is expensed as incurred.
Amortization
Amortization is charged to the income statement
by the straight-line method over the expected
useful life of the intangible asset. Intangible assets
are amortized from the date they are ready for use.
Their estimated useful life is 3 to 10 years.
Inventories
Inventories are valued at the lower of cost or net
realizable value. The net realizable value is equal to
the estimated sale price in the ordinary course of
the business, less the estimated costs of completion
and selling expenses.
The cost price of inventories includes the costs
incurred in acquiring the inventories and bringing
them to their current location and condition.
Inventories are measured using the FIFO method
Impairments
The carrying values of the Group’s assets, other than
inventories and deferred tax assets are reviewed
at each balance sheet date to determine whether
there is any indication of impairment. Where there
is indication of impairment, the recoverable amount
of the asset is estimated. In the case of goodwill
and intangible assets with an undetermined
useful life or which are not yet available for use,
the recoverable amount is estimated at every
balance sheet date. An impairment loss is recorded
whenever the carrying value of an asset, or the cash
flow generating unit to which the asset belongs, is
higher than the recoverable amount. Impairment
losses recorded in respect of cash flow generating
units are first deducted from the carrying value
of any goodwill assigned to cash flow generating
units (or groups of units) and then proportionally
from the carrying value of the assets of the unit
(or group of units). Impairment losses are charged
to the income statement. A cumulative loss on
a financial asset available for sale previously
recognized in equity is transferred to the income
statement.
Calculation of the recoverable amount
Individually significant financial assets are tested
individually for impairment. The remaining financial assets are divided into groups having similar
credit risk features and are assessed collectively.
The recoverable amount of the Group’s financial
assets measured at amortized cost is calculated as
the present value of expected future cash flows at
the interest rate inherent to these assets. Current
receivables are not discounted. The recoverable
value of other assets is the greater of the sales
price less selling expenses and the value in use.
To assess the value in use, the expected future
cash flows are discounted to their present value,
using a weighted average cost of the asset that
reflects both the current market rate and the risks
specific to that asset. Where an asset does not
itself generate significant cash flows, the recoverable value is determined based on the cash flow
generating unit to which the asset belongs.
Reversal of impairments
An impairment is reversed when the reversal can be
objectively connected with an event occurring after
the impairment was recorded. A previously recorded
impairment is reversed where a change has occurred in
the estimates used in determining the realizable value,
but not in a higher amount than the net carrying value
that would have been determined if no impairment had
been recorded in previous years.
Goodwill impairments are not reversed.
In the case of financial assets that are measured at
amortized cost and financial assets available for sale in
the form of bonds, the reversal is against the income
statement. In the case of available-for-sale financial
assets that are equity securities, the reversal is taken
directly to equity.
Non-current assets (or groups of assets and liabilities
being disposed of), that are expected to be recovered
mainly via a sales transaction and not through the
continuing use thereof, are classified as “held for sale”.
Directly prior to this classification the assets (or the
components of a group of assets being disposed of) are
remeasured in accordance with the Group’s financial
accounting policies. Hereafter the assets (or a group of
assets to be disposed of) are measured on the basis of
their carrying value or, if lower, fair value less cost to sell.
Any impairment loss on a disposal group is allocated in
the first place against goodwill and then, proportionally,
against the remaining assets and liabilities, except that
76 kinepolis group
no impairments are allocated against inventories, financial
assets, deferred tax assets, employee-benefit assets and
investment property, which will continue to be measured
in accordance with the Group’s accounting policies.
Impairment losses on initial classification and gains and
losses on subsequent measurement are recognized in
profit or loss. Gains are not recognized in excess of any
cumulative impairment loss.
Share capital
Ordinary shares
Ordinary shares are classified as equity. Additional costs
which are directly attributable to the issue of ordinary
shares and share options are deducted from equity, after
deducting any tax effects.
Repurchase of share capital
Where share capital classified as Equity is reacquired by
the Company, the amount paid, including directly attributed costs, is viewed as a change in equity. Purchase of
treasury shares are recognized as a deduction from equity.
Dividends
Dividends are recognized as amounts payable in the
period in which they are declared.
Employee benefits
Post employment benefits
Post employment benefits contain the pension plans.
The Group provides post-retirement remuneration for
the majority of its employees in the form of ‘defined
contribution’ pension plans via an independent
fund or pension schemes.
Defined contribution plans
The contribution paid for defined contribution plans
is immediately recognized in the income statement.
Share based payments and related benefits
The warrant plan enables Group employees to
acquire shares of the Company. The warrant exercise
price is equal to the market price of the underlying
shares on the date of offer and no compensation
cost or liability is recorded.
Share transactions with employees are charged
to the income statement over the vesting period
based on the fair value on the date of offering with
a corresponding increase in equity. The fair value is
determined using an option price definition model.
Restructuring
A provision for restructuring is set up whenever the
Group has approved a detailed, formal restructuring plan
and the restructuring has either been commenced or
publicly announced. No provisions are taken for future
operating costs.
Site restoration
In accordance with the Group’s contractual obligations
a provision for site restoration is set up whenever the
Group is obliged to restore land to its original condition.
Onerous contracts
A provision for onerous contracts is set up whenever the
economic benefits expected from a contract are lower
than the unavoidable costs of meeting the contract
obligations.
Revenue and other income
Provisions
A provision is recorded in the balance sheet
whenever the Group has an existing obligation
(legal or constructive) as a result of a past event
and where it is probable that the settlement
of this obligation will result in an outflow from
the company of resources containing economic
benefits. Where the effect is material, provisions are
measured by discounting the expected future cash
flows at a pre-tax discount rate that reflects both
the current market assessment of the time value of
money and, where applicable, the risks inherent to
the obligation.
Sales of goods and services
On the sale of goods the income is recognized in the
income statement upon transfer to the purchaser of the
essential risks and rewards. Where services are provided
the income is recognized in the income statement upon
delivery of this service. Income is not recorded where
significant uncertainty exists as to the collection of the
receivable, related costs and the possible return of the
goods.
Rental income
Rental income is taken into income on a straight-line
basis over the rental period. Lease incentives granted are
regarded as an integral part of rental income.
Government grants
Government grants are initially regarded as accrued
income in the balance sheet whenever reasonable
certainty exists that they will be received and that
the Group will fulfil the associated conditions. Grants
that compensate incurred costs are systematically
taken into profit in the same period as the costs are
incurred. Grants that compensate costs incurred
in respect of assets are systematically taken into
income over the useful life of the assets.
Expenses
Rental income is taken into profit or loss pro rata
temporis. Dividend income is included in the income
statement on the date that the dividend is declared.
The rent component of payments on finance leases is
taken into profit or loss.
Finance expenses directly attributable to the
acquisition or construction of a qualifying asset are
capitalized as part of the cost of that asset.
Income taxes
Payments relating to operating lease agreements
Payments relating to operating lease agreements are
taken into profit or loss on a straight-line basis over
the lease period.
Income tax expenses consist of current and deferred
tax. Taxes are recorded in profit or loss except where
they relate to elements recorded directly in equity.
In this case the taxes are recognized directly in equity.
Payments relating to finance lease agreements
The minimum lease payments are recorded partly
as finance expenses and partly as repayment of the
outstanding liability. Finance expenses are allocated
to each period of the total lease period in such a way
as to give a constant periodical interest rate over the
remaining balance of the liability.
Current income taxes consist of the expected tax
payable on the taxable profit of the year, calculated
according to the tax rates in effect at the balance
sheet date, as well as tax adjustments in respect of
prior years.
Finance income and expenses
Finance income and expenses consist of interest
payable on loans and borrowings, interest income
on funds invested, dividends, foreign exchange
gains and losses and changes in fair value on
hedging instruments recognized in profit or loss.
Exchange rate gains and losses are compensated per
currency.
78 kinepolis group
Deferred taxes are recorded based on the balance
sheet method, for all temporary differences between
the taxable base and the carrying value for financial
reporting purposes, for both assets and liabilities. No
deferred taxes are recorded for the following temporary differences: non-tax deductible goodwill, initial
recording of assets and liabilities that do not affect
the accounting or taxable profits and differences
relating to investments in subsidiaries to the extent
that an offsetting entry is unlikely in the near future.
The amount of the deferred tax is based on expectations
as to the realization of the carrying value of the assets
and liabilities, using the tax rates in effect or those of
which the enactment has been substantively completed
at balance sheet date.
A deferred tax asset is recorded in the balance sheet
only when it is probable that adequate future taxable
profits are available against which temporary differences
can be utilized. Deferred tax assets are reduced whenever it is no longer probable that the related tax benefit
will be realized.
Additional income tax resulting from the declaring of
dividends is recorded simultaneously with the liability to
pay the dividend in question.
Segment information
An operating segment is a clearly distinguishable component of the Group that engages in business activities
from which it may earn revenues and incur expenses,
including revenues and expenses in relation to
transactions with any of the Group’s other components.
The Group is organised geographically. The different
countries constitute operating segments, in accordance
with the internal reporting to the CEOs of the Group.
Discontinued operations
Classification as discontinued operations occurs upon
the earlier of disposal or when the business activity
fulfils the criteria for classification as held for sale.
Subsequently non-current assets and disposal groups,
when first recorded as held for sale, are measured at
the lower of carrying value and fair value less cost to
sell. Whenever an activity is classified as a discontinued
operation, the comparative income statement figures are
restated as if the activity had been discontinued from the
start of the comparative period.
Capital management
Board policy is aimed at maintaining a strong capital
position in order to retain the confidence of investors,
lenders and markets and to safeguard the future
development of the business activities. The Board of
Directors monitors the return on equity, which is defined
by the Group as the net operating result divided by
equity, excluding non-controlling interests. The Board of
Directors also monitors the level of the dividend payable
to ordinary shareholders.
The Board seeks a conservative balance between the
higher return that is potentially available with a higher
level of borrowing, and the benefits and security of a
solid equity position. In seeking this balance, the Board of
Directors’ objective is to not exceed a pre-defined ratio of
debt to EBITDA.
Own shares are purchased by means of a share buy-in
programme through a financial institution operating
under a discretionary mandate. These shares are intended
for issuing shares under the Group’s share option scheme.
Buy and sell decisions are taken on an individual basis
by the Board of Directors, as the Group does not have a
defined share buy-back plan.
No changes were made in the past year to the Group’s
capital management approach.
New standards and interpretations not yet
adopted
A number of new standards, amendments and interpretations were not yet effective in 2009 and are therefore
not applied to the present consolidated financial
statements.
The revised IFRS 3 Business Combinations (2008)
includes the following changes that are probably
relevant for the Group’s activities:
- the definition of a business has been broadened,
which is likely to result in more acquisitions being
treated as business combinations;
- contingent consideration will be measured at
fair value, with subsequent changes therein
recognised in profit or loss;
- transaction costs, other than share and debt issue
costs, will be expensed as incurred;
- any pre-existing interest in the acquiree will
be measured at fair value with the gain or loss
recognised in profit or loss;
- any non-controlling interest will be measured at
either fair value, or at its proportionate interest
in the identifiable assets and liabilities of the
acquiree, on a transaction-by-transaction basis.
The revised version of IFRS 3, which must be applied
to the Group’s 2010 consolidated financial statements,
is prospectively applied and accordingly has no
impact on preceding periods in the consolidated
financial statements 2010.
80 kinepolis group
The revised IAS 27 Consolidated and Separate Financial
Statements (2008) states that changes in the Group’s
controlling interest in a subsidiary, when control is
retained, are recognized as an equity transaction.
If the Group no longer has control of a subsidiary,
any remaining interest in the former subsidiary is
measured at fair value and the resulting profit or loss
is included in the income statement. The changes
to IAS 27, which must be applied to the Group’s 2010
consolidated financial statements, are not expected
to have any impact on the consolidated financial
statements.
IFRIC 17 Distributions of Non-cash Assets to Owners
deals with the recognition of distributions on kind to
shareholders. Distributions of assets that are ultimately
controlled by the same party or parties before and
after distribution (common control transactions)
are outside the scope of IFRIC 17. A liability must be
recognized if the dividend payment is authorized
and is no longer at the discretion of the company, to
be measured at the fair value of the non-cash assets
to be distributed. IFRIC 17, which must be applied to
the Group’s 2010 consolidated financial statements,
with prospective application, is expected to have no
impact on the consolidated financial statements.
IFRIC 18 Transfers of Assets from Customers deals with
the recognition by access providers of property, plant
and equipment contributed to them by customers.
Recognition of the assets depends on who has control
of the asset. If an asset is recognized by an access provider, initial recognition must be at fair value. The time
at which the related revenue is recognized depends
on the facts and the circumstances. IFRIC 18, which
must be applied to the Group’s 2010 consolidated
financial statements, with prospective application,
is expected to have no impact on the consolidated
financial statements.
The amended IAS 39 Financial Instruments: Recognition
and Measurement – eligible hedged items provides
additional guidance concerning specific positions
that qualify for hedging (‘eligible hedged items’). The
amendment, which must be applied to the Group’s
2010 consolidated financial statements, with retroactive application, is expected to have limited impact on
the consolidated financial statements.
The revised IAS 32 Financial Instruments: Presentation
and Classification of Rights Issues, Options or Warrants
allows the classification of these rights, options or
warrants to acquire a fixed number of the entity’s own
equity instruments for a fixed amount of any currency
to be classified as equity instruments provided the
entity offers the rights, options or warrants pro rata
to all of its existing owners of the same class of its
own non-derivative equity instruments. This revision,
which must be applied for the consolidated financial
statements of the Group for 2010, is not expected
to have any impact on the consolidated financial
statements .
and the characteristics of the contractual cash flows of
the financial asset. IFRS 9 must be applied retroactively
to the consolidated financial statements of the Group for
2013. The consequences of this standard for the Group
are currently being assessed.
Improvements to IFRS (2009) is a collection of minor
improvements to existing standards. This collection,
which must be applied to the Group’s 2010 consolidated
financial statements, is expected to have limited impact
on the consolidated financial statements.
The Group has not yet early adopted the following new
standards, changes to existing standards and interpretations, because they would not have any impact on the consolidated financial statements of the Group: amendments
to IFRS 1, amendments to IFRS 2, amendments to IAS 24,
IFRIC 19, amendments to IFRIC 14 and IAS 19.
IFRS 9 Financial Instruments is the first standard issued
as part of a wider project to replace IAS 39 Financial
Instruments. The new standard retains but simplifies
the mixed measurement model and establishes
two primary measurement categories for financial
assets: amortised cost and fair value. The basis of
classification depends on the entity’s business model
2. Segment reporting
Segment information is given for the Group’s geographic
segments. The geographic segments reflect the countries
in which the Group operates. Prices for inter-segment
transactions are determined at arm’s length.
Segment results, assets and liabilities of a particular
segment include those items that can be attributed, either
directly or reasonably, to that segment.
Financial income and cost, income tax expense and their
related assets and liabilities are not monitored by segment
by the Group’s CEOs and CFO.
The capital expenditures of a segment are all costs incurred
during the reporting period to acquire assets that are
expected to remain in use in the segment for longer than
one reporting period.
Geographic segments
The Group’s activities are managed and followed up on a
country-by-country basis. The main geographic markets are
Belgium, France and Spain. The Polish and Swiss activities
are combined in the ‘other’ geographic segment.
In presenting information on the basis of geographic
segments, revenue from the segment is based on the
geographic location of the customers. The basis used for
the assets of the segments is the geographic location of the
assets.
82 kinepolis group
SEGMENT INFO
IN ’000 €
Segment revenue
BELGIUM
31/12/2009
FRANCE
31/12/2008
31/12/2009
SPAIN
31/12/2008
31/12/2008
131 291
118 884
-9 617
-6 118
Revenue
121 674
112 766
61 938
58 068
43 187
41 384
Cost of sales
-88 348
-81 257
-46 241
-46 672
-34 183
-32 290
Gross profit
33 326
31 509
15 697
11 441
9 004
9 094
-8 962
-8 623
-1 235
-1 935
-1 173
-1 275
-11 440
-11 561
-1 453
-1 467
-1 374
-1 099
Inter-segment revenue
Segment profit
61 938
58 113
31/12/2009
43 187
41 384
-2 807
204
1 133
1 584
291
70
10 117
11 530
14 142
9 624
6 748
6 789
2 301
1 901
372
399
221
240
Finance income
Finance cost
Profit before tax
Income tax expense
PROFIT FOR THE PERIOD
Goodwill
7 282
7 281
2 603
2 603
2 374
2 374
101 901
104 232
78 443
81 333
49 336
50 264
33
29
14 951
16 119
287
283
111 517
113 444
96 369
100 454
52 218
53 160
Investment property
Deferred tax assets
Non-current assets
Inventories
Current trade and other receivables
1 617
1 778
248
273
172
197
12 950
11 673
5 815
4 805
665
1 899
14 567
13 450
6 063
5 078
837
2 096
126 084
126 894
102 432
105 532
53 055
55 256
Current tax assets
Current assets
TOTAL ASSETS
84 kinepolis group
OTHER (PL + CH)
31/12/2009
4 427
NOT ALLOCATED
31/12/2008
31/12/2009
TOTAL
31/12/2008
4 614
31/12/2009
31/12/2008
SEGMENT INFO
IN ’000 €
240 843
222 996
Segment revenue
9 617
-6 118
Inter-segment revenue
4 427
4 614
231 226
216 877
Revenue
-3 236
-3 313
-172 008
-163 532
Cost of sales
1 191
1 301
59 218
53 346
Gross profit
-106
-176
-11 476
-12 008
-286
-365
-14 553
-14 493
16
14
-1 367
1 873
815
774
31 822
28 718
Segment profit
4 699
2 512
Finance income
-7 004
-10 902
Finance cost
29 517
20 328
Profit before tax
4 699
2 512
-7 004
-10 902
-7 340
-5 142
1
-7 340
-5 142
Income tax expense
22 177
15 186
PROFIT FOR THE PERIOD
2 894
2 540
6 502
6 502
18 761
18 761
Goodwill
5 906
6 389
235 586
242 218
13 159
14 413
13 159
14 413
Investment property
1 545
1 969
1 545
1 969
Deferred tax assets
908
919
26 475
28 223
12
25
370
419
16 179
17 350
29
2 098
29
2 098
1 574
4 076
288 753
299 349
Non-current assets
9 912
8 309
9 912
8 309
2 049
2 272
Inventories
3 137
6 148
22 937
24 945
154
221
154
221
Current tax assets
20 332
17 288
20 332
17 288
382
444
33 535
31 967
55 384
53 035
Current assets
26 857
28 667
35 109
36 034
343 537
352 383
TOTAL ASSETS
SEGMENT INFO
IN ’000 €
BELGIUM
31/12/2009
FRANCE
31/12/2008
31/12/2009
SPAIN
31/12/2008
31/12/2009
31/12/2008
Issued capital and share premium
Total equity attributable to equity holders
of the company
Equity
Provisions
1 037
1 914
246
85
10 911
12 040
1 914
1 037
11 157
12 125
38 822
28 389
14 593
14 294
6 532
36
1 564
50
Bank overdrafts
Provisions
6 618
Current liabilities
38 822
28 389
14 629
15 858
6 582
6 618
40 736
29 425
25 786
27 983
6 582
6 618
CAPEX
IN ’000 €
Capex
NON-CASH ELEMENTS
IN ’000 €
Depreciation, amortization, provisions and
impairments
Other
TOTAL
86 kinepolis group
BELGIUM
31/12/2009
FRANCE
31/12/2008
10 890
7 583
BELGIUM
31/12/2009
15 085
31/12/2009
SPAIN
31/12/2008
5 015
4 154
31/12/2009
2 685
FRANCE
31/12/2008
11 197
503
589
15 588
11 786
31/12/2009
31/12/2008
2 288
SPAIN
31/12/2008
31/12/2009
31/12/2008
6 157
7 279
3 598
4 383
6 157
7 279
3 598
4 383
OTHER (PL + CH)
31/12/2009
NOT ALLOCATED
31/12/2008
31/12/2009
TOTAL
31/12/2008
31/12/2009
50 117
50 117
50 117
50 117
Issued capital and share premium
82 539
67 394
82 539
67 394
-1 439
-1 394
-1 439
-1 394
131 217
116 116
131 217
116 116
Total equity attributable to equity holders
of the company
1 323
1 190
1 323
1 190
132 540
117 306
132 540
117 306
Equity
86 000
130 000
86 000
130 000
2 886
1 839
Provisions
14 704
13 869
717
726
14 704
13 869
3 253
4 217
20
726
737
650
793
SEGMENT INFO
IN ’000 €
31/12/2008
3 253
4 217
10 911
12 060
103 957
148 086
117 754
161 985
196
2 280
196
2 280
Bank overdrafts
23 500
14 256
23 500
14 256
4 480
2 884
65 220
52 834
86
1 564
Provisions
964
61
964
61
3 277
2 097
3 277
2 097
793
650
32 417
21 579
93 243
73 093
Current liabilities
1 519
1 387
268 914
286 971
343 537
352 383
OTHER (PL + CH)
31/12/2009
NOT ALLOCATED
31/12/2008
190
31/12/2008
147
OTHER (PL + CH)
31/12/2009
31/12/2009
TOTAL
31/12/2009
18 780
NOT ALLOCATED
31/12/2008
31/12/2008
31/12/2009
31/12/2008
14 172
TOTAL
31/12/2009
31/12/2008
23 869
CAPEX
IN ’000 €
Capex
NON-CASH ELEMENTS
IN ’000 €
964
1 010
25 804
Depreciation, amortization, provisions and
impairments
503
589
Other
964
1 010
26 307
24 458
TOTAL
3. Revenue
The table below shows the breakdown of revenue by activity, product or service offered by the Group.
IN ’000 €
31/12/2009
31/12/2008
Box Office
138 574
128 152
In Theater Sales
48 864
46 683
Business-to-Business
31 969
30 918
Film distribution
3 418
2 260
Real estate
8 198
8 611
203
253
231 226
216 877
Technical department
TOTAL
The fall in revenue from real estate is due to the negative evolution of the Polish Zloty in 2009 of € 0.4 million.
4. Other operating income /(expenses)
IN ’000 €
Impairment of property, plant and machinery
Impairment of trade receivables
Government grants
Capital gain on disposal of property, plant and equipment
Other
TOTAL
Impairment of property, plant and equipment
The Group decided to halt the Mediacité multiplex project
(Liege). Project development costs already capitalized at € 0.5
million were written off.
Impairment of trade receivables
A write down of € 1.7 million was recorded in 2009 based on
management’s estimation of the recoverability of outstanding
amounts receivable from Screenvision as at 30 June 2009.
88 kinepolis group
31/12/2009
31/12/2008
-499
-1 700
1 138
1 183
7
169
-313
521
-1 367
1 873
Government grants
In France the Group receives government grants for the
construction of cinema complexes. These subsidies come from a
fund which is financed by contributions from cinema operators
in the form of a percentage of ticket sales. The grants are
recorded as liabilities and taken into income over the useful life
of the assets in question.
5. Personnel expenses
IN ’000 €
Wages & salaries
Social security contributions
31/12/2009
31/12/2008
-27 459
-27 467
-7 730
-7 746
Pension plan contributions (defined contribution)
-322
-185
-503
-588
Other personnel expenses
TOTAL
Total full-time equivalents at balance sheet date
-2 025
-1 569
-38 039
-37 555
955.10
940.49
6. Additional information on operating expenses by nature
Personnel expenses and depreciation and amortization are charged to profit or loss in the following lines of the income statement:
IN ’000 €
31/12/2009
31/12/2008
Personnel expenses
-29 248
-29 147
Cost of sales
- 2 598
-2 463
-6 193
-5 945
-38 039
-37 555
-23 343
-22 542
Other operating income / expenses
TOTAL
Depreciation, amortization and impairment losses
Cost of sales
-219
-229
-732
-1 042
Other operating income / expenses
-493
TOTAL
-24 787
-23 813
Exchange deals in revenue
Revenue includes exchange deals worth € 6.3 million (2008: € 6.2 million).
7. Finance income and cost
FINANCE INCOME
IN ’000 €
31/12/2009
31/12/2008
Interest income
166
337
Net foreign exchange gains
234
309
61
160
Recognition of fair value of derivative financial instruments ended in the past
Changes in fair value of derivative financial instruments
Discount of long-term government grants receivable
Gain on disposal of other financial assets
Other
TOTAL
The use of derivative financial instruments for hedging of
interest and exchange rate risks is discussed further in note 25.
145
926
989
3 000
0
312
572
4 699
2 512
The gain on the disposal of other financial fixed assets
relates to the sale of CinemaxX AG for € 3.0 million.
FINANCE COST
IN ’000 €
31/12/2009
31/12/2008
Interest charges
- 5 603
-7 953
-120
-673
Other
-1 281
-1 468
TOTAL
-7 004
-10 902
31/12/2009
31/12/2008
-4 891
Foreign exchange losses
Changes in fair value of derivative financial instruments
-808
Other finance expenses consist mainly of banking costs.
8. Income tax expense
Recognized in the income statement
IN ’000 €
Current tax expenses
-6 101
Deferred tax
-1 239
-251
TOTAL INCOME TAX RECOGNIZED IN INCOME STATEMENT
-7 340
-5 142
90 kinepolis group
Effective tax reconciliation
IN ’000 €
31/12/2009
31/12/2008
Profit before tax
29 517
20 328
Belgian tax rate
33.99%
33.99%
Income tax using the company’s domestic tax rate
-10 033
-6 910
152
87
Effect of tax rates in foreign jurisdictions
-837
-654
Tax-exempt income
Non-deductible expenses
3 836
2 296
Unrecognised losses
-1 288
218
1 086
-215
-256
36
Under/(over) provided in prior periods
Other adjustments
TOTAL
- 7 340
-5 142
Effective tax rate
24.87%
25.30%
The effective tax rate was 24.87% in 2009 (2008: 25.30%). In 2009
the tax-free profit on the sale of CinemaxX AG had a positive
impact on the tax rate. Otherwise, the tax rate would have
been 28.32%. The notional interest deduction and the tax treatment of tax shelters, both included in ‘Tax-exempt income’, had
a positive impact on the tax burden in both 2008 and 2009.
The decision was taken not to set up any deferred tax receivable (€ 1. 3 million).
For a number of Group companies, the business plans are not
yet sufficiently developed, making any decision on whether
realised losses can be recovered within five years premature.
Deferred income tax recognized directly to equity
Relating to financial instruments to which hedge accounting is
applied:
IN ’000 €
On the effective portion of the change in fair value of the cash flow hedges
Under/(over) provided in prior periods (€ 1.1 million) includes
the refund of tax paid twice pursuant to the Cobelfret ruling
and the related interest.
31/12/2009
31/12/2008
-19
19
9. Other intangible assets
Other intangible assets (other than goodwill)
IN ’000 €
Acquisition value
PATENTS AND
LICENCES
OTHER
INTERNALLY
DEVELOPED
INTANGIBLE ASSETS
TOTAL
1 378
4 681
1 021
7 081
Amortization and impairment losses
-987
-3 414
-409
-4 810
NET CARRYING VALUE 31/12/2007
391
1 267
612
2 270
90
1 039
381
1 510
-1 010
-194
-1 272
Acquisitions
Sales/disposals
Transfer to other categories
32
Amortization
-68
32
Effect of exchange rate fluctuations
Impairment losses
Acquisition value
1 511
5 721
1 401
8 633
- 1 065
-4 425
-602
-6 093
446
1 295
799
2 540
Acquisitions
322
1 077
405
1 804
-113
-1 058
-271
-1 442
-7
-1
Sales/disposals
Amortization
-8
Impairment losses
Acquisition value
1 725
5 899
1 538
9 162
-1 077
-4 585
-605
-6 268
648
1 313
933
2 894
The other intangible assets consist mainly of software. The internally developed intangible assets include the ticketing system.
10.Goodwill
IN ’000 €
Balance at end of previous period
31/12/2009
31/12/2008
18 761
18 761
18 761
18 761
Impairment losses
Disposals
BALANCE AT END OF CURRENT PERIOD
92 kinepolis group
This heading contains the differences expressed at the time
of the first consolidation as at 1 January 1996, and those
arising from the acquisition of participating interests in
subsequent periods.
Goodwill was subjected in 2009 to impairment tests at
country level, the operating segments of the Group, as
opposed to 2008 when the cash flow-generating units
were defined at cinema level. The decision to reassess the
definition of cash flow-generating unit was taken by the new
management, CFO and the reinforced Board of Directors.
The CEOs, CFO and Country Managers manage the Group
primarily at country level. Turnover is managed much more
at Group level and there is greater insight into how different
multiplexes interact:
Movie programming and negotiations with distributors
occur at country level.
A larger part of ticket sales goes through the websites,
which are organised at country level.
Pricing for tickets, refreshments and snacks is set at
country level.
Marketing contributions by distributors are negotiated at
country level.
Screen advertising is managed at country level.
The sale of vouchers goes through the business-to-business
sales teams. The use of the vouchers by the customers runs
through the central back office systems at country level.
Business-to-business events are organised at multiplex and
at country level.
This shows that the incoming cash flows are mainly generated
at country level.
In the impairment test the realizable value or the discounted
cash flow (whichever is greater) was taken into consideration.
The realizable value is based on the valuation made by an
external expert. The discounted cash flows are calculated
over the period 2010-2029. These are based on the 2010-2014
business plan approved by the Board of Directors. For the
years 2015-2029 the business plan was extrapolated based on
consumer indexes (1%) and on key performance indicators
which are inherent to the business plan. The projections were
performed in the cinemas’ functional currency and discounted
at the weighted average cost of the cinema’s capital. This
weighted average cost varied between 6.75% and 7.90% (2008:
between 6.40% and 9.00%). The weighted average cost of
equity before tax varies between 7.90% and 8.16%. These tests
did not lead to the recording of an impairment loss against
goodwill.
The following table shows the goodwill per cash flow generating unit:
IN ’000 €
31/12/2009
31/12/2008
Belgium
7 282
7 282
France
2 603
2 603
Spain
2 374
2 374
Poland
End book year
6 502
6 502
18 761
18 761
11. Property, plant and equipment
IN ’000 €
LAND &
BUILDINGS
MACHINES &
EQUIPMENT
ASSETS UNDER
CONSTRUCTION
TOTAL
Acquisition value
341 748
129 301
1 086
472 135
Depreciation and impairment losses
-129 941
-90 928
NET CARRYING VALUE AT 31/12/2007
211 807
38 373
1 086
251 266
4 639
7 198
826
12 663
-146
-66
-1
-212
-644
Acquisitions
Sales / disposals
-220 869
Transfer to assets classified as held for sale
611
1
-12 727
-9 384
547
117
-19
Acquisition value
347 348
136 236
1 248
-142 617
-99 997
204 731
36 239
1 248
242 218
4 307
11 492
1 156
16 955
-65
-11
-36
-112
Depreciation
-32
-22 111
644
Other movements
Impairment losses
Acquisitions
Sales / disposals
484 833
-242 615
-395
-395
469
-90
-502
-123
-12 393
-10 092
-484
-22 969
17
-3
-2
12
Acquisition value
342 989
128 917
1 392
473 298
-146 318
-91 382
-12
-237 712
196 671
37 535
1 380
235 586
Depreciation
Other movements
Impairment losses
Purchases
The acquisitions under Machines & Equipment consist primarily
of the digital projectors and the remodelling of a number of
complexes.
94 kinepolis group
Leased buildings, machinery and equipment
In January 2007 the activities in Poland were transferred to ITIT.
ITIT leases the cinema multiplex in Poland, which is still owned
by Kinepolis.
All finance lease agreements of machinery and equipment in Spain
have ended on 31 December 2009. The purchase options foreseen
in these agreements were taken up. The Group now owns these
assets. At 31 December 2008 the carrying value of the leased
machinery and installations was € 2.9 million.
12.Investment property
IN ’000 €
LAND &
BUILDINGS
MACHINES &
EQUIPMENT
ASSETS UNDER
CONSTRUCTION
TOTAl
Acquisition value
18 107
664
-3 305
-458
-3 763
Net carrying value at 31/12/2007
14 802
206
15 008
Acquisitions
6
Sales / disposals
18 771
1
7
-3
-3
Depreciation
1 958
1 958
-368
-62
-430
-2 108
-19
-2 127
Other movements
Impairment losses
Acquisition value
17 438
564
18 002
-3 148
-441
-3 589
14 290
123
14 413
22
22
Net carrying value at 31/12/2008
Acquisitions
Sales / disposals
-1 144
-1 144
123
123
Depreciation
-300
-76
-376
115
6
121
16 475
515
16 990
Other movements
Impairment losses
Acquisition value
NET CARRYING VALUE at 31/12/2009
-3 514
317
-3 831
12 961
198
13 159
Since 18 January 2007 the land, buildings and equipment at Poznan
(Poland) are no longer used for Kinepolis’ own operations, but have
been leased out to Cinema City, owned by the cinema group ITIT.
In 2009 part of the land in Poznan (Poland) was transferred to ‘assets
classified as held for sale’, because this land will most likely be sold
within the year (€ 1.1 million).
As required by IAS 40 (investment property), the assets in question
have been reclassified under this heading.
The rental income from investment property amounts to € 1.6 million (2008: € 1.5 million). The direct operating charges (including
repairs and maintenance) ensuing from investment property
amounted to € 0.5 million (2008: 0.4 million).
In 2008, ‘Transfer to other categories’ comprised a part of the land in
Poznan (Poland) that was previously recognized under ‘assets classified
as held for sale’ (€ 2.0 million) . There was no longer any expectation of
this land being sold within the year. In accordance with IAS 40, this land
is being held to realise a profit in the long term.
The fair value of the investment property as recently determined
by an independent expert amounts to € 18.1 million
(2008: € 18.0 million).
13.Deferred tax
Recognized deferred taxes
IN ’000 €
31/12/2009
31/12/2008
Deferred tax assets
Property, plant and equipment and other intangible assets
1 385
1 533
Investment grants receivable
2 388
2 639
322
346
3 111
4 518
Government grants
Derivative financial instruments through equity
Tax losses carried forward and other deferred tax assets
19
TOTAL
7 206
9 056
Tax offsetting
-5 661
-7 087
Deferred tax assets
1 545
1 969
-18 513
-18 674
-144
-140
-1 708
-2 142
-20 365
-20 956
5 661
7 087
-14 704
-13 869
Property, plant and equipment and other intangible assets
Provisions
Government grants
Derivative financial instruments through profit or loss
Derivative financial instruments through equity
TOTAL
Tax offsetting
96 kinepolis group
Temporary differences for which no deferred tax assets
are recognized
No deferred tax asset is recognized in the balance sheet in respect of tax losses carried forward and temporary differences that
would result in a deferred tax asset in an amount of € 36.3 million
(2008: € 38.9 million) given it is not probable that future taxable
profit will be available against which the group can utilize the
benefits of that.
The tax losses carried forward can be carried forward to an
unlimited degree for Belgium, France and the Netherlands. In
Poland and Switzerland the losses can be carried forward for
5 and 7 years.
Temporary differences for which no deferred tax liabilities
are recognized
There is no Group policy with respect to the payment of
dividends by subsidiaries to the parent company. If an active
dividend policy were to exist for all subsidiaries, this would
require an additional deferred tax liability of € 2.5 million
(2008: € 1.0 million).
14.Inventories
IN ’000 €
Raw materials and consumables
31/12/2009
31/12/2008
73
83
Goods purchased for resale
1 976
2 189
TOTAL
2 049
2 272
In addition to goods purchased for resale in the multiplexes
for € 1.1 million (2008: € 1.1 million), inventories also include the
inventory of spare parts of the Group’s technical department
for an amount of € 0.9 million (2008: € 1.1 million).
The cost of sales of inventories recorded in the income statement in 2009 is € 19.9 million (2008: € 17.6 million).
15.Trade and other receivables
IN ’000 €
Cash guarantees
31/12/2009
31/12/2008
330
322
Other receivables
15 849
17 028
TOTAL
16 179
17 350
The non-current other receivables partly relate to a receivable
of € 0.9 million from the cinema group ITIT in relation to the
transfer of the activity in Poland to this group (2008: € 0.9 million). This receivable is payable in January 2012 and is guaranteed
by a Corporate Guarantee.
The remaining other non-current receivables (€ 14.9 million)
relate to the sector-related government grants obtained in
France (2008: € 16.1 million).
IN ’000 €
31/12/2009
31/12/2008
13 960
13 364
Taxes receivable, other than income taxes
Trade receivables
3 137
6 149
Deferred charges and accrued income
2 181
2 322
590
623
Tax shelter receivables
Other receivables
TOTAL
Tax shelter receivables
The tax shelter receivables consist of loans granted to third
parties to finance audiovisual works.
3 069
2 487
22 937
24 945
Other current receivables
The other current receivables consist primarily of the short-term
portion of the French government grants. These other current
receivables contain no financial assets.
The ageing of the current and non-current trade and other receivables can be summarized as follows:
IN ’000 €
GROSS 2009
Net carrying value
39 116
Not yet due on reporting date
IMPAIRMENT
2009
gross 2008
IMPAIRMENT
2008
42 295
31 416
-9
36 264
-4
Less than 30 days past due
5 688
-17
3 012
-24
Between 31 and 120 days past due
1 550
-153
1 661
-85
Between 120 days and 1 year past due
1 192
-880
1 069
-407
Over 1 year past due
4 409
-4 080
3 927
-3 118
44 255
-5 139
45 933
-3 638
TOTAL
In 2009 an impairment of € 1.7 million was recognized with respect to the outstanding receivable from Screenvision on 30 June
2009 (in the category ‘over 1 year past due’). This impairment
98 kinepolis group
is based on the estimation of the collectability of the outstanding
amounts by Group management.
The movement on the allowances for impairment in respect of trade receivables can be summarized as follows:
IN ’000 €
2009
2008
Situation at 1 January
- 3 638
-3 740
Recognized and utilized impairment losses
-1 498
73
-3
29
-5 139
-3 638
Situation at 31 December
No impairment allowance has been taken on past-due amounts where collection continues to be deemed likely. For the financial assets
other than trade receivables there is no ageing problem.
16.Cash and cash equivalents
IN ’000 €
31/12/2009
31/12/2008
Cash at bank and in hand
20 332
17 288
TOTAL
20 332
17 288
Bank overdrafts considered as cash and cash equivalents in the statement of cash flows
-196
-2 231
20 136
15 057
31/12/2009
31/12/2008
0
2 070
Other
29
28
TOTAL
29
2 098
CASH AND CASH EQUIVALENTS IN THE STATEMENT of cash flows
17. Other financial assets
IN ’000 €
Financial assets available for sale
Financial assets available for sale
The financial assets classified as available for sale
consisted in 2008 of Kinepolis’s share in CinemaxX AG.
This investment was recorded at fair value. In January 2009
Kinepolis Group nv sold its 12.61% minority stake (3 million
shares) in the German cinema group CinemaxX AG to
H+Z Beteiligungs GmbH at a price of € 1.00 per share. The
share transfer was completed in three equal parts, on
30 January, 30 April and 31 July 2009, each against receipt
of a third of the sale price.
The transaction generated a profit for Kinepolis Group nv
in 2009 equal to the sales price (€ 3.0 million).
18.Assets classified as held for sale
IN ’000 €
Balance at end of previous period
31/12/2009
31/12/2008
8 309
10 234
1 539
-1 958
Acquisitions
Sales and disposals
Transfer to/from other categories
Other movements
BALANCE AT END OF CURRENT PERIOD
The assets held for sale on 31 December 2009 consist of land in
Valencia (Spain), the former cinema Opéra in Liège (Belgium),
land in Poznan (Poland) and land and a building in Gent
64
33
9 912
8 309
(Belgium). Efforts to dispose of these assets are ongoing. The
sales are expected to take place within the year.
19.Total equity
The various components of equity and the changes
between 31 December 2008 and 31 December 2009 are set
out in the Consolidated Statement of Changes in Equity.
Issued capital
The share capital of the Company amounts to € 49.0
million at 31 December 2009 (2008: € 49.0 million),
represented by 6 930 778 ordinary shares without nominal
value. All shares are paid up in full. The share premium
at 31 December 2009 amounts to € 1.2 million (2008: € 1.2
million). Ordinary shareholders are entitled to dividends as
declared from time to time and to cast one vote per share
at the Company’s shareholder meetings.
On 31 December 2009 the Group owned 277 231 of its
own shares (2008: 211 118). The authorization of the Board
100 kinepolis group
of Directors to increase the share capital in one or more
instalments to a maximum of € 48 883 132.15 was renewed
by the Extraordinary General Meeting of shareholders of 18
May 2007 for five years until 7 June 2012. The authorization
to increase the share capital after notification of a public
takeover bid was also renewed by the Extraordinary
General Meeting of shareholders of 18 May 2007 for three
years until 17 May 2010.
Hedging reserve
The hedging reserve contains the effective portion of the
cumulative net change in the fair value of the cash flow
hedges in respect of which the hedged future transaction
has not yet taken place.
Translation reserve
The translation reserve includes all exchange rate
differences resulting from the translation of the financial
statements of foreign entities.
lion or € 0.66 per share). This dividend has not yet been
approved by the General Meeting of Shareholders of
Kinepolis Group nv and is for this reason not yet included
in the consolidated financial statements.
At 31 December 2009 a total of 237 924 options were allocated. These options entitle their holders to one share per
option (see note 21). The options will expire ten years after
the date of approval of the Plan by the Board of Directors,
which is 5 November 2017.
Treasury shares
On 31 December 2008 the Group owned 211 118 treasury
shares. During 2009 an additional 66 113 shares were
purchased, which brought the total number to 277 231 at
31 December 2009. Own shares have been purchased in
view of the 2007-2016 share option plan.
Dividends
On 24 February 2010 a dividend of € 6.1 million or € 0.92 per
share with respect to 2009 was proposed (2008: € 4.4 mil-
20.Earnings per share
IN ’000 €
Profit attributable to equity holders of the company
Weighted average number of ordinary shares
Effect of warrants
Weighted average number of ordinary shares (diluted)
31/12/2009
31/12/2008
22 044
15 111
6 655
6 819
4
6 659
6 819
Basic earnings per share (in €)
3.31
2.22
Diluted earnings per share (in €)
3.31
2.22
Basic earnings per share
The basic earnings per share are based on the profit
of € 22.0 million attributable to equity holders of the
Company (2008: € 15.1 million) and on a weighted average
number of 6 655 040 ordinary shares outstanding during
the year (2008: 6 819 329).
Diluted earnings per share
The diluted earnings per share are based on the profit of
€ 22.0 million attributable to equity holders of the Company
(2008: € 15.1 million) and on a weighted average number of
6 658 679 diluted ordinary shares outstanding during the
year (2008: 6 819 329).
21.Share based payments
Share based payments plan
On 5 November 2007 the Board of Directors approved a share
based payments plan to encourage and reward selected
Directors and executives who are able to contribute to the success and to the long-term growth of the Group. 277 231 options
can be allocated under this plan.
At the Board meeting of 18 December 2007 it has been decided
to set the exercise price at the average stock market price of the
30 days preceding the offer. The option will expire 10 years after
the date of its approval by the Board of Directors.
€ UNLESS STATED OTHERWISE
Fair value of allocated options
Exercise price
Expected volatility
Expected term (in years)
Expected dividend growth
Risk-free interest
The expected volatility is based on the historic volatility
calculated on the basis of five years of historic data.
The options can be exercised for the first time during the
first exercise term, which falls in the fourth calendar year
after the year in which the options were offered to the
102 kinepolis group
The total number of allocated options of the share option
plan on 31 December 2009 was 237 924 (2008: 207 924). 30 000
additional options were allocated in 2009. No options were
exercised or waived.
The fair value of these share-based payments was estimated
when the options were allocated, using a Trimoniam (American
type call option) valuation model.
08/2009
02/2009
03/2008
8.65
2.55
10.00
23.24
15.07
28.18
41%
35%
31%
6
6
8
10%
10%
10%
3.30%
3.20%
4.70%
participants. The options awarded in 2008 can be acquired
in tranches of 12.5% per year on each anniversary of the
allocation date. The options awarded in 2009 can be acquired
in tranches of 16% per year during the first five years after
allocation, the final tranche of 20% can be acquired in the
sixth year after allocation.
22.Interest-bearing loans & borrowings
This note provides information on the contractual stipulations of
the Group’s interest-bearing loans and borrowings.
For further information on the Group’s exposure to interest and
exchange rate risks, see note 25.
Non-current loans and borrowings
IN ’000 €
31/12/2009
31/12/2008
Leasing and similar liabilities
Guaranteed loans and borrowings with credit institutions
86 000
130 000
TOTAL
86 000
130 000
31/12/2009
31/12/2008
14 000
14 000
Current loans and borrowings
IN ’000 €
Leasing and similar liabilities
253
Other loans and borrowings
TOTAL
9 500
3
23 500
14 256
The first tranche of € 9.5 million of the Commercial Paper programme (launched in the autumn of 2009) was collected at the end of
2009. This amount is included in Other loans and borrowings.
Finance lease liabilities
The Group no longer had any finance lease liabilities in 2009. In 2008 the future minimum lease payments amounted to:
IN ’000 €
Less than one year
PAYMENTS
2008
INTEREST
2008
CAPITAL
2008
258
5
253
258
5
253
Between one and five years
More than five years
TOTAL
23.Provisions
IN ’000 €
2009
2008
Balance at 1 January
3 403
3 565
Provisions set up
1 150
629
Use of provisions
Reversal of provisions
-63
-284
-1 529
-390
11
-117
Balance at 31 December
2 972
3 403
Net carrying value at end of period (non-current)
2 886
1 839
86
1 564
2 972
3 403
Net carrying value at end of period (current)
TOTAL
The provisions primarily relate to the reinstatement of land, costs
of transformation, a provision for author’s rights in Poland and a
number of minor disputes.
Reinstatement of land
The Brussels cinema complex’s lease on the land owned by the
City of Brussels ends in 2025. The Company has a contractual
obligation to restore the land to its original state. At 31 December
2009 the balance sheet included a provision of € 0.9 million for the
demolition of the building and to restore the land to its original
state (2008: 0.9 million).
Transformation
The Group set up a provision for the transformation of the
organisation in the amount of € 0.8 million.
104 kinepolis group
Author’s rights in Poland
A provision or the collection of authors’ rights still exists in
the Polish company, previously responsible for operating the
multiplex in Poznan. This provision amounted to € 0.6 million
on 31 December 2009 (2008: € 0.7 million).
VAT on food and beverages in France
In 2009 the VAT law was amended in France, lowering the
VAT rate on the sale of refreshments and snacks. This had an
impact of € 1.5 million in 2009.
24.Trade and other payables
Non-current trade and other payables
IN ’000 €
31/12/2009
31/12/2008
Other payables
10 911
12 060
TOTAL
10 911
12 060
The other non-current payables consist primarily of the government grants received in France. These government grants,
amounting to € 10.6 million (2008: € 11.7 million), are recognized
as other operating income in line with the depreciation of the
assets for which these grants were obtained.
Current trade and other payables
IN ’000 €
Trade payables
31/12/2009
31/12/2008
35 978
31 084
Employee benefits
6 576
5 648
Taxes payable, other than income taxes
4 480
2 884
Tax shelter payables
Advances received for contracts in progress
Accrued charges and deferred income
Other payables
TOTAL
The accrued charges and deferred income primarily relate to
ticket prepayments.
Other payables
The increase in the other payables is due to the higher royalties
payable to distributors at the end of December 2009, as a conse-
575
510
2 142
361
13 496
11 911
1 973
436
65 220
52 834
quence of the large number of movies distributed by Kinepolis
Film Distribution just before the end of the year.
Advances received for contracts in progress
The rise in advances received for contracts in progress concerns
advances received with regard to the project development of
apartments on the Kinepolis Gent site.
25.Financial instruments
Financial risk management
The Group’s principal financial instruments are bank loans,
finance leases and cash.
The Group has various other financial instruments such as
trade debtors and creditors, which arise directly from its
operations.
The Group also enters into derivative transactions, principally FRAs, interest rate swaps and cross currency interest
rate swaps. The purpose is to manage the interest rate and
currency risks arising from the Group’s activities and its
sources of financing.
It is Group policy not to undertake any trading positions in
derivative financial instruments.
The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk, foreign currency
risk and credit risk. It is Group policy to negotiate the terms
of the hedge derivatives to match the terms of the hedged
item so as to maximize hedge effectiveness.
The Board of Directors investigates and approves policies
for managing each of these risks. These policies are summarized below. The Group’s accounting policies in relation
to derivatives are set out in the accounting policies.
Interest rate risk
The Group’s exposure to market risk for changes in interest
rates primarily relates to the Group’s short and long-term
loans and borrowings.
106 kinepolis group
Group policy is to manage interest rate costs with a
mixture of fixed and variable interest rate liabilities. To
manage this mix in a cost-efficient manner, the Group
enters into:
a) interest rate swaps and FRAs in which the Group
agrees to exchange, at specified intervals, the difference
between fixed and variable interest amounts calculated
by reference to a pre-agreed principal amount.
b) interest rate derivatives with fixed ceilings, hence
limiting the impact of interest rate movements whilst
leaving the opportunity to benefit from low short term
floating interest rates.
At balance sheet date the Group had interest rate swaps
outstanding, on which the Group receives a variable interest rate equal to EURIBOR, and on which it pays a fixed
interest rate. These swaps are used to cover the variability
in the cash flows of the underlying loans.
In accordance with the IAS 39 hedge accounting these
interest rate swaps are determined as cash flow hedges.
Therefore the effective portion of the change in fair value
of the interest rate swaps is recognized directly in equity.
The changes in fair value of the interest rate swaps recognized in equity give a loss of € 0.1 million at 31 December
2009 (2008: a loss of € 3.6 million).
Kinepolis pursues a conservative financial policy. To hedge
interest risk, since 2008 Kinepolis uses only derivative
financial instruments whose movements in fair values are
offset directly against equity and have no impact on the
income statement (hedge accounting).
All interest rate derivatives deemed to be freestanding were
ended in 2008. This generated a profit of € 0.1 million recognised
in the 2009 income statement (2008: € 0.2 million).
At 31 December 2009, after taking into account the effect of interest rate swaps, 96% of the Group’s borrowings were recognized
at a fixed interest rate (2008: 70% at fixed interest).
Interest risk sensitivity analysis
The interest-bearing loans amounted at balance sheet date to €
109.7 million (2008: € 146.5 million). All interest-bearing loans have
a variable interest rate, as was also the case in 2008.
The total interest charged to the income statement for 2009,
including the realised gains on derivative interest rate instruments, amounted to € 5.6 million (2008: € 8.0 million).
According to the company’s estimates the market interest
rate applicable to the variable interest rate can reasonably be
expected to change as follows:
Euribor 3 M
INTEREST
RATE
31/12/2009
THEORETICAL
VOLATILITY
POSSIBLE INTEREST RATE
31/12/09 AS USED FOR THE
SENSITIVITY ANALYSIS
0.70%
20%
0.56% – 0.84%
Applying the possible increases/decreases in the market
interest rates as given above to our variable rate borrowings at 31 December 2009, and all other variables being
constant, the 2009 profit would be € 0.2 million lower/
higher (2008: € 0.8 million). We have estimated that this
effect would be partially neutralized by the € 0.1 million
higher or lower interest income from interest rate derivatives (2008: € 0.6 million).
Foreign currency risk
The Group has a foreign currency risk on positions
deriving from sales or purchases and from outstanding
borrowings by group companies in currencies other
than the functional currency (EUR) (transaction risk).
Group policy is focused on minimising the impact on
profit of exchange rate fluctuations. Derivative financial
instruments are used to immediately hedge any
transactional exchange rate risk upon identification.
Less than 1% of the Group’s sales and purchases are
denominated in currencies other than the functional
currency (2008: 1%).
Loans between Kinepolis Financial Services nv and
other group companies are expressed in the currency
of the latter. The loans in CHF and PLN from Kinepolis
Financial Services nv to Kinepolis Schweiz and Kinepolis
Poznan Sp.z.o.o are hedged with cross-currency
interest rate swaps. These instruments are viewed as
freestanding. The changes in the fair value of the CCIRSs
are therefore recognized in the income statement.
The total of the changes in the fair value of the CCIRS
resulted in a loss of € 0.1 million in 2009 (2008: a profit of
€ 1.5 million). The revaluation of the above mentioned
loans resulted in a profit of € 0.2 million in 2009 (2008: a
loss of € 1.5 million).
The Group also incurs a foreign currency risk from
consolidating foreign companies not having the EUR as
their functional currency (Switzerland and Poland). This
conversion risk is not hedged.
At 31 December 2009, the Group had hedged 76% (2008: 82%)
of its foreign currency exposure for which fixed commitments
existed on the balance sheet date.
In the table below the foreign currency risks to which the Group
is exposed are given on the basis of the notional amounts.
IN ’000 €
31/12/2009
PLN
Borrowings
Interest rate swaps in different currencies (CCIRS)
Net exposure
Currency risk sensitivity analysis
A. Foreign currency translation risk
Only 2% of the income of Kinepolis is realized by subsidiaries
which undertake their activities in a currency other than the
euro. When the financial data of these entities is converted
into the Kinepolis presentation currency, which is the euro,
1 EURO IS EQUAL TO:
31/12/2008
CHF
PLN
CHF
59 626
12 265
60 965
12 917
-50 750
-7 498
-55 250
-8 861
8 876
4 767
5 715
4 056
a translation risk occurs. The currencies in which Kinepolis’s
subsidiaries operate are the Polish zloty and the Swiss franc.
Based on a theoretical volatility of these currencies against the
euro we have estimated the potential change in the exchange
rates of these currencies against the euro as follows:
CLOSING RATE
31/12/09
AVERAGE RATE 2009
THEORETICAL
VOLATILITY
POSSIBLE CLOSING
RATE 31/12 /09
POSSIBLE AVERAGE
RATE 2009
Polish zloty
4.1082
4.3373
20%
3.2866 - 4.9298
3.4698 – 5.2048
Swiss franc
1.4836
1.5102
20%
1.1869 – 1.7803
1.2082 – 1.8122
B. Foreign currency transactional risk
Most of Kinepolis’s financial instruments are expressed in the
company’s operating currencies. Where this is not the case,
derivatives are used in order to cover the foreign currency risk.
For 2009 the transactional currency risk consists primarily of
loans in currencies (PLN and CHF) other than the company’s
operating currency. The currency risks on these loans are
covered by EUR variable / CHF variable and EUR variable /
PLN variable interest rate swaps (CCIRS) in a total amount of
€ 16.8 million with final maturities in 2012, 2014 and 2015.
If at the balance sheet date the Polish zloty and the Swiss
franc had weakened/strengthened as above, and all other
108 kinepolis group
variables being constant, the 2009 profit would have
been € 1.2 million higher (2008: € 0.9 million) or € 0.8 lower
(2008: € 0.6 million).
Credit risk
The credit risk with respect to trade receivables is the
risk of financial loss to the Group if a customer fails to
meet its contractual obligations. It is Group policy that all
customers who wish to trade on credit terms are subject
to credit verification procedures. In addition, receivable
balances are monitored on an ongoing basis. The Group
accounts for impairments provisions in the amount of the
estimated losses in relation to trade receivables. These are
specific provisions for individually significant positions.
With respect to the credit risk arising from the other
financial assets of the Group, including cash and cash
equivalents, available-for-sale financial assets and certain
derivative instruments, the Group’s exposure to credit
risk consists of the counterparty default risk, with a
maximum exposure equal to the carrying amount of these
instruments.
Except for Screenvision nv, for which a provision has been
set up, there are no significant concentrations of credit risk
within the Group.
The extent of the Group’s credit risk exposure is represented by
the aggregate balance of the financial assets. The maximum
nominal credit risk in the event that all parties were to fail to
meet their obligations amounted at 31 December 2009 to
€ 59.5 million (2008: € 61.7 million).
Liquidity risk
The Group seeks to maintain a balance between continuation in
funding and flexibility through the use of credit lines, bank loans
and finance leases. Group liquidity is managed through the
in-house bank, Kinepolis Financial Services.
IN ’000 €
CARRYING VALUE
31/12/2009
Bank overdraft
31/12/2008
31/12/2009
2 280
196
FAIR VALUE
31/12/2008
2 280
196
0
253
0
253
Interest-bearing loans– variable interest
109 500
144 003
109 500
144 003
TOTAL
109 696
146 536
109 696
146 536
Fair value
Fair value is the amount at which an asset can be traded or
a liability settled between well-informed, willing parties,
following the ‘arm’s length’ principle. The table below gives
the fair value and the carrying value of the main interestbearing financial loans and borrowings.
The fair value of interest rate derivative financial instruments
is determined by discounting the expected future cash
flows based on current market interest rates and the interest
rate curve for the remaining life of the investment. The fair
IN ’000 €
value of forward foreign exchange contracts is calculated
as the discounted value of the difference between the
contract value and current forward exchange rates.
The table below gives the nominal or contractual amounts
and the clean fair value of all outstanding derivative
financial instruments. The nominal or contractual amounts
reflect the volume of the derivative financial instruments
outstanding at balance sheet date. As such they do not in
any way represent the Group’s risk on these transactions.
NOMINAL OR CONTRACTUAL AMOUNT
31/12/2009
Forward Exchange Contracts
Interest swaps with different currencies (CCIRS)
31/12/2008
FAIR VALUE
31/12/2009
771
31/12/2008
-56
16 811
18 713
-1 297
-1 215
Interest swaps
105 000
101 914
-2 920
-3 008
TOTAL
121 811
121 398
-4 217
-4 278
For other financial assets and liabilities, the fair value is equal to the carrying value.
The fair value of these derivative financial instruments is included in the Group’s balance sheet as follows:
IN ’000 €
ASSETS
31/12/2009
LIABILITIES
31/12/2008
31/12/2009
Non-current
NET VALUE
31/12/2008
31/12/2009
31/12/2008
-3 253
-4 217
-3 253
Current
-964
-61
-964
- 4 217
-61
TOTAL
-4 217
-4 278
-4 217
-4 278
Fair value hierarchy
The table below provides an overview of financial instruments
carried at fair value by valuation method. The different levels
have been defined as follows:
Level 2: inputs other than quoted prices included in Level 1 that
are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
Level 1: quoted prices (unadjusted) in active markets for identical
assets or liabilities.
Level 3: inputs for the asset or liability that are not based on
observable market data (unobservable input).
IN ’000 €
31/12/2009
Level 1
Level 2
31/12/2008
Level 3
Level 1
Level 2
Level 3
Financial instruments at fair value through profit and
loss
Forward exchange contracts
Interest swaps with different currencies (CCIRS)
-56
-1 297
-1 215
Cash flow hedging
Interest swaps (cash flow hedging)
-2 920
-3 008
TOTAL
-4 217
-4 278
Debt portfolio
Under the Syndicated Loan Agreement (€ 175 million) of
26 November 2004, amended on 13 July 2007, Kinepolis Group
granted pledge mandates on business assets and mortgage
mandates on property in the amount of the outstanding
financial debt. These mandates can be converted into actual
pledges only if Kinepolis Group fails to meet certain commitments under the Loan Agreement.
110 kinepolis group
The Term and Revolving Facilities Agreement contains
certain financial covenants, including a maximum leverage ratio, a minimum interest coverage and a minimum
solvency ratio, as well as a number of potentially restrictive undertakings limiting or preventing specific business
transactions. These covenants were attained in both 2008
and 2009.
In the autumn of 2009 a Commercial Paper programme was
issued with a maximum value of € 50 million for short-term
financing purposes. On 31 December 2009 the first tranche of
€ 9.5 million was taken up. The Syndicated Loan functions as
back-up financing. It is a flexible alternative to bank financing,
comparable with a short-term corporate bond. The interest
IN ’000 €
payable is calculated on the basis of the EURIBOR applicable to the
selected borrowing period plus the negotiated margin.
Financial liabilities – future cash flows
The table below gives an overview of the contractual maturities for
the financial liabilities, including the estimated interest.
1 YEAR OR LESS
(2009)
1-5 YEARS
(2009)
MORE THAN 5
YEARS (2009)
TOTAL
(2009)
Non-derivative financial liabilities
Trade payables
Third part current account payables
Bank overdrafts
35 978
35 978
575
575
1 535
1 535
196
196
15 621
91 656
107 277
9 661
9 661
Financial derivatives
Interest rate swaps
CCIRS
TOTAL
IN ’000 €
1 936
892
2 828
508
1 523
2 031
66 010
94 071
160 081
1 YEAR OR LESS
(2008)
1-5 YEARS
(2008)
MORE THAN 5
YEARS (2008)
TOTAL
(2008)
Non-derivative financial liabilities
Trade payables
Third party current account payables
Bank overdrafts
Leasing and similar rights
31 084
31 084
510
510
119
119
2 280
2 280
253
253
14 518
131 588
19 469
3
165 575
3
Financial derivatives
Interest rate swaps
CCIRS
Forward exchange agreements
TOTAL
1 494
2 465
296
988
92
3 958
1 376
135 040
19 561
205 214
56
50 613
56
In respect of interest-bearing loans and borrowings, the following table indicates the periods in which they reprice.
IN ’000 €
31/12/2009
TOTAL
Syndicated loan
31/12/2008
< 1 year
100 000
TOTAL
100 000
Bank overdrafts
Commercial Paper
196
196
9 500
9 500
109 696
109 696
Other borrowings
TOTAL
Hedging activities
The Group uses derivative financial instruments to hedge
underlying transactional currency exposure and the interest rate
risk. All derivative financial instruments are valued at marked
IN ’000 €
< 1 year
144 000
144 000
253
253
2 280
2 280
3
3
146 536
146 536
to market. The following table gives the remaining term of the
outstanding derivative financial instruments at closing date. The
amounts given in this table are the notional amounts.
< 1 yeaR (2009)
1-5 yeAR (2009)
5 yeAR (2009)
TOTAL (2009)
2 925
13 886
16 811
50 500
54 500
105 000
< 1 yeAR (2008)
1-5 yeAR (2008)
Foreign currency
Cross Currency Interest Rate Swaps
Interest rate
Interest rate swaps
IN ’000 €
5 yeAR (2008)
TOTAL (2008)
Foreign currency
Forward Exchange Contracts
Cross Currency Interest Rate Swaps
771
771
1 902
16 811
18 713
1 914
100 000
101 914
Interest rate
Interest rate swaps
112 kinepolis group
26.Operating leases
Lease as Lessee
Non-cancellable operating lease rentals are payable as follows:
IN ’000 €
31/12/2009
31/12/2008
Less than one year
2 167
2 129
8 996
8 968
15 178
16 284
TOTAL
26 341
27 382
2 149
2 129
Rental expense in the income statement in respect of operating leases
The lease as lessee concerns the cinema multiplex in Valencia
(Spain), which is leased over a term of 40 years. There is a option
to terminate the contract after 20 years.
IN ’000 €
Leases as Lessor
The Group has leased out parts of its property under
operating leases. The future minimum lease payments under
non-cancellable leases are as follows:
31/12/2009
31/12/2008
Less than one year
5 133
5 545
9 846
9 057
8 329
9 335
23 308
23 938
6 579
6 714
TOTAL
Rental income in the income statement in respect of operating leases
The properties leased out consist on the one hand of the
concessions, but the largest part of this amount consists of the
multiplex in Poznan (Poland) that has been leased to Cinema
City. The lease on the complex in Poland started in January 2007
and for a period of 10 years (extendable by 5 years). The rent consists of a fixed and a variable portion, the latter is expressed as a
percentage of Box Office turnover. This variable rent amounted
to € 0.7 million in 2009 (2008: € 0.7 million).
27.Capital commitments
There were no capital commitments at the end of 2009.
28.Contingencies
Purchase option granted to a third party on land in
Valencia next to Kinepolis Paterna, Spain.
On 30 September 2008 the decision of Oostende’s
(Belgium) local authority’s to grant planning permission
to build the Kinepolis multiplex in the town was annulled
by the Council of State. Oostende’s local authority is
working with due speed on a draft municipal spatial plan
(GRUP) and an environmental impact report for the area in
question, after which a new planning permission can be
granted to regularise Kinepolis Oostende’s situation. The
Group also has complete confidence in the favourable
outcome of the civil restoration claim brought before the
court of first instance in Brugge by an owners’ association
of a neighbouring apartment block.
The minority shareholders in Forvm Kinepolis (Nîmes, France)
have a put option on its shares, as soon as their shareholding
falls under 20%. The price is dependent on EBITDA.
Sale, subject to fulfilment of conditions precedent, of part of
the land in Poznan adjacent to Kinepolis Poznan (Poland).
A building right was assigned to a third party to build
apartments, studios, ... on the land next to Kinepolis Gent
(Belgium). In exchange for a part of the land, the Company
will acquire a percentage of these apartments and studios.
A sales agreement under suspensive conditions was signed
with respect to the sale of part of the buildings adjacent to
Kinepolis Gent (Belgium).
29.Related parties
Identity of related parties:
There is a related party relationship between the Group, its subsidiaries, its directors and management in key positions.
Transactions with managers in key positions:
1. The managers in key positions are the Group’s two CEOs.
2. The remuneration of managers in key positions is as follows:
IN ’000 €
Short-term employee benefits
31/12/2009
31/12/2008
1 192
940
503
588
The CEOs and the President took part in the 2006-2017 Group share option plan (Incentive Plan) (see Note 21) (207 924 options).
114 kinepolis group
3. Directors’ remuneration
IN ’000 €
Directors’ remuneration
31/12/2009
31/12/2008
351
322
4. Related party transactions:
A loan amounting to € 0.2 million in total at 31 December
2009 was granted to three directors. The interest rate applicable on these loans is the average annual interest paid by the
Company plus 10 base points.
Kinohold BIS sa performs certain administrative duties for the
Group for which it charges a fee at the market rate.
An annual fee of € 0.2 million is paid to Pentascoop nv, whose
permanent representative is Mrs M.S. Bert-Vereecke,
in accordance with agreements reached at the time of
Kinepolis Group nv’s formation and for as long as Mrs M.S.
Bert-Vereecke is a member of the Board of Directors, for
the contribution of Mrs M.S. Bert-Vereecke in the Group’s
development as a founder and her contribution of industry
knowledge.
Kinohold BIS sa subscribed to the Commercial Paper
programme in the amount of € 2.5 million at market rates.
30.Subsequent events
The Group has taken note of the planned development
and repurposing of the Heysel plateau by the municipality
of Brussels.
Kinepolis is deliberating the acquisition of Screenvision
Belgium. The acquisition conditions are still not met.
Kinepolis remains committed to keeping the Belgian
cinema advertising market united, and this in the interest
of all stakeholders.
On 1 October 2008 the Belgian Competition Authority
decided that its prior permission was no longer needed
for the expansion, renovation or replacement by
another multiplex of an existing Kinepolis multiplex. The
construction or acquisition of an additional multiplex (not
a replacement) would still have to be formally reported
until 1 October 2011. The Court of Appeal confirmed in
the ruling of 11 March 2010 the decision of the Belgian
Competition Authority, by annulling it and then arriving
at the same judgement as the Authority, except that
the conditions imposed on Kinepolis in 1997 will not
automatically expire on the end date (1 October 2011), but
rather will be automatically renewed unless a decision
to the contrary of the Belgian Competition Authority in
response to a request by Kinepolis.
On 1 January 2010 the Kinepolis pension fund was
converted into a group insurance.
31.Group entities
LIST OF FULLY CONSOLIDATED COMPANIES
NAMe
MUNICIPALITY
CINEPROJECTS nv (formed in 2009)
Brussels
B
BE 0816 884 015
100
Decatron nv
Brussels
B
BE 0424 519 114
100
Kinepolis Braine sa
Braine-L’alleud
B
BE 0462 688 911
100
Kinepolis Film Distribution (KFD) nv
Brussels
B
BE 0445 372 530
100
Kinepolis Financial Services nv
Brussels
B
BE 0886 547 831
100
Kinepolis Group nv
Brussels
B
BE 0415 928 179
100
Kinepolis Immo Hasselt nv
Hasselt
B
BE 0455 729 358
100
Kinepolis Immo Liège nv
Hasselt
B
BE 0459 466 234
100
Kinepolis Immo Multi nv
Brussels
B
BE 0877 736 370
100
Kinepolis Liège nv
Hasselt
B
BE 0459 469 796
100
Kinepolis Mega nv
Brussels
B
BE 0430 277 746
100
Kinepolis Multi nv
Kortrijk
B
BE 0434 861 589
100
Megatix nv
Brussels
B
BE 0462 123 341
100
Eden Panorama sa (Max Linder)
Lomme
F
FR 02340483221
100
Forum Kinepolis sa
Nîmes
F
FR 86421038548
79,92
Kinepolis France sa
Lomme
F
FR 20399716083
100
Kinepolis Immo St.Julien-lès-Metz sas
Metz
F
FR 51398364331
100
Kinepolis Immo Thionville sa
Metz
F
FR 10419162672
100
Kinepolis Le Château du Cinéma sas
Lomme
F
FR 60387674484
100
Kinepolis Mulhouse sa
Mulhouse
F
FR 18404141384
100
Kinepolis Nancy sas
Nancy
F
FR 00428192819
100
Kinepolis Prospection sas
Lomme
F
FR 45428192058
100
Kinepolis St. Julien-lès-Metz sa
Metz
F
FR 43398364331
100
Kinepolis Thionville sa
Metz
F
FR 09419251459
100
Kine Invest sa
Pozuelo de Alarcon
S
ESA 824 896 59
100
Kinepolis Espana sa
Pozuelo de Alarcon
S
ESA 814 870 27
100
Kinepolis Granada sa
Pozuelo de Alarcon
S
ESA 828 149 55
100
Kinepolis Madrid sa
Pozuelo de Alarcon
S
ESA 828 149 06
100
Kinepolis Paterna sa
Pozuelo de Alarcon
S
ESA 828 149 14
100
Kinepolis Schweiz ag
Schaffhausen
CH 2903013216-5
100
Kinepolis Poznan spzoo
Poznan
P
NIP 5252129575
100
Kinepolis Spzoo (in liquidation)
Poznan
P
NIP 5252184717
100
Majestiek International sa
Luxembourg
L
LU19942206638
100
Kinepolis Holding bv
Middelburg
N
NL 807760420B01
100
116 kinepolis group
country
ZW
VAT OR ENTERPRISE NUMBER
%
32.Mandates and remuneration of the Statutory auditor
The Statutory Auditor for the Company is KPMG Bedrijfsrevisoren, represented by Ms S. Brabants. For the entire Kinepolis Group,
the mandates and remuneration can be summarised as follows:
IN €
Remuneration of the statutory auditor
31/12/2009
31/12/2008
461 938
432 433
Remuneration for other services or assignments performed within the Company by the statutory auditor
22 040
17 675
Other audit related services
19 140
16 675
2 900
1 000
266 101
284 170
Tax services
Other
Remuneration for other services or assignments performed within the Company by persons associated
Other audit related services
Tax services
Other
TOTAL
89 630
221 237
176 471
62 933
750 079
734 278
Statutory auditors’ report to the general meeting of shareholders
of Kinepolis Group nv on the consolidated financial statements
for the year ended 31 December 2009
In accordance with legal and statutory requirements,
we report to you on the performance of our audit
mandate. This report includes our opinion on the
consolidated financial statements together with the
required additional comment and information.
Unqualified audit opinion on the consolidated
financial statements
We have audited the consolidated financial statements
of Kinepolis Group nv (“the Company”) and its subsidiaries (jointly “the Group”), prepared in accordance with
International Financial Reporting Standards, as adopted
by the European Union, and with the legal and
regulatory requirements applicable in Belgium. These
consolidated accounts comprise the consolidated
statement of financial position as of 31 December
2009 and the consolidated statements of income,
comprehensive income, changes in equity and cash
flows for the year then ended, as well as the summary
of significant accounting policies and the other explanatory notes. The total of the consolidated statement
of financial position amounts to € 343 537 (000) and the
consolidated income statement shows a profit for the
year of € 20 125 (000).
The Board of Directors of the Company is responsible
for the preparation of the consolidated financial
statements. This responsibility includes: designing,
implementing and maintaining internal control
relevant to the preparation and fair presentation of
118 kinepolis group
consolidated financial statements that are free from
material misstatement, whether due to fraud or
error; selecting and applying appropriate accounting
policies; and making accounting estimates that are
reasonable in the circumstances.
Our responsibility is to express an opinion on these
consolidated financial statements based on our
audit. We conducted our audit in accordance with
International Standards on Auditing, legal requirements and auditing standards applicable in Belgium,
as issued by the “Institut des Réviseurs d’Entreprises/
Instituut der Bedrijfsrevisoren”. Those standards
require that we plan and perform the audit to obtain
reasonable assurance whether the consolidated financial statements are free from material misstatement.
In accordance with these standards, we have
performed procedures to obtain audit evidence about
the amounts and disclosures in the consolidated
financial statements. The procedures selected depend
on our judgment, including the assessment of the
risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In
making those risk assessments, we have considered
internal control relevant to the Company’s preparation
and fair presentation of the consolidated financial
statements in order to design audit procedures that
are appropriate in the circumstances but not for the
purpose of expressing an opinion on the effectiveness
of the Group’s internal control. We have also evaluated
the appropriateness of the accounting policies used,
the reasonableness of accounting estimates made by
the Company and the presentation of the consolidated
financial statements, taken as a whole. Finally, we have
obtained from management and responsible officers of
the Company the explanations and information necessary for our audit. We believe that the audit evidence
we have obtained provides a reasonable basis for our
opinion.
In our opinion the consolidated financial statements
give a true and fair view of the Group’s net worth and
financial position as of 31 December 2009 and of its
results and cash flows for the year then ended in accordance with International Financial Reporting Standards,
as adopted by the European Union, and with the legal
and regulatory requirements applicable in Belgium.
Additional comment
The preparation of the management report and its content
are the responsibility of the Board of Directors.
Our responsibility is to supplement our report with the
following additional comment, which does not modify our
audit opinion on the financial statements:
The management report on the consolidated financial
statements includes the information required by law and
is consistent with the consolidated financial statements.
We are, however, unable to comment on the description
of the principal risks and uncertainties which the Group
is facing, and on its financial situation, its foreseeable
evolution or the significant influence of certain facts on
its future development. We can nevertheless confirm
that the matters disclosed do not present any obvious
inconsistencies with the information that we became
aware of during the performance of our mandate.
22 april 2010
KPMG Bedrijfsrevisoren
Statutory auditor
represented by
Sophie Brabants
Extract from the unconsolidated financial statements of Kinepolis Group nv,
drawn up under Belgian accounting principles
The following information is an extract from the unconsolidated financial statements of Kinepolis Group nv, drawn
up in accordance with Belgian accounting principles. These
unconsolidated financial statements, together with the
Board of Directors’ report to the General Shareholders’
Meeting and the Auditor’s report, will be filed with the
National Bank of Belgium within the legal deadline. It
should be noted that only the consolidated financial
statements as presented above give a true and fair view
of the financial position and performance of the Kinepolis
Group nv.
Given that Kinepolis Group nv is essentially a holding
company that accounts for its investments at cost in its
unconsolidated statements, these separate financial statements give only a limited view of the financial position of
Kinepolis Group nv. For these reasons the Board of Directors
has deemed it appropriate to present only a condensed
unconsolidated balance sheet and income statement,
prepared according to Belgian accounting principles for the
year ending on 31 December 2009.
120 kinepolis group
The statutory auditor’s report on these statements is
unqualified and confirms that the unconsolidated financial
statements of Kinepolis Group nv, prepared in accordance
with Belgian accounting principles for the year ending on
31 December 2009, give a true and fair view of the financial
position of Kinepolis Group nv in accordance with all legal
and regulatory provisions.
These unconsolidated financial statements of Kinepolis
Group nv can be obtained free of charge from the
website of Nationale Bank van België (NBB.be), in section
“Balanscentrale”, subsection “Jaarrekeningen opzoeken” or
from www.kinepolis.com. They can also be obtained free of
charge from the Kinepolis Investor Relations department.
CONDENSED UNCONSOLIDATED BALANCE SHEET OF KINEPOLIS GROUP NV
IN ’000 €
31/12/2009
31/12/2008
157 551
163 982
994
726
ASSETS
Non-current assets
Formation expenses
Intangible assets
Financial fixed assets
Current assets
TOTAL ASSETS
1 207
1 516
155 350
161 737
37 678
70 619
195 229
234 601
LIABILITIES
Equity
71 520
79 985
Issued capital
48 963
48 963
Share premium
1 154
1 154
Legal reserve
4 415
4 415
Unavailable reserves
6 973
5 976
Available reserves
2 849
2 849
Profit carried forward
7 166
16 629
761
556
Non-current loans and borrowings
86 000
130 000
Current loans and borrowings
36 231
23 576
717
485
195 229
234 601
Provisions and deferred taxes
CONDENSED UNCONSOLIDATED INCOME STATEMENT OF KINEPOLIS GROUP NV
IN ’000 €
Operating income
Operating expenses
31/12/2009
31/12/2008
22 449
22 235
- 20 436
-17 527
OPERATING PROFIT
2 013
4 708
Financial result
-1 628
-5 005
Extraordinary result
- 3 448
-5 514
Income tax expenses
GAIN/(LOSS) FROM THE FINANCIAL YEAR TO BE INCORPORATED
719
-2 344
-5 811
Mandates and remuneration of the statutory auditor at Kinepolis Group nv
The remuneration of the statutory auditor amounted to
€ 125 250 for the year 2009 (2008: € 120 750). In addition to this
remuneration, the statutory auditor or associated persons
charged € 19 140 for other auditing assignments and € 1 000
for non-auditing assignments (2008: € 11 375). Persons with
Investor Relations contact details
Kinepolis Group nv
Moutstraat 132-146
B-9000 Gent
CFO: Henk Rogiers, IR desk: Tine Duyck
T +32 9 241 00 22
[email protected]
122 kinepolis group
whom the statutory auditor has a professional relationship charged Kinepolis Group nv € 157 417 (2008: € 61 133) in connection to
other non-auditing assignments and € 78 350 (2008: 172 737) with
respect to tax consultancy services.
Kinepolis Group nv
Kinepolis
Multi nv
Kinepolis
Mega nv
Kinepolis
Braine sa
1,2%
Kinepolis
Immo Multi nv
Kinepolis
Immo Liège sa
Megatix nv
Kinepolis
Liège sa
Eurocasino nv
in liquidation
Kinepolis
Immo Hasselt nv
K.F.D. nv
CINEPROJECTS nv 99%
19%
1%
K.F.S. nv
98.8%
Kinepolis
France sa
Decatron nv
49.58%
Kinepolis
Invest sa
49.58%
49.7%
Kinepolis
España sa
49.7%
K. Immo St. Julienlès-Metz sas
92%
Kinepolis
Madrid sa
8%
Kin. St. Julienlès-Metz sa
92%
Kinepolis
Granada sa
8%
Kin. Le Château
du Cinéma sas
98%
Kinepolis
Paterna sa
2%
Kinepolis
Holding bv
Kinepolis spzoo
in liquidation
Kinepolis
Poznan spzoo
Kinepolis
Mulhouse sa
Majestiek
Intl. sa
Kinepolis
Thionville sa
Kinepolis
Schweiz ag
Kinepolis Immo
Thionville sa
Forum
Kinepolis sa
80%
Kinepolis
Nancy sas
Kinepolis
Prospection sas
Eden Panorama sa
Belgian
Foreign
Participating Interest
Unless mentionned otherwise, every company is a 100% subsidiary.
Colofon
Kinepolis Group nv:
Registered office: Eeuwfeestlaan 20, B-1020 Brussels, Belgium
Correspondence address: Moutstraat 132-146, B-9000 Gent, Belgium, [email protected]
BTW BE 0415 928 179 – RPR BRUSSELS
www.kinepolis.com
Corporate Communication: Myriam Dassonville, T +32 9 241 00 16, [email protected]
Investor Relations: Henk Rogiers, CFO – Tine Duyck, IR Desk – T +32 9 241 00 22, [email protected]
Creation: www.linknv.be
Photography: Fabien Vieilletoile, Bart Lasuy
Dit verslag is beschikbaar in het Nederlands, het Frans en het Engels.
Ce rapport est disponible en français, néerlandais et anglais.
This report is available in English, French and Dutch.
This Annual report is also published on our Investor Relations Website www.kinepolis.com/corporate
Thanks to all who contributed in one way or another to the realisation of the annual report.
Ratios
2004
2005
2006
2007
2008
2009
Revenue
200 608
192 812
211 191
212 324
216 877
231 226
EBITDA (1)
46 030
42 660
48 720
49 579
52 588
57 627
52 651
REBITDA
2004
2005
2006
2007
2008
2009
EBITDA / Revenue
22,9%
22,1%
23,1%
23,4%
24,2%
24,9%
22,8%
21,5%
23,5%
23,4%
24,6%
25,6%
58 072
12,9%
10,8%
12,6%
11,8%
13,2%
13,8%
5,6%
4,2%
6,9%
6,9%
7,0%
9,6%
2004
2005
2006
2007
2008
2009
Gross profit (2)
45 789
41 387
49 608
49 687
53 346
59 218
25 790
20 728
26 507
25 146
28 718
31 822
Tuesday
18 May 2010
Net finance expense
-7 961
-7 365
-6 693
-6 890
-8 390
-2 305
Profit before tax
17 829
13 364
19 814
18 256
20 328
29 517
156 659
149 657
136 570
138 868
129 248
89 364
11 266
8 105
14 635
14 726
15 186
22 177
171,8%
155,9%
126,4%
122,3%
110,2%
67,4%
15 225
20 421
25,2%
26,2%
30,8%
31,2%
33,3%
38,6%
Thursday
Current Ratio (6)
48,5%
49,3%
42,2%
55,3%
61,2%
48,8%
26 August 2010
8,7%
7,0%
9,0%
8,3%
9,6%
12,0%
Current profit
2004
2005
2006
2007
2008
2009
Revenue
-3,9%
9,5%
0,5%
2,1%
6,6%
EBITDA
-7,3%
14,2%
1,8%
6,1%
9,6%
Friday
ROCE
(7)
21 May 2010
Tuesday
REBITDA
10,3%
Gross profit
-9,6%
19,9%
0,2%
7,4%
-19,6%
27,9%
-5,1%
14,2%
10,8%
-28,1%
80,6%
0,6%
3,1%
46,0%
Operating profit
Current profit
25%
160%
24%
135%
23%
110%
Thursday
24 February 2011
11,0%
34,1%
Tuesday
22%
2004
2005
2006
2007
2008
2009
309 715
307 150
301 491
310 247
299 349
288 153
51 578
58 885
49 283
53 637
53 035
55 384
17 May 2011
85%
21%
16 November 2010
60%
2005
2006
2007
2008
2009
2005
EBITDA / Revenue
Non-current assets
Current assets
361 293
366 036
350 774
363 884
352 383
343 537
TOTAL ASSETS
91 175
96 014
108 059
113 554
117 306
132 540
18 499
17 889
17 229
17 524
17 272
17 676
149 831
135 183
119 656
139 231
130 000
86 000
30 801
41 829
31 486
15 877
16 536
23 696
64 488
68 463
68 233
71 023
64 894
76 131
6 499
6 657
6 109
6 675
6 375
7 494
Other
361 293
366 036
350 774
363 884
352 383
343 537
2006
2007
2008
2009
13%
70%
11%
60%
9%
50%
7%
40%
5%
2006
2007
2008
2009
ROCE
income and charges
20 May 2011
General Meeting
Publication
Publication
of Q3 2010
business update
Publication
of 2010 result and
Publication
of Q1 2011
business update
General Meeting
30%
2005
Friday
Publication
of Q1 2010
business update
2005
2006
2007
2008
2009
Current Ratio
Kinepolis Group
Annual Report 2009
WWW.KINEPOLIS.COM
09

Kinepolis Group

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