annual accounts of kinepolis group

Transcription

KINEPOLIS EXPERIENCE
CONTENTS
1.
2.
3.
4.
5.
6.
7.
8.
Letter to the shareholders
Management
Significant events
Company profile
2003 Results Kinepolis Group
Board of Directors’ Report
Information for shareholders
Activities by business unit
P2
P4
P6
P7
P8
P10
P14
P15
a. Kinepolis Cinema
i.
Operations
ii. Marketing & Sales
iii. Food & Beverage
iv. Booking & Programming
v.
IT
vi. Projection & Sound
vii. BI2OS Business Intelligence
& International Operations support
viii. Kinepolis Film Distribution
b. Kinepolis Real Estate
i.
International Concessions
ii. Project Development
9.
Corporate Governance
P36
10.
Annual accounts of Kinepolis Group nv
P42
11.
Discussion of the ordinary accounts
P68
12.
Transition to IAS / IFRS
P85
KINEPOLIS
IN BRIEF
Looks good: the widest choice of films, perfect 35 mm and digital film quality, wall-to-wall screens, an overwhelming
visual experience.
Sounds good: digital sound to THX norms, dolby surround, an unforgettable experience for your ears.
Feels good: convenient cupholders for your drinks, luxury and comfort, double armrests, 1.25m legroom
Much more than cinema
1
LETTER
TO THE SHAREHOLDERS
Dear Shareholders,
In 2003 both the European and American cinema sectors were confronted with significant falls in visitor numbers compared
with the previous years. Neither was Kinepolis Group spared the adverse effects of hot weather, a modest number of new
releases and an imbalance in the spread of box office hits over the year. Despite this Kinepolis Group ended 2003 with a net
profit of € 2.7 million and a net financial debt of € 151 million.
With this € 8.4 million increase from the 2002 net loss, and with debt down by 23.8% on 2002, Kinepolis Group’s earnings
have taken a positive turn, with group performance exceeding expectations.
VISITORS FIGURES
Kinepolis had visitors totalling 24.2 million in 2003. In absolute terms, this represents a fall of 11.4% compared with 2002
(27.3 million) and, on a like-for-like basis, a drop of 6.5%. This decrease was largely attributable to the exceptionally hot
weather between April and mid-September. Some lost ground was made up in the fourth quarter, when a number of popular
films came onto the circuit.
In the Belgian Kinepolis complexes, overall ticket sales were 10% down on the previous year. In France, the fall in sales was
limited to 5%, partly due to the 17% increase in visitors number at Kinepolis Nîmes.
In Spain, KinepolisMadrid remained the group leader, with total visitors figures of 3.1 million. The visitors number at Kinepolis
Valencia increased by 8.6% compared with 2002.
The complexes in Poland (Kinepolis Poznan) and Switzerland (Kinepolis Schaffhausen) saw visitors figures up by 4.3% and
4.6% respectively.
THE KINEPOLIS GROUP AND DIGITAL CINEMA
The Kinepolis Group, already known as the European trendsetter in the use of digital projection techniques, currently has a
platform of 10 digital projectors in Belgium, including 6 high-resolution projectors (DP100) – a unique package in Europe.
With the digital cinema network now technically operational to high quality standards, alternative content can also be offered
in addition to conventional films.
In close cooperation with Barco (DLP projectors), EVS (server technology) and Studio L’Equipe, Kinepolis Group is offering
new facilities and is diversifying its programme services:
• The films ‘Plop en de Toverstaf’, ‘Finding Nemo’ and ‘Brother Bear’ have already demonstrated the quality and added value
of digital images.
• Since 2 February 2004 Kinepolis visitors have been able to watch the VTM News live daily at 7 p.m. in the digital Kinepolis
theaters in Brussels and Flanders.
2
• Digital previews of the VTM crime series ‘ASPE’ have been held in the same 6 theaters every Tuesday since 10 February
2004. The first 10 ASPE shows drew over 27,000 visitors, i.e. a theatre occupation rate of no less than 61%, equivalent to a
successful Saturday night film.
More and more alternative programmes, which could never have been shown in a cinema without digital technology, will
gradually be screened in addition to traditional films.
Live or recorded retransmissions of prestigious events or concerts, television series (fiction) and programmes with a special
human interest will soon be finding their way onto the big screen.
Unequalled visual comfort, perfect sound and the special dimension of the giant screen will create a new experience for
cinema visitors.
ORGANISATION
In early 2004 special attention was paid to the structural organisation of the company.
Kinepolis Group was split into two functional divisions: Kinepolis Cinema and Kinepolis Real Estate. With the cinema activity
of Kinepolis Cinema now separated out from the real estate activity of Kinepolis Real Estate the organisation will
undoubtedly gain in efficiency.
OUTLOOK
In the coming years Kinepolis Group will be focusing in increasing its profit through three strategic pillars:
• Increasing operating efficiency in existing cinema complexes;
• Generating profit in every one of the group’s cinema entities;
• The phased expansion programme: Kinepolis Granada in June 2004, Kinepolis Nancy in 2005, followed by Kinepolis Ostend
and Kinepolis Bruges.
Kinepolis Group expects 2004 audience figures to be virtually unchanged from 2003.
The group is aiming at a 'double-digit' increase in net profit, and at bringing the net debt level below 3.5 x EBITDA.
The Board of Directors thanks all Kinepolis Group’s shareholders, customers, management and employees for the confidence
and devotion that they continue to show in the company and its activities.
Florent Gijbels
CEO
Joost Bert
CEO
Baron Hugo Vandamme
Chairman of the Board of Directors
3
MANAGEMENT
Mr Joost Bert,
CEO Kinepolis Cinema
Mr Florent Gijbels, Spokesman,
CEO Kinepolis Real Estate
On 4 February 2004 the Board of Directors decided to split the Kinepolis Group functionally
into two divisions:
Kinepolis Cinema and Kinepolis Real Estate, in order to make a clear distinction between
Kinepolis's cinema and real estate activities.
Mr Joost Bert is CEO of Kinepolis Cinema and Mr Florent Gijbels is CEO of Kinepolis Real
Estate.
The CEO’s are each supported by a Management Committee made up of the managers of
the respective Business Units.
Mr Gilbert Deley,
Managing Director
Kinepolis Cinema
4
Mr Jan Staelens, CFO Kinepolis Group,
Deputy Managing Director
Kinepolis Cinema
Management Committee - Kinepolis Cinema
4 Gilbert Deley
Managing Director Kinepolis Cinema
6 Jan Staelens
CFO Kinepolis Group, Deputy Managing Director Kinepolis Cinema
7 Jan Huyghe
Sales, Operations & Marketing Director
5 Maud Van De Velde Booking & Programming Director
2 Bob Claeys
F&B Director - Projection & Sound Director
3 Bart Claeys
Business Intelligence & Operations Support Director
1
Nick Vanderplancke Human Resources Director
8 Alain De Roovere
IT Director
Management Committee - Kinepolis Real Estate
10 Luc Van Baelen
Managing Director Kinepolis Real Estate
9 Erwin Himpens
Director Development Kinepolis Real Estate
Willem De Vidts
Director Kinepolis Real Estate Spain (not on the photo)
Annual report 2003
5
SIGNIFICANT
• 2003 : Installing of the first digital projectors
• February 2003: Signing of a purchase option on a site
at Bruges (Belgium)
• May 2003: Sale of Cinecity Treviso (Italy)
• June 2003: Sale of RMBe (Belgium)
• July 2003:
- Shareholding in Kinepolis Nîmes (France)
raised to 80%.
- Building works begin at Kinepolis Granada (Spain)
6
EVENTS
• December 2003: Purchase of the remaining shares
(Deficom) in the holding company of Kinepolis Poznan
• February 2004:
- Sale of the Max Linder complex in Paris (France)
- Purchase of the land for the Kinepolis Nancy
project (France) and start of building works.
COMPANY
KINEPOLIS GROUP
Complex
CINEMAS AT
PROFILE
31.12.03
City Year opened
Number of
screens
Number of
seats
Belgium
Kinepolis
Opéra
Palace(1)
Kinepolis + IMAX
Metropolis
Kinepolis
Kinepolis
Kinepolis
Kinepolis
Kinepolis Imagibraine
Ghent
Liège
Liège
Brussels
Antwerpen
Hasselt
Kortrijk
Leuven
Liège
Braine L'Alleud
1981
1981
1983
1988
1993
1996
1997
1997
1997
2000
Total
12
6
6
25
24
14
10
7
16
10
3
1
1
7
8
3
2
1
4
2
658
192
305
547
368
421
712
730
595
450
130
36 978
14
23
1
10
14
12
4
4 014
7 286
616
2 930
4 612
2 500
865
78
22 823
8
1 540
8
1 540
25
24
9 195
8 194
49
17 389
20
7 338
20
7 338
285
86 068
France
Kinepolis St. Julièn-lès-Metz
Kinepolis Le Château du Cinéma
Max Linder(2)
Kinepolis
Kinepolis
Forum Kinepolis
Forum Centre
Metz
Lomme
Paris
Thionville
Mulhouse
Nîmes
Nîmes
1995
1996
1998
1999
1999
2000
2000
Total
Switzerland
Kinepolis
Schaffhausen
2000
Total
Spain
Kinepolis
Kinepolis Paterna
Madrid
Valencia
1998
2001
Total
Poland
Kinepolis
Poznan
2001
Total
Total
(1)
Activities halted for renovation. Scheduled reopening in June 2004.
(2)
Sold on 13.02.2004
Annual report 2003
7
2003 RESULTS KINEPOLIS GROUP
EBITDA (in € millions)
50
Kinepolis Group visitors (in millions)
30
45,3
44,1
42,7
40
25
20
30
15
20
10
10
0
5
01
02
03
Split turnover by activity
0
99
00
01
02
03
Split visitors existing and
“non-mature” complexes
KFD/KFP 1,7%
Media Sales* 12,9%
2,4% Rental concessions
63,9% Box Office
Non-Mature 13,7%
complexes*
86,3%
Food & Beverage 19,1%
* Screen advertising and events
8
* 2003: Valencia and Poznan
Existing complexes
CONSOLIDATED
(In '000 EUR)
Visitors (in '000)
Total operating income
Total operating income Decatron
Total operating income excl. Decatron
Total turnover
Total turnover cinema activities (1)
Total turnover other activities (1)
EBITDA
Margin EBITDA / total operating income
EBITDA excl. Decatron
Margin EBITDA / Total operating income excl. Decatron
Depreciation, amounts written off and provisions (2)
EBIT
EBIT Margin/ Total operating income
EBIT excl. Decatron
Margin EBIT / Total operating income excl. Decatron
Operating result
Financial result (3)
Result on ordinary activities
Extraordinary result (4)
Result before taxes
Taxes and deferred taxes
Share in the result of capital movements
Net consolidated result
Net consolidated result share of the Group
Share of third parties (5)
Current result of the group before taxes
Current result of the group
Net current result
Current goodwill depreciation
Net result of the Group per share
Net current result per share
Net current result per share
Number of shares
Intangible fixed assets and Formation expenses
Goodwill
Tangible fixed assets
Financial fixed assets
Amounts receivable after more than one year
Stocks and orders in progress
Trade debtors
Other receivables
Short term investments and cash at bank and in hand
Prepayments and accrued income
TOTAL ASSETS
Equity
Minority interests
Provisions for liabilities and charges
Long term debts
Short term financial debts
Trade debts
Other debts
Deffered charges and accrued income
TOTAL LIABILITIES
KEY FIGURES
Growth
-11.4%
-7.2%
-6.5%
-7.6%
-7.8%
3.4%
-5.7%
-4.3%
-18.2%
34.7%
35.0%
161.3%
-27.5%
303.1%
24.8%
126.9%
147.3%
175.9%
142.2%
142.2%
2003
31/12/03
24 219
198 072
1 673
196 399
191 445
186 869
4 577
42 729
21.57%
42 350
21.56%
28 288
14 440
7.29%
14 474
7.37%
14 440
-10 817
3 624
2 205
5 829
-3 736
0
2 093
2 719
-626
7 359
3 608
2 985
2 838
0.52
0.39
0.43
6 930 778
2 703
19 680
240 391
575
21 041
2 078
13 624
13 533
14 250
1 335
329 210
61 395
528
10 092
139 247
33 492
36 842
29 625
17 988
329 210
31/12/02
27 334
213 474
3 436
210 038
207 176
202 750
4 426
45 310
21.23%
44 257
21.07%
34 586
10 723
5.02%
10 311
4.91%
10 723
-16 635
-5 911
3 041
-2 870
-4 969
70
-7 770
-5 745
-2 025
162
-4 756
-7 066
2 473
-0.85
-0.83
-1.02
6 930 778
3 307
16 515
260 325
424
24 205
1 717
13 562
18 455
13 163
6 554
358 227
62 172
2 361
10 272
160 383
56 915
37 059
14 522
14 542
358 227
(1) Income from other activities mainly includes film distribution (KFD), film production and turnover from projects. Income from partnerships, reported last year
under income from holdings, and other earnings from holdings are now shown under cinema activities.
(2) € 2.5 million of the € 5.0 million decrease in 2003 is the result of deconsolidations. A provision for a contractor’s claim in Poland was written back in an
amount of € 0.9 million (amount charged in 2002), whilst other provisions rose by € 0.2 million.
(3) The financial result includes € 1.6 million (2002: € 3.0 million) of translation losses and hedging costs.
(4) The 2003 extraordinary results consist mainly of realised capital gains on sales of the shareholdings in Cinecity Treviso and RMBe.
(5) Minority interests in 2002 consist of € -0.19 million Treviso (Italy) and € -1.83 million Poznan (Poland). Minority interests in 2003 consist of € -0.04 million
Treviso (Italy), € -0.59 million Poznan (Poland) and € 0.01 million Nîmes (France).
Annual report 2003
9
BOARD OF DIRECTORS’ REPORT
EUR million
Audience figures (million)
Total turnover
Total turnover in cinema operations (*)
EBITDA 1
Operating profit, EBIT
Financial result
Profit/loss on ordinary activities
Extraordinary result
Pre-tax profit/loss
Taxes and deferred tax liability
Consolidated net profit/loss
Consolidated net profit/loss (Group share)
Net result on ordinary activities
Net result on ordinary activities (Group share)
Net financial debts 2
31/12/2003
24,2
191.4
186.9
42.7
14.4
-10.8
3.6
2.2
5.8
-3.7
2.1
2.7
3.0
3.6
151.0
31/12/2002
27,3
207.2
202.8
45.3
10.7
-16.6
-5.9
3.0
-2.9
-5.0
-7.8
-5.7
-7.1
-4.8
198.1
Evolution
-11,4%
-7.6%
-7.8%
-5.7%
34.7%
35.0%
-27.5%
24.8%
2003
23.8
188.2
183.6
42.3
14.4
-10.8
3.6
3.2
6.7
-3.7
3.0
Comparable basis (*)
2002
VAR
25.5
-6.5%
192.6
-2.3%
188.1
-2.4%
42.7
-1.0%
10.9
32.2%
-15.7
30.9%
-4.8
3.1
2.7%
-1.7
-4.8
23.4%
-6.5
-23.8%
(*) On a comparable basis: Disregarding the contributions of units sold in 2002 and 2003: Pentascoop (Belgium, Dec 02), Pioltello (Italy, Dec 02), Treviso (Italy,
May 03), RMBe (Belgium; June 03), the liquidated companies, as well as the complexes of Ede and Vlissingen. The effect of the participation increase in
Forvm Kinepolis Nîmes was not withheld in the comparable base.
(1) EBITDA: Earnings before interest, tax, depreciation and amortisation
(2) Net financial debt position: financial debts less the GIMV (2003: € 7.4 million) subordinated loan, cash at banks and in hand and short-term investments
Discussion of key figures
Turnover and operating income
At € 198.1 million total operating income was down
7.2% on 2002 in absolute terms, and by just 1.8% on a
like-for-like basis.
margins at 2002 levels (EBITDA / operating income:
22%) with the help of an intensive cost-cutting programme.
A successful year enabled film distributor KFD to contribute € 0.7 million to EBITDA (2002: € -0.5 million).
Operating profit (EBIT)
- Turnover from cinema activities fell less sharply
(7.8%) than audience numbers (11.4%), due mainly to the raising of ticket, drinks and snacks prices
in mid-2003, and to marketing drives such as the
‘Summerticket’, the ‘Airco campaign’ and the new
Cinemania programme (‘view the other film better’).
- KFD (Kinepolis Film Distribution), Belgium’s third
largest film distributor, ratcheted up film distribution turnover by 127% to € 3.3 million, thanks in
part to the success of ‘De Zaak Alzheimer’ (The
Alzheimer Case), which attracted audiences of
590,000 in 2003.
Kinepolis Group’s film production business was virtually non-existent.
EBITDA
EBITDA decreased by 5.7% to € 42.7 million (2002:
€ 45.3 million), a dip of just 1.0% on a like-for-like
basis. Despite lower income and the need to cover
fixed costs, Kinepolis Group maintained operating
10
Operating profit increased by 34.7% to € 14.4 million.
- Depreciation decreased in 2003 by € 5 million to
€ 27 million. € 2.5 million of this reduction
relates to the sale of cinema complexes.
- Write-downs amounted, as in 2002, to € 0.8 million.
- The € 0.9 million provision for a contractor's
claim in Poland was written back in full.
Financial result
With reduced debt levels, lower interest rates and
hedging of the group’s Polish zloty and Swiss franc
exposure, financial results improved by 35%.
- Interest and other debt charges fell by € 5.1 million
to € 10.1 million. € 1.0 million of this reduction was
due to companies no longer being consolidated.
- In March 2003 contracts were taken out to hedge
the Group’s Polish zloty and Swiss franc exposures. Realised foreign currency translation losses and hedging costs together amounted to just
€ 1.6 million (2002: € 3.0 million).
- The current open foreign exchange positions are
almost fully covered at fixed exchange rates and
at local floating interest rates.
A latent capital gain of € 0.9 million existed on own
shares held at the end of the year.
Profit/loss on ordinary activities
The profit on ordinary activities rose by € 9.5 million
to € 3.6 million (2002: € -5.9 million).
Extraordinary result
The extraordinary profit of € 2.2 million relates mainly to capital gains on the sale of participating interests
in Cinecity Treviso (55%, Italy) and RMBe (50%,
Belgium).
Taxes and deferred tax liabilities
Taxes and deferred tax liabilities fell by € 1.2 million to
€ 3.7 million.
A change in the valuation rules allowed latent tax liabilities to be offset in 2003 against calculated latent
tax assets, but only up to the amount of the latent tax
liabilities. The change had a positive impact of € 0.4
million.
Debt reduction
The net financial debt position (financial debts less the
GIMV subordinated loan, cash at bank and in hand and
short-term investments) fell by 23.8% from € 198.1
million at the end of 2002 to € 151.0 million at the end
of 2003.
The deconsolidations had the effect of reducing debt
by € 3.1 million.
As at 31 December 2003, debts included € 3.1 million
under a new loan facility for the building project at
Kinepolis Granada, and a € 3.7 million increase in
debts at Kinepolis Nîmes, attributable to the increase
in the stake in Kinepolis Nîmes to 80%, which led the
Kinepolis Group to change the method of consolidation [fully consolidated in 2003; proportional consolidation (50%) in 2002].
The debt position of € 151 million is lower than the figure of € 170 million forecast in September 2003. This
is because:
- in December 2003 an amount of € 3.4 million was
received in Spanish VAT, € 1.0 million of which will
be transferred to the Spanish government in
2004.
- advance payments of € 2.5 million were received
in France in December 2003 for screen advertising,
- the remaining € 5.5 million for the participating
interest in Poland was not disbursed until
January 2004.
Consolidated net profit
Kinepolis exceeded the break-even result that it projected in September. Consolidated net profit increased
by € 9.9 million to € 2.1 million (2002: € -7.8 million).
Consolidated net profit (group share) rose by € 8.5
million to € 2.7 million (2002: € -5.7 million). Net result
on ordinary activities (group share) rose by € 8.4 million to € 3.6 million (2002: € -4.8 million).
Appropriation of the result
In its proposals to the General Meeting concerning the
appropriation of the result and the payment of a dividend, the Board of Directors took into account various
factors, including the company's financial situation,
the operating results, current and expected future
resources, and expansion plans.
Annual report 2003
1
RAPPORT du conseil D’ADMINISTRATION
It is proposed that a dividend of € 0.13 per share will
be paid in respect of 2003.
Profit to be appropriated for the year
49 402.93
Profit brought forward from previous year 3 577.52
Withdrawal from equity
to the reserves
178.35
Addition to equity
to legal reserves
2 470.15
to the other reserve
720.70
Profit to be carried forward
49 084.41
Dividends
883.54
If the General Meeting approves this proposal, from 1
June 2004 a gross amount of € 0.13 will be payable
against presentation of coupon no 4 to Fortis Bank,
ING Bank and KBC Bank.
Outlook
Kinepolis Group expects 2004 audience figures to be
virtually unchanged from 2003.
The Group is aiming for a further increase in profit,
and specifically "double-digit” growth in net profit.
It has set itself the goal for 2004 of reducing net debt
to below 3.5 x EBITDA.
As from 2005, the phased expansion programme
(Kinepolis Granada in mid-2004, Kinepolis Nancy in
2005, followed by the Bruges and Ostend projects) will
generate an increase in overall audience numbers.
The Granada cinema complex with 15 screens and
4,670 seats will be opening its doors in mid-2004.
Significant events after the balance
sheet date
As at 19 March 2004 GIMV sold its entire shareholding
in Kinepolis Group. The mentioned stipulations of the
shareholders agreement therefore no longer apply.
In February 2004 Kinepolis Nancy purchased a
13,425 m2 site in Nancy for a new 2,772-seat cinema
complex.
At the beginning of 2004 Kinepolis sold its Max Linder
cinema in Paris.
12
Buy-in of own shares
The Extraordinary General Meeting of 16 May 2003
renewed the authorisation granted to the Board of
Directors:
- to acquire the company’s own shares or profitsharing certificates and to dispose of them if such
acquisition or disposal is necessary to avoid an
imminent and serious disadvantage for the company. This authorisation is valid for a period of
three years.
- to acquire the number of the company’s own
shares permitted under article 620 of the
Companies’ Code at a price that may not be lower
than the fractional value per share and not higher than 115% of the closing price at which these
shares are listed on Euronext Brussels on the day
preceding the purchase or exchange.
This authorisation is valid for a period of 18 months.
Under the terms of the “Market Maintenance
Agreement” with stock market company “Banque
Dewaay nv” (which was ended on 31 January 2003)and
subject to the conditions of the resolution of the
Extraordinary General Meeting of 16 May 2003, a total
of 21 768 shares were purchased last year and 8 843
shares were sold.
Under the terms of the “Market Maintenance
Agreement” with stock market company “Delta Lloyd
nv”and subject to the conditions of the resolution of
the Extraordinary General Meeting of 16 May 2003, a
total of 13 170 shares were purchased last year and 7
170 shares were sold.
The Board of Directors also proceeded, subject to the
conditions set by the aforementioned Extraordinary
General Meeting, to purchase 61,638 shares.
At 31.12.2003 Kinepolis Group nv held 134,289 of its
own shares, representing 1.94% of the total number of
shares, with a capital value of EUR 919 242.
Amendments to the Articles of
Association
The company's articles of association were amended
by the Extraordinary General Meeting of 16 May 2003
to reflect the latest changes in legislation on commercial companies and the law of 2 August 2002. In particular article 14 was adjusted to include the criteria
that a director must meet in order to qualify as an
independent director.
Issuing of warrants
On 28 May 2003 the Board of Directors of Kinepolis
Group nv proceeded, within the authorised capital, to
issue 294,250 registered warrants to employees and
senior managers of Kinepolis Group nv and its various
subsidiaries. So far, 248,250 of these warrants have
been effectively allotted.
These warrants may be exercised during set exercise
periods at a price of € 12.0714/share, and for the first
time during the second week of April 2007.
Each warrant entitles its holder to one new share in
Kinepolis Group nv.
Shares issued in this way will be listed on Euronext
Brussels.
This gives the following voting securities:
Existing shares:
• Shares representing capital:
• Shares not representing capital:
6 930 778
0
Potential shares deriving from rights and obligations
to convert into or subscribe to issued securities:
• Warrants allotted*:
cles 523 and 524 of the Belgian Companies’ Code.
The procedure prescribed by artikel 523 was followed
because Mrs Marie-Rose Claeys-Vereecke, Mrs MarieSuzanne Bert-Vereecke and Messrs Florent Gijbels,
Joost Bert and Peter Bert declared that, as beneficiaries of the warrants or as members of the beneficiaries’
immediate families, they had interests in terms of their
personal assets that could potentially conflict with
with decision to be taken by the Board of Directors.
The procedure prescribed in article 524 was followed
because warrants were also to be allocated to Mr
Joost Bert, who should possibly be regarded as a
shareholder having a decisive or significant influence
on Kinepolis Group nv.
The Board of Directors, meeting on 14 May 2003,
decided therefore to entrust three directors not having an interest in the proposed issue of warrants with
drawing up a report describing the financial effects of
the decision for Kinepolis Group nv, giving a reasoned
assessment of the same and indicating the interest of
the transaction for the company and for the shareholders as a whole, as well as the absence of any direct
or indirect granting to a shareholder of any advantage
in the form of preferential remuneration.
The Board was assisted in this assignment by an
expert chosen for reasons of his independence
towards the decision.
After noting and analysing the report of the independent directors and the expert, the Board of Directors
determined that the planned transaction was in the
interest of the company and the shareholders as a
whole. It therefore decided to proceed to issue
294,250 warrants, each entitling its holder to one
share.
248 250
Other mandates given to the auditor
TOTAL:
7 179 028
Conflict of interests procedure
The auditor of Kinepolis Group nv is BCV Klynveld Peat
Marwick Goerdeler Bedrijfsrevisoren, represented by
Mr Ludo Ruysen.
In the context of the issue by the Board of Directors of
Kinepolis Group nv of 294,250 registered warrants to
employees and senior managers of Kinepolis Group nv
and its various subsidiaries, the Board of Directors
resolved to follow the procedures prescribed by arti-
During 2003 a total of € 217,611 was paid to the
Statutory Auditor, KPMG Bedrijfsrevisoren and its affiliates, in fees for additional work.
* Pro Memorie: 294 250 issued warrants
Annual report 2003
13
INFORMATION FOR
SHAREHOLDERS
Share price evolution + volume
50000
20
Volume
Vol. Securities
Financial calendar
Share price
Closing price
40000
15
30000
• Friday, 21 May 2004:
Kinepolis Group nv Annual General Meeting
20000
10
10000
0
1998
2003
5
SHARE PRICE IN 2003
High
17.55
Low
6.94
Closing price at end of December
15.45
Average number of shares traded per day
3 464
Total number of shares traded during the year
956 146
Capitalisation
107 080 520 EUR
KEY FIGURES PER SHARES (CONSOLIDATED)
Number of shares 31/12
6 930 778
Net result of the Group per share
0.43
Dividend
0.13
• Friday, 16 July 2004:
2004 semestrial visitors figures posted on
www.kinepolis.com
• Friday, 17 September 2004:
Publication of results for the first half of 2004
• Friday, 15 October 2004:
2004 Q3 visitors figures posted on
www.kinepolis.com
14
ACTIVITIES BY BUSINESS UNIT
Kinepolis Cinema
1.Operations
P16
2.Marketing & Sales
p20
3.Food & Beverage
P25
4.Booking & Programming
P26
5.IT
P27
6.Projection & Sound
P28
7.BI 2OS Business Intelligence &
International Operations support
P30
8.Kinepolis Film Distribution
P32
Kinepolis Real Estate
1.International Concessions
P33
2.Project Development
P33
15
Kinepolis Cinema
1. OPERATIONS
Operations Belgium
A flash-back ....
After an outstanding film year in 2002, the Belgian
cinema sector had to contend in 2003 with a number
of market and more general factors which had the
effect of depressing audience figures. Not so much
new competitors, but more a poor film line-up and in
particular the uncommonly long and hot summer
extending from April right up to mid-September
reduced ticket sales by 10%.
The weaker than expected results led Kinepolis senior
management to bring forward and apply resolutely a
series of incisive strategic, organisational, structural
and tactical measures.
The reorientation towards a Customer-Centric
Organisation took the form, in an initial but crucial
phase, of integrating Marketing & Sales and Operations,
the two departments closest to our customers. Our
Summerticket and Split Screenings initiatives produced
a turnaround within the operating year.
Together with carefully targeted price increases on
tickets, drinks and snacks in early July and closer
cooperation between the Food & Beverage and Finance
& Administration departments, these initiatives paved
the way to a constantly improving second half, with all
Kinepolis cinemas beating one record after another in
the final months of the year. In terms of both quantity
and quality, of revenue management and cost
effectiveness, in both B2B and B2C.
16
This strongly increased relative profitability, backed by
a strong year-end programme, enabled the majority of
the Belgian Kinepolis cinemas to present financial
figures that were not only better than forecast but
better than ever before.
The path to the future….
Work was continued – and new initiatives were started
– in 2003 to prepare Kinepolis Belgium's medium and
long-term future as a pacesetter, leader and reference
on the cinema market.
Renewed attention to Belgium as the cherished
stronghold of the Kinepolis Group led to the decision
to dispose of two older and smaller city cinemas
(Pentascoop Kortrijk and Opéra Liège) in order to free
up room for new and strategically more interesting
projects and opportunities.
In the conceptual studies for the new Bruges and
Ostend complexes, Kinepolis Group worked together
with various agencies and bureaus to create the
cinema of the future, differentiated in new ways from
the competition.
This rich and diverse programme was rounded off in
2003 by our new Cinemania offer (‘View the other film
better') which customers were quick to seize. As well
as placing greater emphasis on the existing technical
superiority of its image and sound, Kinepolis has
increased its lead in this area by creating a unique
digital projection platform.
Our customer focus is also expressed in an ambitious
but down-to-earth new ‘Service with a Smile’
programme and new procedures to tighten and
constantly monitor our entire operating apparatus
(detailed theatre management checklists, an updated
Mystery Shopping system, planned and surprise audits
and field visits). Local managements have also been
given controlled freedom to zoom in to their local and
local commercial and political contexts.
Kortrijk
Leuven
Liège
Record audience figures for third year
in a row
Opening of a brand-new Park & Ride
system in which Kinepolis actively
participates
Above-market audience figures
Thoroughgoing interior facelift
Temporary closing of the Palace for
renovation
Reopening of the Palace and final
closure of the Opéra scheduled for
02.06.2004.
News from individual complexes
Operations France
Antwerp
The overall French cinema market was down 6% on
2002, owing to the excellent weather and a weak lineup of French productions.
Confirmation of dominant position,
despite two new competitors in
catchment area (Utopolis Turnhout
and Siniscoop Sint-Niklaas).
Braine l’Alleud New local management.
Brussels
Development of a brand new security
approach, with a number of special
innovations to be launched in 2004.
Ghent
Opening of two new and successful
concessions:
Bloomingdale’s
(catering) and Video Palace (video
and DVD rental)
Hasselt
Confirmation of regional market
leader position.
Visitor figures at Thionville and Saint-Julien-lès-Metz
slipped by 9 and 12% respectively, in part following on
the opening of competing complexes.
Lomme and Mulhouse again strengthened their
market positions with strong commercial actions and
special initiatives to counter the effects of the
exceptionally good weather and poor programme lineup. According to the Board of Directors, the
functionality of the Mulhouse complex will improve
Annual report 2003
17
Kinepolis Cinema
Operations
thanks to the leasing of the concession spaces that will
available after some minimal infrastructure changes
and thanks to a strong decentralized management. In
Nîmes audiences increased by no less than 18%,
thanks to a strong competition policy.
In 2003 an additional step was taken in the direction of
entertainment with the creation of restaurants and
leisure concessions in and around the complexes. In
2004 we are continuing the evolution towards
entertainment centres, with the opening of a leisure
centre next to the Saint-Julien-lès-Metz Kinepolis,
emphasising the synergy between film and fun.
Further local renovations and commercial campaigns
and a national competitiveness-boosting plan will keep
us at the forefront of the difficult French market.
In 2005 a new 10-screen complex in Nancy will make
Kinepolis the largest market player in north-east
France.
The opening of Nancy in 2005 will take Kinepolis
France past the 7 million viewer mark and confirm its
place as the country’s fourth largest cinema group.
Operations Poland
Now in its second full operating year,
Kinepolis Poznan welcomed 5% more
visitors.
The reason for this increase, which runs
counter to to the general trend in Poland
(-15%), is that Kinepolis Poznan has been
open for just 2.5 years and has still not
reached its full potential.
For 2004 we expect further growth.
The commercial exploitation of the
concessions is also constantly improving.
A minus point remains the weak zloty and
the general economic situation in Poland.
18
The Poznan complex will improve his functionality
thanks to an intensive commercial exploitation of the
concessions, to an adjusted price policy and to a rise of
the visitor figures based on the recovery of the zloty
and the local economy.
Operations Switzerland
In the falling Swiss market, and with the excellent
weather as the greatest negative factor, Kinepolis
Switzerland increased its visitor figure by 4.7% in
2003. The complete filling of the commercial spaces
and the creation of an on-site disco will serve to
increase the leisure content and pull of the cinema
complex in the city of Schaffhausen, with its large
population of young people.
Operations Spain
Spain's Kinepolis cinemas strengthened their
leadership position in 2003.
With 3.1 million tickets sold in 2003, Kinepolis Madrid
remains the world's largest cinema. This cinema
temple par excellence will remember 2003 for visits of
world stars like Arnold Schwarzenegger, Will Smith,
Cameron Diaz and Drew Barrymore.
Despite many cinema openings in the Madrid market,
Kinepolis Madrid remained in 2003 above the 3 million
ticket threshold. With its technical and infrastructural
lead, aggressive marketing approach and strong
customer focus, Kinepolis Madrid can, on its fifth
birthday, look back with pride on an impressive
performance: over 17 million visitors, a robust quality
image and very positive operating results.
Kinepolis Valencia strengthened its position as Spain’s
number two cinema after Kinepolis Madrid.
For the first time since opening in 2001, Kinepolis
Valencia passed the 2 million visitors mark, despite the
relatively weak film year.
The citizens of Valencia have tasted ‘El Cine a lo
Grande’ (large scale cinema) at
Kinepolis and have made a clear
choice. The growth in cinema visitor
figures in Valencia in 2003 is due
entirely to Kinepolis Valencia.
In Spain's highly competitive cinema market, having a
better insight into cinemagoers' behaviour and desires
offers a not-to-be-underestimated competitive
advantage.
The results of these studies also provide the starting
point for action plans and investment priorities for the
coming years.
Expansion
Following the successful projects in Madrid and
Valencia, construction work on Kinepolis Granada
began in autumn 2003. This 15 screen and 4,670 seat
complex is situated just 15 minutes from the old city
centre, and will incorporate the latest in image, sound,
seating and ticketing technology. The attractive,
innovative interior design and the customer-friendly
food and beverage infrastructure will certainly be
setting new standards for cinema operators in
Andalusia.
The leisure centre just in front of the cinema, operated
by the Seville company DETEA-Commercia firm, will
also include Spain’s largest bowling alley. Inauguration
of this new complex is planned for June 2004.
Indeed, the top 5 ranking of the most
successful cinemas by box office,
published every year by the Spanish
Ministry of Culture contains no less
than 4 Kinepolis cinemas.
Study, Strategy and ..... Action!
Like Kinepolis Belgium and France,
Kinepolis Spain also invested in a
number of detailed customer research
studies by the highly reputed research
agency Taylor Nelson Sofres.
Annual report 2003
19
Kinepolis Cinema
2. MARKETING & SALES
20
2003 was the year in which Kinepolis Spain confirmed
and updated proven success formulas with new
projects and initiatives, all following on the qualitative
market studies undertaken in 2002 and 2003 by TNSDimarso.
The Marketing and Sales department has also been
restructured, with an additional Operations support
function.
Marketing & Sales is now sub-divided into four
divisions: Business to Business (B2B), Business to
Consumer (B2C), Theatre and Media – which will work
together closely to improve the quality of cinema
visiting.
Kinepolis Belgium
Our 100 Days card was launched for our most loyal
customers. This card entitles regular Kinepolis visitors
to special low-price tickets for an extraordinarily wide
range of blockbusters at the end of the year.
The Summer Ticket offered film fans a choice of films
at reduced prices in pleasantly cool theatres. Split
Screenings served to stagger film times and increase
audience comfort. Alternative content, such as the
digital projection of “Plop and the Magic Wand”,
increased the number of cinema visits, whilst our third
Kinepolis Tombola once again held out pleasant
surprises and attractive ticket prices for film fans.
Existing Specific Customer projects like KineSchola,
Happy Sundays and the Guido Kinepolis Card were
reactivated and fine-tuned, whilst making room for
new projects like Route 55, the Thursday film
afternoon for 55-plussers.
Business to Business
The B2B department was constantly looking for ways
to expand the Kinepolis customer portfolio, among
them by proactive prospecting (telephone and
company visits).
Coca-Cola extended its contract for 5 years, and
Proximus continues to pamper cinema visitors with
magic film moments via the Proximus Film Experience.
In 2003 Kinepolis signed a 3 year contract with new
supplier Ferrero.
The time was ripe to extend the number of points of
sale for Kinepolis products. Sales promotions were
undertaken both on the website (Kinestore) and via
post offices.
Events and theme evenings were used to create a new
universe immersing cinema visitors into the magic
world of film. This year’s eyecatchers included the 8
Mile Weekend, the 2 Fast 2 Furious Tuning Shows, the
première of the romantic comedy Love Actually in the
presence of Hugh Grant, and the Alien Celebration
Day.
Kinepolis Internationaal
At the international level Kinepolis continued on its
path of internationalising national success formulas
and encouraging local and market-specific activities.
Business to Comités d’Entreprise
Cinema vouchers are also sold to the business world
by business suppliers.
Business to Consumer
The B2C division was again busy in 2003 with a stream
on new initiatives to encourage cinema visiting and to
reward visitor loyalty. Kinepolis confirmed its
reputation as a ‘place to be’ where there is always
something to experience.
In France we can point to the growing success of
campaigns directed at Works Committees. In March
2003 the Carte KineCE was launched to reward loyal
customers and the successful Arbre de Noël
(Christmas Tree) formula was continued.
Annual report 2003
21
Kinepolis as location
Magic location for the biggest plans
Thinking of organising an event? Each of Belgium’s main cities boasts one outstanding location,
offering a range of advantages. Easy-to-reach, with ample free parking and comfortable rooms in
which to pamper your guests with an original event. Just what they're looking for. Welcome to
Kinepolis.
Guaranteed success at every event!
A reception desk for your employees or a break-out room for your seminar attendees, we prepare
everything for you. One of our many theatres will be just the right size for your event. Equipped with
the most up-to-date technical facilities. Along with a range of attractive areas for receptions, buffets,
gala dinners, everything you want. Your guests will definitely be impressed.
Seminars or congresses, roadshows or marts, product launches or recruiting drives. Breakfast,
whole-day or evening event. Everything is possible at Kinepolis. With comfortable stadium seating,
full-wall screens, excellent sound installations and high-tech audiovisual equipment. Any event at
this unequalled location will leave an indelible impression on your guests.
Films as bonuses: no change
Pamper your guests with a surprise film! Humour, action, romance ..... Have them shivering in their
boots, bursting their seams laughing, reaching for their handkerchiefs or sitting on the tips of their
seats.
One thing is certain: no one can resist the charm of the white screen. Kinepolis’s top card.
Your event at Kinepolis = a tried and tested recipe.
A drink and a snack or a banquet dinner to complete your event. From breakfast or brunch to
reception or walking dinner, our outstanding catering service provides everything, tailored to your
desires and budget.
Kinepolis as premium
An evening’s emotion as a gift!
Right across the world people have always enjoyed the magic of film. It is not for nothing
that cinema is called the seventh art. So offer cinema vouchers as gifts to your business
relations or employees! Cinema vouchers are interesting tax-wise, are valid for one year
in all Kinepolis cinemas in Belgium and can also be personalized with your company’s
details. Various formulas are available, all attractively packaged. An evening at the cinema.
An ever-welcome gift.
Individual cinema
voucher
22
Greetings card with
two cinema tickets
Film tin with 4 cinema
tickets
Subscription with
ten cinema tickets.
Kinepolis as medium
Go for an effective media-mix
Kinepolis offers you a whole range of communication media for reaching over 12 million visitors a year.
The right mix of these media will ensure that your product catches attention, is seen and even actively experienced.
The same cinemagoer can be reached up to four times in one evening. A smart approach to put - and keep - your brand
at the top of their minds.
Here are the various possibilities:
Sampling & animation
Screen advertising
Comfortably installed in our armchairs, cinema
fans are open to your message. 87% of the
audience is already in the theatre when the screen
advertising begins. A not-to-be-missed target
group.
Your gadget or sample handed out at the theatre
entrance or exit. An attractive intermezzo for
cinemagoers!
Digital@
Kinetickets
A network of trendy flat screens throughout the
complex draws attention – with 224 spots a week
for your brand or product.
A unique form of targeted
communication with a trendy
layout and circulation figures
that exceed your wildest dreams.
Film magazine
Product placement
Your product on display close to our largest
theatres. Success guaranteed.
The
Kinepolis
magazine
with
extensive, attractively presented
information on upcoming films,
animations and events at Kinepolis,
on DVDs, music, internet and ... your
advertisement.
A smart marketing move.
Convinced by this special business-and-pleasure mix?
Then contact our Regional Sales Promoter for further details
or mail us at [email protected].
Annual report 2003
23
Kinepolis Cinema
Marketing & Sales
Business to Consumer
Media
The Summer Ticket provided refreshing film moments
not only in Belgium, but also in France and Poland.
Kinepolis France also introduced the new Split
Screenings system and underscored its family image
with the Kinékids children’s corner and the Magic
Matinées.
Both nationally and internationally Kinepolis
continued to use the internet, e-mail and its own
communication channels (KIWI) to keep cinema
audiences updated on goings-on in the film world.
Kinepolis Poland opted in 2003 for schools, expanding
its successful KineSchola programme, whilst Kinepolis
Switzerland pampered teenagers with the Moovi Club,
which now has over 1200 members.
Kinepolis Spain continued its large-scale prepremières of major blockbusters, with surprise visits
by international stars such as Arnold Schwarzenegger,
Will Smith and the charming ladies from Charlie’s
Angels.
24
Kinepolis already has 33,500 My Kinepolis members,
and kinepolis.com is now Belgium’s largest film
website. In the annual ‘Site of the year’ award
organised by Clickx, Kinepolis took 4th place in the
‘Best professional site for 2003’ category.
3. FOOD & BEVERAGE
The Kinepolis F&B department another year of outstanding results
With a succession of sales-stimulating promotions, a
balanced product range, optimised pricing policy and
the introduction of split screenings, turnover by
cinema visitor rose by 11.8% in Belgium in 2003, for
the Kinepolis Group as a whole by 7.4%
A brand-new three-year partnership contract was
concluded with Ferrero, and the existing Coca Cola
contract was extended for a full five years.
A new software package was implemented to optimise
stock management in Belgium.
Other noteworthy items were the partnership contract
with Masterfoods in France, the start-up of USPs
(unique selling points) in Nîmes and Schaffhausen and
the introduction of a Kids’ Menu in Spain.
Annual report 2003
25
Kinepolis Cinema
4. BOOKING & PROGRAMMING
The Booking and Programming department is responsible right across the group for selecting films and negotiating rental agreements with film distributors (booking) and for programming films to match theatre capacities and the different target groups (programming).
MANIA project in an attempt to respond to customer
demand for better quality products.
Every imaginable analysis of the Belgian cinema market
is collected and processed in this department.
“The Last Samurai”, “Brother Bear”, “Harry Potter & the
Prisoner of Azbakan”, “Shrek 2”, “King Arthur” from,
“The Incredibles” and “Bridget Jones: The Edge of
Reason”.
A weaker line-up and the good weather that lasted from
April right through to September badly affected cinema
visitor figures in Belgium. No records were broken, other
than the opening figures for “Lord of the Rings 3: The
Return of the King” (December 2003).
In 2003 some ten films made it past the EUR 2.5 million
box office mark: Finding Nemo with € 5.1 million, Pirates
of the Caribbean with € 4.6 million, Matrix Reloaded
with € 4.5 million, Lord of the Rings 3: The
Return of the King with € 4.3 million in just
two weeks, Bruce Almighty with € 3.7 million and a Belgian product De Zaak
Alzheimer (The Alzheimer Case) with €
3.5 million. This year there were particularly few mid-range scores and no particularly noteworthy films in the French-speaking part of the country.
Numerous market surveys during the year
resulted in the introduction of the CINE-
26
2004 looks very promising, with a small number of very
large productions:
During 2003 Kinepolis profiled itself more and more in
the digital projection field with projects like “Plop and
the Magic Wand” and is now working increasingly on
'alternative' content offerings, with Flemish products,
sport, opera, ballet etc. alongside its traditional
Hollywood product.
5. IT
In 2003 the IT department focused on three major
pillars of IT activity: security, infrastructure and
further integration of the various software packages.
Security
Major systems refinements introduced in 2003 reflect
the evolution of the overall IT scene and the increase
in external threats (viruses, spam, etc.). A significant
improvement was achieved in the degree of security.
Infrastructure
In 2003 the Kinepolis Group took a major step forward
towards centralising applications and modules.
The key example here was the introduction of a central
financial software package.
Integration of software packages
Various automated business processes were
integrated, improving both productivity and the
degree of control of the various processes.
2004
In 2004 we are continuing our ongoing efforts to
improve internal and external security. The process of
centralising the various business processes will
include setting up a data warehouse to form the basis
for the Business Intelligence Department.
The biggest challenge, however, will be the
development of a brand new ticketing application,
including adapting the software to the very specific
present and future requirements of Kinepolis Group.
Annual report 2003
27
Kinepolis Cinema
6. PROJECTION & SOUND
Kinepolis Group’s Projection & Sound Department is
responsible for the general installation and
maintenance of all projection and sound apparatus in
Kinepolis cinemas, as well as for outside cinema
groups.
Annual preventive maintenance and quality checks
were again carried out at all projection booths in
Belgian and French Kinepolis cinemas. Unexpected
technical problems in projection cabins were
immediately put right by our intervention teams, with
almost zero downtime.
We also provide extensive services to outside cinema
chains: Utopia and Cinecity to mention just a few.
Europe's largest cinema mart, the annual Cinema
Expo, used our services for all 35 mm projections at
the RAI auditorium in Amsterdam,
including
supplying, installing and operating of the image and
sound equipment.
In the last quarter of 2003 we began installing various
digital projectors and servers at our Belgian sites,
under an agreement with the companies EVS (Liège)
and Barco (Kortrijk). Our technicians joined the
manufacturers in the installation process in order to
become fully conversant with these innovative
technologies.
The Projection & Sound Department achieved a total
turnover in excess of € 2.5 million.
Digital cinema
After its first promising steps in the world of digital
film projection, Kinepolis Group is now playing the
digital card to the full. Faithful to its tradition as an
innovator and trendsetter, Kinepolis Group has seized
a number of market factors and realities that will
inevitably lead to an innovative, global project. In
Belgium Kinepolis Group has already begun building
an unequalled digital cinema network.
28
Digital cinema has arrived, in terms of both technology
and quality. The one thing still missing is definitive
(inter)national norms. Also lacking is a business model
clearly indicating who will bear the far-from-light
investment costs. This is why we have seen no massive
roll-out of digital cinema to date. Cinema operators
can achieve greater income only if digital projection
enables them to generate additional revenues.
At the same time film distributors will be the first to
reap the benefits of digital projection in the form of
the cheaper print and distribution costs of digital
carriers. For the time being it is unclear whether
cinema operators are yet ready will invest in digital
projection, without any guarantee of return and added
value.
Kinepolis Group has decided, however, to delay no
longer and, as a trendsetter and innovator in cinema
operating, has successfully set up a joint venture
exclusively with leading Belgian players.
Barco, EVS, Screenvision and Kinepolis Group have
together created a feasible business model which will
strengthen the corporate image and international
market position of each of the parties.
As far back as three years ago Kinepolis already
invested in two prototype digital projectors. In
November these were replaced with the latest Barco
DLP models. Straightaway it was decided to acquire
another 8 Barco projectors, with the associated
ACSAR, an additional input module permitting the
projection of alternative material of every kind. Digital
projection is now installed at Kinepolis theatres in
Brussels (2), Antwerp (1), Liège (2), Ghent, Hasselt,
Kortrijk, Braine L’Alleud and Leuven.
EVS provided the server platforms for these 10 digital
theatres.
Screenvision will in the longer term be able to supply
high quality digital screen advertising.
From “Plop” to “Finding Nemo”…
World class
The final link in the digital circle is the offering of
alternative content. To this end Kinepolis Group joined
forces in late 2003 with Alfacam, a company that
operates high definition recording equipment.
Together they convinced Studio 100 to show the film
“Plop and the Magic Wand”, originally intended for
DVD and TV only, in cinema theatres also, using the
existing digital projectors in the Kinepolis theatres.
The experiment proved its worth: the digital film “Plop
and the Magic Wand” tempted 45,000 visitors, placing
it among the top ten films in the first week of
November. The next digital release was the
blockbuster "Finding Nemo", the digital Walt Disney
and Pixar animated film, digitally pre-premièred at
Kinepolis Brussels for one week.
With a digital platform of 10 projectors, Kinepolis
International shares second place with America's AMC.
Only the American LOEWS group scores better with 18
digital projectors.
In 6 out of the 10 theatres Kinepolis will be using the
Barco DP 100 2K projector, the flagship of digital projection technology, and the first of this model to be
installed in Europe. The Kinepolis Group network is
also the first in the world to make use of these high
resolution projectors.
A special digital working group has been set up inside
Kinepolis Group and is working hard to build up this
innovative network.
On Wednesday 26 November followed the national
release, with the film shown also in five additional
Kinepolis digital theatres.
In this way Kinepolis provided the largest-ever digital
release by a single cinema operator in Europe!
Annual report 2003
29
Kinepolis Cinema
7. BI2OS
Increase # public
Phase 2
Guarantee the ultimate cinema experience
Customer
Financials
"Kinepolis wants to offer the ultimate cinema experience
to the big public - with emphasis on the family character
- and to specific customer groups in safe
Phase 3
Optimal use of
geographical opportunities
Optimal use of
multifunctional cinema centers
Phase 2
European multifunctional customer-focused
cinema centers in a long-term profitable and highly
qualitative manner through an innovative and
personalized approach"
Human resources
30
Increase
safety on site
Phase 2
Focus specific
customer groups
Operations
Phase 2
Improve
stakeholder value
OPERATIONAL
INFORMATION LAYER
TACTICAL
BI2OS stands for business intelligence & international
operations support. This department works at the
intelligence and service level.
The business intelligence part focused in 2003 primarily
on starting and defining a Balanced Scorecard (BSC)
project.
All this with the single objective of aligning business
units’ and individual employees’ objectives with the
general company strategy.
For this, work has begun on setting up a strategic data
warehouse (SDW) which will enable operating, tactical
and strategic data to be consulted and visualised via a
single interface.
INFORMATION LAYER
STRATEGICAL
INFORMATION LAYER
In this way the BSC will operate in a fully integrated and
automated manner.
Alongside the BSC project the department also set
about undertaking the necessary feasibility studies and
market analyses.
The service level part is concentrating on providing
services to operations, including operational audits,
defining operating procedures through the production
of manuals, and putting together one of the best
performing mystery shopping programmes in the
sector.
Facility Management is also part of the BI2OS package:
- coordinating and accompanying the implementation of
investment programmes in the various complexes
- site coordination and prevention policy.
Annual report 2003
31
Kinepolis Cinema
8. KINEPOLIS FILM DISTRIBUTION
Kinepolis Film Distribution had an outstanding year in
2003. Income was double that of 2002, and even
higher than in record year 2001. Overhead and
production costs were squeezed further to produce a
larger margin. This success was due entirely to
American productions such as “Gangs of New York”,
“Final Destination 2”, “Kill Bill” vol. 1, “The Hours” and
“Chicago”. Absolute records, however, were broken by
two Flemish films, which together made up around
30% of the year's total. With 737,000 visitors, “The
Alzheimer Case” has been the biggest release of all
time for KFD, whilst “Team Spirit 2”, released on 10
December, has easily equalled audience figures for the
first “Team Spirit”.
32
The first half of 2004 looks like being somewhat
leaner in terms of films, with major suppliers Miramax
and New Line postponing a number of planned
releases to the third quarter of 2004.
High points in 2004 will be “Neverland” with Johnny
Depp, Kate Winslet and Dustin Hoffman, and Flemish
films “Ellektra”, starring Axelle Red in the title role,
and “Steve + Sky”, one of the most eagerly-awaited
films of the year.
For “Dossier K”, the follow-on to “The Alzheimer
Case”, and for “Wind Force 10”, viewers will have to be
patient until 2005.
Kinepolis Real Estate
1. INTERNATIONAL CONCESSIONS
This activity consists of leasing adjacent sites, space
and/or real estate to third parties wishing to set up and
operate restaurants, licensed premised and video and
entertainment centres.
These premises are operated at optimal profitability in
close consultation with the concession holders.
Various concepts are designed to produce perfect
complementarity, in which rival energy gives way to
creative retailing.
A total leisure programme with specific activities
commands constant media attention and of course
promotes the attractiveness of the site. This should
help attract more film visitors to Kinepolis, whilst
producing spin-off income both before and after
cinema visits.
Concretely Kinepolis is developing an action plan
together with its partners directed at visitors’ needs. It
is examining the possibility of combining the cinema
experience with sport and recreation, by for example
including fitness centres and indoor children’s
playparks within its facilities. To achieve this, it is
important that the concept of cinema be interpreted
more widely by the law as covering more than simply
film showings. For this reason work continued in 2003
on a study of the zoning plans for the various
complexes.
Kinepolis assumes that tomorrow’s consumer wants to
be offered a Total Leisure Programme on a single site,
with a variety of services, facilities and leisure
opportunities.
A well thought-out and varied range of activities
stimulates Kinepolis’s concession-holders to do
business successfully, each in its unique discipline.
This will enable Kinepolis in the future to acquire new
rental income without having to cut back existing
sources. The complexes abroad, with their larger
surface areas, are more suited to this approach.
2. PROJECT DEVELOPMENT
Project Development consists of the development
and managing of new cinema projects.
In 2003 this meant the construction of our new
complex in Granada (opening spring 2004), as well as
negotiations for the construction and undertaking of
future projects, including Nancy (opening planned in
spring 2005), Kinepolis Ostend and Kinepolis Bruges
(openings planned in 2006 – 2007).
Annual report 2003
33
HUMAN
RESOURCES
OGETHER
T
E
A
M
VERYBODY
CHIEVES
ORE
“Service with a smile”
The HR part of the intranet focuses our “internal”
client (our employees), including a “who is who”,
organisation charts, function descriptions, etc.
The Kinepolis intranet is scheduled to be launched in
early 2004.
Service is written in capital letters at Kinepolis.
Every customer must be welcomed personally and
warmly by an excellently trained employee.
Well-trained employees contribute in this way to the
organisation's results.
Recruitment
For this reason the HR Department developed a
strategic training policy in 2003, focusing on functionrelated “learning paths” specially developed for our
organisation. Together with Operations it also
developed an extensive training provision ("Kinepolis
Learning Circle") aimed at improving customerfriendliness and the overall functioning of the
organisation. The project, named “SERVICE WITH A
SMILE”, was launched on 01.01.2004.
In 2003 a specific company recruiting policy was
developed with easy-to-use tools for line management,
and the reception of new employees was further
professionalized.
Key projects for 2004
• Implementation of the HR-ERP module
• Reworking the existing assessment procedure
Internal communication
Various business units worked together to develop a
cross-company Intranet involving every department.
Geographic distribution of employees
Geographical area
At december 31 st
2003
2002
Employees
2001
2000
1999
Belgium
France
Spain
Poland
Italy
Switzerland
1 002
309
353
118
41
992
355
340
125
58
45
946
364
446
103
58
44
865
340
237
3
3
/
931
328
210
2
/
/
1 823
1 915
1 961
1 448
1 471
Total
Annual report 2003
35
CORPORATE GOVERNANCE
36
Capital structure
Shareholders structure
The capital of the company amounted at 31.12.2003 to
€ 47,442,919.65, represented by 6,930,778 shares
without nominal value, all enjoying the same rights.
Shareholders structure at 31 December 2003:
The Board of Directors was authorised by the
Extraordinary General Meeting of 17 May 2002 to
increase the company capital in one or more
instalments until 17 July 2007 by a maximum amount
of € 47,442,919.65, and until 17 July 2005 to increase
the issued capital following the publication of a public
take-over bid.
Kinohold bis and CCM&H
GIMV NV (*)
Kinepolis Group
Public
4 419 313
686 860
134 289
1 690 316
63.76%
9.91%
1.94 %
24.39%
Total
6 930 778
100%
In the context of the issue of warrants mentioned
earlier in this report, the Board of Directors made use
of the authorised capital in an amount of € 2 014
215,30, i.e. 294,250 warrants multiplied by the fraction
value.
A proposal will be made to the Extraordinary General
Meeting of 21 May 2004 to further increase the
amount of the authorised capital up to the amount of
the company capital and at the same time renew the
authorisations.
Shareholder
Number of Shares
%
A shareholders agreement has been concluded
between the Bert (Kinohold) and Claeys (CCM&H)
families that contains arrangements relating to the
structuring and composition of the governing bodies
and industrial strategy of the Group.
A second shareholders agreement contains
arrangements between the Bert and Claeys families on
the one hand and GIMV on the other. These concern
mainly restrictions on the transfer of voting securities.
In this way transfers of shares by GIMV are subject to
a preferential right of purchase in favour of the Bert
and Claeys families*.
(*) On 19 March 2004 GIMV sold its entire shareholding in
Kinepolis Group. The above-mentioned stipulations of the
shareholders agreement therefore no longer apply.
Annual report 2003
37
CORPORATE Governance
3. Board of Directors and
committees
Composition of the Board of Directors
The articles of the association state that the Board of
Directors can consist of up to 10 members, at least two
of whom should be regarded as independent of the
reference shareholders and of management.
Directors
End of mandate
Chair
nv HRV, represented by Baron Hugo Vandamme (1) (2) (5)
2005
Co-Chair
Mrs Marie-Rose Claeys-Vereecke (1)(3)
2006
Honorary Chair
Mrs Marie-Suzanne Bert-Vereecke (1) (3)
2006
CEO's
Mr Joost Bert (3)
Mr Florent Gijbels (3)
2005
2005
Directors
Mr Peter Bert (1) (3)
Mr Marc Vercruysse, (1) (4) (6)
Mr André Meers, (1) (2) (9)
nv Euro Invest Management, represented by Mr Philippe Haspeslagh (2) (7)
BVBA Gerard Van Acker, represented by Mr Gerard Van Acker, (1) (2) (8)
2006
2004
2004
2005
2006
1. Non-executive director
2. Independent director
3. Represent the majority shareholders
4. Represents GIMV
5. Chairman of the Board of Directors of Roularta Media Group nv, Vice-Chairman of the Board of Barco nv, Director of Maatschappij van de Brugse
Zeevaartinrichtingen nv, Member of the Supervisory Board of Sara Lee/Douwe Egberts
6. Director of nv Tunnel Liefkenshoek, Managing Director of Domus Flandria nv, of Barco nv and of various GIMV operating companies
7. Chairman of the Board of Directors of Dujardin Foods nv and Quest Management nv, Director of Quest for Growth nv, Capricorn Venture Partners,
Vandemoortele nv and INSEAD.
8. Director of listed companies (BBM,Carestel and Real Software) and of private companies (ABO, Bofort, Language &Computing (chairman), Sabena
Technics (chairman) and Watt Plus).
9. General Manager of the Machiels Group and lecturer at the UIA.
38
Where the shareholding percentage is less than 35%,
Kinohold and/or CCM&H are entitled to put forward
one candidate per tranche of shares representing 5%
of the capital.
Directors are appointed for a maximum term of 6
years and may be reappointed.
The articles of association do not impose any age limit
on the appointments of directors.
At 31 December 2003 the Board of Directors consisted
therefore of 10 persons, four of whom should be
regarded as independent of the reference
shareholders and the management.
Operation of the Board of Directors
The Board of Directors is chaired by Baron Hugo
Vandamme.
As the highest governing body of the company, the
Board of Directors is responsible, in addition to its
statutory tasks, for developing the general policy and
investment plan.
The Remuneration Committee
he Remuneration Committee, set up in 1998 from
members of the Board of Directors, consists of:
• Mr André Meers, chairman
• Mrs Marie-Rose Claeys-Vereecke
• Mrs Marie-Suzanne Bert-Vereecke
• HRV nv, represented by Baron Hugo Vandamme
• Mr Marc Vercruysse
The Managing Directors attend the meetings of the
Remuneration Committee.
The Remuneration Committee is responsible for
drawing up general guidelines for the company's
remuneration policy and for establishing the
objectives, forms of assessment and remuneration of
the managers of the company.
The Remuneration Committee has an advisory role visà-vis the Board of Directors.
The Remuneration Committee met three times in
2003.
It also supervises the daily management.
The Audit Committee
In principle the Board of Directors meets every two
months. Each meeting’s agenda includes at least:
• the monthly financial results of Kinepolis Group and
its subsidiaries;
• newly proposed projects;
• the progress of ongoing projects.
Every year the Board also draws up the annual
accounts, sets the investment budgets for the
following financial year, determines the Group’s short
and long-term strategy and establishes the general
remuneration policy.
According to the articles of association, resolutions
are taken by a majority of votes cast, but in practice
decisions are reached by consensus.
The Board of Directors met 11 times in 2003.
The Audit Committee, which was set up in 2001,
consists of:
• BVBA Gerard Van Acker, represented by Mr Gerard
Van Acker, chairman
• Mrs Marie-Rose Claeys-Vereecke
• Mrs Marie-Suzanne Bert-Vereecke resigned from
the Audit Committee on 17 March 2004.
• nv Euro Invest Management, represented by Mr
Philippe Haspeslagh
• Mr Peter Bert, since 17 March 2004
In 2003 the Audit Committee met five times under the
chairmanship of Mr Gerard Van Acker.
The Audit Committee advises and assists the Board of
Directors in fulfilling its responsibilities with regard to
Annual report 2003
39
CORPORATE Governance
the organisation and control of:
• the internal financial and accounting control
system
• the rules and procedures to be followed in drawing
up the annual accounts;
• the company’s audit, accounting and financial
reporting processes.
The auditor, the chief financial officer and the
managing directors attend the meetings of the Audit
Committee.
Remuneration
In 2003 a total of € 663,885 was paid to the members
of the Board of Directors, compared with € 547,554 in
the previous year.
In 2003 a total of € 1,543,294 was paid as
remuneration to the executive directors and to
management, compared with € 1,489,780 in 2002.
60,000 warrants were also allotted.
Day-to-day management
The internal auditor reports directly to the Audit
Committee, which establishes the auditor's annual
work programme
40
Day-to-day management, is undertaken by the two
Managing Directors (CEOs), Mr Joost Bert and Mr
Florent Gijbels.
ANNUAL ACCOUNTS
OF K INEPOLIS G ROUP
Consolidated annual accounts
Statement of sources and uses of funds
Notes to and discussion of the consolidated annual accounts
Auditor's report
42-45
46
47-66
67
Discussion of the ordinary accounts
68-69
Ordinary balance sheet of Kinepolis Group nv
70-71
Income statement
72
Appropriation of the result
73-80
Social balance sheet
81-82
Valuation rules
83-84
Transition to IAS / IFRS
85
Consolidated annual accounts of Kinepolis Group
CONSOLIDATED
ANNUAL ACCOUNTS
ASSETS (in .000 EUR)
FIXED ASSETS
Formation expenses
Intangible assets
Positive consolidation differences
A. Land and buildings
B. Plant, machinery and equipment
C. Furniture and vehicles
D. Leasing & similar rights
E. Other tangible assets
F. Assets under construction and advance payments
A. Enterprises accounted for using the equity method
1. Participating interests
2. Amounts receivable
B. Other enterprises
1. Participating interests and shares
2. Amounts receivable and cash guarantees
CURRENT ASSETS
Amounts receivable after 1 year
A. Trade debtors
B. Other amounts receivable
Stocks and contracts in progress
A. Stocks
1. Raw materials and consumables
2. Work in progress
3. Finished goods
4. Goods purchased for resale
5. Real estate property intended for resale
6. Advance payments
B. Contracts in progress
Amounts receivable within one year
A. Trade debtors
Investments
A. Own shares
B. Other investments and deposits
Cash at bank and in hand
Deferred charges and accrued income
TOTAL ASSETS
42
2003
2002
263 348.33
552.27
2 150.69
19 680.01
240 390.67
184 640.21
27 611.61
2 896.77
15 225.29
677.40
9 339.40
574.68
280 570.83
1 746.65
1 559.98
16 515.50
260 324.89
195 701.84
34 980.34
3 800.94
21 097.16
286.95
4 457.66
423.81
574.68
90.15
484.53
423.81
65.38
358.43
65 861.68
21 040.62
77 655.80
24 205.34
21 040.62
2 078.00
1 794.49
59.39
24 205.34
1 716.75
1 601.88
147.31
1 735.10
1 454.57
283.51
157.56
624.10
533.47
968.03
168.03
800.00
12 282.38
1 335.08
114.87
32 016.72
13 562.06
18 454.66
430.35
430.35
329 210.00
358 226.63
27
13
13
1
1
12 732.42
6 554.22
LIABILITIES (in .000 EUR)
CAPITAL AND RESERVES
Capital
Share premium account
Revaluation surpluses
Consolidated reserves
Consolidation differences
Translation differences
Investment grants
MINORITY INTERESTS
PROVISIONS, DEFERRED TAX AND LATENT TAX LIABILITIES
A. Provisions for liabilities and charges
1. Pensions and similar obligations
2. Taxation
3. Major repairs and maintenance
4. Other liabilities and charges
B. Deferred tax and latent tax liabilities
CREDITORS
Amounts payable after one year
A. Financial debts
1. Subordinated loans
2. Unsubordinated loans
3. Leasing and other similar obligations
4. Credit institutions
5. Other loans
D. Other debts
Amounts payable within one year
A. Current portion of amounts payable within one year
B. Financial debts
2. Other loans
C. Trade debt
1. Suppliers
D. Advances received on contracts in progress
E. Taxes, remuneration and social security
1. Taxes
2. Remuneration and social security
F. Other amounts payable
Accrued charges and deferred income
TOTAL LIABILITIES
Annual report 2003
2003
2002
61 395.31
47 442.92
62 172.06
47 442.92
2 322.39
2 906.80
(1 815.64)
10 538.84
495.72
3 058.14
(96.43)
11 271.71
528.38
2 361.11
10 092.23
3 939.40
126.00
10 271.97
3 719.94
129.17
63.56
3 749.85
6 152.83
62.63
3 528.14
6 552.03
257 194.08
139 247.43
139 218.91
7 436.81
283 421.49
160 383.15
160 383.15
5 949.45
16 526.83
115 014.19
241.08
28.52
99 958.85
25 444.49
8 047.26
8 047.26
19 247.72
134 725.85
460.13
108
26
30
29
36 842.36
36 842.36
0.00
17 605.20
11 770.87
5 834.32
12 019.55
17 987.80
495.85
669.33
245.24
915.35
329.89
37 059.37
37 059.37
144.13
11 823.72
6 142.87
5 680.85
2 554.06
14 542.49
329 210.00
358 226.63
43
CONSOLIDATED
ANNUAL ACCOUNTS
INCOME STATEMENT (in .000 EUR)
Operating income
A. Turnover
B. Increase/decrease in stocks of finished goods,
works and contracts in progress
C. Fixed assets – own construction
D. Other operating income
Operating charges
A. Raw materials, consumables and goods for resale
1. Purchases
2. Increase/decrease in stocks
B. Services and other goods
C. Remuneration, social security costs and pensions
D. Depreciation and amounts written off formation expenses and
intangible and tangible fixed assets
E. Amounts written off stocks, orders in progress and trade debtors.
F. Increase/decrease in provisions for liabilities and charges
G. Other operating charges
H. Operating charges capitalized as restructuring costs
I. Amortization of positive consolidation differences
Operating profit/loss
Financial income
A. Income from financial fixed assets
B. Income from current assets
C. Other financial income
Financial charges
A. Interest and other debt charges
B. Amounts written off positive consolidation differences
C. Increase/decrease in amounts written off current assets
D. Other financial charges
Result from ordinary activities before tax
44
2003
2002
198 072.00
191 455.44
213 474.27
207 176.18
208.56
666.57
5 751.44
(183 631.64)
70 003.22
70 248.41
(245.19)
43 749.87
32 108.74
604.39
828.81
4 864.89
(202 751.18)
74 096.52
74 405.31
(308.79)
47 372.86
34 755.60
24 754.01
838.10
(141.89)
9 481.46
30 137.71
809.31
1 165.97
11 939.79
2 838.13
14 440.37
2 634.62
430.79
74.17
2 129.67
(13 451.26)
10 094.21
2 473.41
10 723.09
5 756.15
350.74
1 484.11
3 921.30
(22 390.75)
15 226.85
(195.33)
3 552.37
3 623.73
668.60
6 495.29
(5 911.50)
INCOME STATEMENT (in .000 EUR)
Extraordinary income
A. Adjustments to depreciation of and to other amounts written
off intangible and tangible fixed assets
B. Adjustments to amounts written off consolidation differences
C. Adjustments to amounts written off financial fixed assets
D. Adjustments to provisions for extraordinary liabilities and charges
E. Gain on disposal of fixed assets
F. Other extraordinary income
Extraordinary charges
A. Extraordinary depreciation of and amounts written off formation expenses,
B. Extraordinary amounts written off positive consolidation differences
C. Amounts written off financial fixed assets
D. Provisions for extraordinary liabilities and charges
E. Loss on disposal of fixed assets
F. Other extraordinary charges
G. Extraordinary charges capitalized as restructuring costs
H. Negative consolidation differences
Net profit for the financial year before tax
Transfer from deferred tax and latent tax
Transfer to deferred tax and latent tax
Income taxes
A. Income taxes
B. Adjustment of income taxes and write-back of tax provisions
Consolidated result
Share in the results of the enterprises accounted for using the equity method:
Consolidated result
A. Share of minority interests
B. Share of the group
Annual report 2003
2003
2002
2 488.54
4 035.72
280.39
2 195.73
42.81
(283.14)
250.00
3 592.81
162.52
(994.42)
24.05
104.99
149.90
28.25
261.66
123.46
585.26
5 829.13
1 099.27
(362.22)
(4 472.83)
(4 494.90)
22.07
2 093.34
(2 870.20)
1 017.13
(412.78)
(5 573.84)
(5 573.84)
2 093.34
(625.59)
2 718.95
(7 839.68)
69.75
(7 769.94)
(2 024.66)
(5 745.27)
45
CASH
FLOW STATEMENT
CASH-FLOW (in .000 EUR)
2003
2002
OPERATING ACTIVITIES
Operating profit
Depreciation and amounts written off
Amounts written off stocks and trade debtors
Amortization of positive consolidation differences
Gains on the disposal of fixed assets
Other extraordinary income
Losses on the disposal of fixed assets
Other extraordinary charges
Gross self-financing margin
Taxes
Cash-flow
14 440.37
24 754.01
838.10
(141.89)
2 838.13
2 195.73
42.81
(149.90)
(28.25)
44 789.10
(4 472.83)
40 316.27
10 723.09
30 137.71
809.31
1 165.97
2 473.41
3 592.81
162.52
(123.46)
(585.26)
48 356.11
(5 573.84)
42 782.27
WORKING CAPITAL
Net working capital flow
28 567.73
37 474.61
(15 885.19)
(15 885.19)
803.20
(7 151.92)
(6 348.72)
(151.10)
430.79
74.17
353.85
684.83
350.74
1 484.11
2 519.68
FINANCING ACTIVITIES
Financing through long-term debt
Financing through short-term debt
Interest and other debt charges
Other financial income
Other financial charges
Net cash flow from financing activities
(17 572.71)
(23 370.71)
(10 094.21)
2 129.67
(3 552.37)
(52 460.34)
(13 920.89)
(45 885.44)
(15 226.85)
3 921.30
(6 495.29)
(77 607.18)
NET MOVEMENT IN LIQUID ASSETS
892.32
(1 179.34)
13 162.76
14 250.41
1 087.65
(195.33)
892.32
15 010.70
13 162.76
(1 847.93)
668.60
(1 179.34)
INVESTMENTS
Net (investments) / disposals
Changes in debts as a result of investment
Net cash flow from investments
FINANCIAL INVESTMENTS
Financial investments
Income from financial fixed assets
Income from current assets
Net cash flow from financial investments
LIQUID ASSETS (Cash at bank and in hand + short-term investments)
Beginning of the period
End of the period
Movements
Amounts written off current assets
Movement of Liquid Assets
46
NOTES
TO AND DISCUSSION OF THE
CONSOLIDATED ANNUAL ACCOUNTS
1. Consolidation criteria
All Group and associated companies are included in the Kinepolis Group consolidation according to the following
consolidation methods:
Full consolidation: this method is applied to those companies where Kinepolis Group nv holds more than half the shares
or over which it exercises de facto control.
Proportional consolidation: this method is applied to those companies which are controlled by the Kinepolis Group
together with other shareholders.
Equity method: this method is applied to those companies where the Kinepolis Group has a significant influence in guiding
policy.
2. Changes to the scope of consolidation
Newly included participations:
None
Participations sold during the year:
RMB entertainment nv (Belgium)
Cinecity S.p.a (Treviso, Italy)
Changes in the participation percentage:
Forvm Kinepolis sa (France): The participating interest was increased in July 2003 from 50% to 79.92%. This company
was therefore fully integrated during the second half of the year.
Kinepoleast BV (the Netherlands): At the end of 2003 the balance (13.37%) of the participation held by Déficom was
taken over, giving Kinepolis 100% ownership.
Liquidations:
Devicos nv in liquidation.
Regionale Uitgeversmaatschappij (RUM) nv in liquidation.
Frontline bvba in liquidation.
Merger/contribution:
Imagisoft was merged into Imaginbraine sa.
3. Name changes
None
Annual report 2003
47
4. Scope of consolidation
List of fully-consolidated subsidiaries
COMPANY NAME
Bruvision sa
CCE Liège sa (2)
CCI&H sa
Decatron sa
Eden Panorama sa (Max Linder)
European Mega Cinema sa (EMC)
European Mega Cinema sa (EMC)
France Mega Cinema Immo sa (FMCI)
Imagibraine sa
Immo den Ouden Bampt sa
Immo Roc sa
Kine Invest
Kinepoleast bv
Kinepolis Espana sa
Kinepolis Film Distribution (KFD) sa
Kinepolis Film Production (KFP) sa
Kinepolis Granada
Kinepolis Holding bv
Kinepolis Jerez
Kinepolis Le Château du cinéma sa
Kinepolis Madrid sa
Kinepolis Mega sa (1)
Kinepolus Mulhouse
Kinepolis Multi sa (3)
Kinepolis Nacka
Kinepolis Paterna
Kinepolis Poznan Spzoo
Kinepolis St-Julièn-lès-Metz
Kinepolis Schweiz AG*
Kinepolis Spzoo
Kinepolis Thionville sa
Kinepolis Immo Thionville
Kinepolis Nancy
Kinepolis Prospection
Majestiek International sa
Forum Kinepolis sa
Megatix sa
CITY
Brussels
Hasselt
Herk-de-Stad
Brussels
Paris
Luxembourg
Lomme
Metz
Braine L'Alleud
Herk-de-Stad
Herk-de-Stad
Pozuelo de Alarcon
Middelburg
Pozuelo de Alarcon
Brussels
Brussels
Pozuelo de Alarcon
Middelburg
Pozuelo de Alarcon
Lomme
Pozuelo de Alarcon
Brussels
Mulhouse
Courtrai
Göteborg
Pozuelo de Alarcon
Poznan
Metz
Schaffhausen
Poznan
Metz
Metz
Lomme
Lomme
Luxembourg
Nîmes
Brussels
C
B
B
B
B
F.
L
F.
F
B
B
B
S
N
S
B
B
S
N
S
F
S
B
F
B
SU
S
P
F
SU
P
F
F
F
F
L
F
B
(1) Kinepolis Mega nv comprises the activities of Kinepolis nv and Metropolis nv.
(2) CCE Liège sa : Opéra Liège, Palace Liége and Group Claeys R.
(3) Kinepolis Multi nv comprises the activities of Leuven, Hoog-Kortrijk, Ghent and Hasselt.
48
VAT
BE 418.314.676
BE 459.469.796
BE 455.740.543
BE 424.519.114
FR 02340483221
LU 19942205972
FR 20399716083
FR 51398364331
BE 462.688.911
BE 455.729.358
BE 459.466.234
ESA 824.896.59
NL 807225605B01
ESA 814.870.27
BE 445.372.530
BE 459.997.061
ESA 828.149.55
NL 807760420B01
ESA 828.149.22
FR 60387674484
ESA 828.149.06
BE 430.277.746
FR 18404141384
BE 434.861.589
556.589.2295
ESA 828.149.14
NIP 5252129575
FR 43398364331
CH 2903013216-5
NIP 5252184717
FR 09419251459
FR 10419162672
FR 00428192819
FR 45428192058
FR 86421038548
BE 462.123.341
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
79,92
100
List of proportionally consolidated companies
None
List of companies accounted for using the equity method
None
List of non-consolidated subsidiaries or associated companies
Name
Kinepolis Czeska
Cinemaxx AG
City
Prague
Hamburg
Country
CZ
D
R
1
2
%
100
25
R: Reasons for non-consolidation:
1: minimal impact on consolidation, inclusion would involve disproportionate costs.
2: shares held solely with a view to subsequent sale.
List of companies that are neither subsidiaries or associated companies
Name
Eurocasino nv
Kortrijk expo cvba
Location
Brussels
Kortrijk
Country
B
B
VAT
BE 467.730.238
BE 405.979.048
%
19
5. Accounting and valuation rules applied in preparing the consolidated
financial statements
A. General
The accounting principles and valuation rules used in preparing the consolidated accounts comply with the Belgian
accountancy legislation and the provisions of the Royal Decree of 30 January 2001 and the earlier Royal Decree of 6
March 1990. The consolidated financial statements are prepared as at 31 December, which is the balance sheet date of
the parent company Kinepolis Group nv and all consolidated companies.
The consolidated financial statements are prepared after the distribution of profits by Kinepolis Group nv. The financial
statements of the other consolidated companies are included before appropriation of profits.
The valuation rules used for the consolidation are those of the parent company Kinepolis Group nv, supplemented by
certain rules specific to the consolidation. Where there are significant differences, recalculations are always carried out
for companies included by the full and proportional consolidation methods. Until now this has only given rise to
adjustments in connection with the depreciation of tangible fixed assets. The other valuation rules are virtually the
same for the entire Kinepolis Group and the remaining departures have no material influence on the consolidated
position as indicated below.
After merging the balance sheets and income statements, as recalculated in accordance with the group valuation rules,
the intercompany balances and transactions and the associated results are eliminated. By analogy with last financial
year, the turnover of Decatron nv was offset against the fixed assets produced and the immediate costs within Decatron.
This concerns invoices issued for specific Kinepolis projects undertaken by Decatron.
Annual report 2003
49
B. Valuation Rules
Formation expenses and intangible fixed assets
Formation expenses and the costs of increases in capital are valued at cost and amortized at 20% per year. Loan costs,
if any, are amortized over the term of the loan. Intangible fixed assets are included on the balance sheet at cost. Annual
amortization is applied by the straight-line method pro rata temporis from the month of acquisition at 20% a year.
The consolidation differences represent the divergence between the purchase cost on the one hand and the
corresponding share of net equity on the other.
Insofar as these differences originate in the over- or undervaluation of certain asset or liability items, they are
appropriately allocated. The remaining difference is included in the consolidated accounts under "Consolidation
differences" in the reported assets or liabilities depending on whether the price is greater or less than the share in
equity (recalculated if necessary).
When drafting Kinepolis Group nv’s first consolidated financial statements as at 31 December 1996, the opportunity was
taken to calculate the initial goodwill at the starting date of the financial year to which the first consolidated financial
statements relate, in this case 1 January 1996 (art. 50 of the Royal Decree of 6 March 1990).
Goodwill is normally amortized on a straight-line basis over a period of 10 years, but the period actually adopted
depends on an individual assessment by the Board of Directors in relation to the anticipated economic useful life.
Additional or exceptional amortization is applied to goodwill when, as a result of changes in economic circumstances,
the original values can no longer be justifiably retained on the consolidated balance sheet. Negative consolidation
differences remain unchanged up to the point when the participating interest concerned is sold, if at all.
Tangible fixed assets are valued at cost including acquisition expenses or at contributed value less cumulative
depreciation plus the respective capitalized interest, where this relates to the period before they became operational.
Straight-line depreciation is applied for consolidation purposes on the basis of the anticipated economic useful life of
the assets concerned, without taking account of any residual value of these assets.
Car parks
Buildings
Furnishings
Computers
Plant and machinery
Furniture and vehicles
3.33 %
5%
6.67 to 20%
33 %
10 to 20%
10 to 33%
Investments in a completely new complexes are depreciated pro rata from the month in which they become ready for
use. Other investments are depreciated pro rata temporis as from the month of acquisition. Expenditure on extensions,
major renovations and improvements is capitalized. Expenditure on repairs, maintenance and replacements that does
not materially extend the economic life of the assets is recorded as costs.
Financial Fixed Assets
The book value of participating interests in companies to which the equity method is applied is adjusted to the
proportional share of the net equity of these companies, determined according to the consolidation rules.
The participating interests mentioned under the heading ‘Other companies’ are valued at purchase cost after applying
a write-down, where applicable, where the reduction in value is permanent.
50
Stocks
Stocks are valued at cost or at market value (realizable value) if lower. The purchase cost is determined by the FIFO
method.
Contracts in progress are valued at production price by the ‘completed contract method’.
Amounts receivable and payable
Amounts receivable and payable are valued on a nominal value basis. Reductions in value are recorded on receivables
that are wholly or partly uncertain or doubtful.
Short-term investments and cash at bank and in hand
Fixed-interest securities and shares are valued at purchase cost, including additional charges, or at their market value
if it is lower.
These accounts are recorded and valued at purchase cost and included in the balance sheet in respect of the portion
which is carried forward to next year.
Group reserves include the reserves and results carried forward of the consolidating company, plus the Group’s share in
the results of the other fully and proportionally consolidated companies and companies to which the equity method has
been applied, after deducting any distributions.
For financial statements of subsidiaries expressed in a currency other than EUR, all items on the balance sheet are
converted at the closing rate and those on the income statement at the average rate. Capital and reserves are retained
at their historic value in EUR. The difference that therefore arises in relation to the closing rate is transferred to the
translation differences account. The difference between the closing rate and the average rate for the results is also
transferred to this account.
On the basis of a cautious estimate, the Board of Directors decides which provisions should be made to cover the cost
of major repairs and extensive maintenance and any other liabilities and charges that are probable or certain on the
balance sheet date, but whose extent is not yet precisely known.
Deferred taxes and latent tax
Deferred taxes are calculated on the temporary differences between the fiscal result and the result calculated according
to Group rules, at the applicable rates for the companies concerned.
No latent tax assets are included in the Kinepolis Group’s consolidated accounts. Any latent tax liabilities may be
reduced by calculated latent tax assets, but only up up to the amount of these latent tax liabilities.
Conversion of foreign currency
Receivables and debts expressed in foreign currency are converted at the end of the financial year at the closing rate.
The resulting translation differences are charged to the income statement if the calculation per currency gives rise to
a negative difference and are included under accrued charges and deferred income if the calculation for that currency
gives rise to a positive difference.
Annual report 2003
51
C. Change in the valuation rules
The following adjustments were made to the valuation rules in 2003:
* Tangible fixed assets:
Old rule: “Investments in completely new complexes are depreciated pro rata from the month in which they become
ready for use.
A full year’s depreciation is taken on other investments in the year in which they are acquired.”
New rule: “Investments in completely new complexes are depreciated pro rata from the month in which they become
ready for use.
Other investments are depreciated pro rata temporis from the month of acquisition."
This change has not given rise to any restatements of existing assets.
* Latent taxes:
Old rule: “No latent tax assets are included in Kinepolis Group’s consolidated accounts. Any latent tax assets in the
company accounts of subsidiaries are reversed to the extent that they exceed latent tax liabilities. Provision for deferred
taxes on realized capital gains and on investment grants is retained in full as entered on the company financial
statements.”
New rule: “No latent tax assets are included in Kinepolis Group’s consolidated accounts. Existing latent tax liabilities may,
however, be reduced by calculated latent tax assets, but only up to the amount of these latent tax liabilities.”
The positive impact of this change on the result for the financial year amounts to € 0.4 million.
6. Formation expenses
Formation expenses (in .000 EUR)
Net book value at the end of the preceding period
New expenses for the period
Other changes
Amortisation
Net book value at the end of the period
incorporation and capital increase expenses, loan issue expenses and other formation expenses
VII: Statement of formation expenses
Formation expenses fell mainly as a result of amortization recorded during the financial year.
52
1 746.65
132.75
(266.41)
(1 037.69)
(23.04)
552.27
552.27
7. Intangible fixed assets
INTANGIBLE FIXED ASSETS (in .000 EUR)
A. Acquisition cost
At the end of the preceding period
Movements for the period
Acquisitions including fixed assets - own construction
Sales, transfers and decommissioning
Transfers from one heading to another
Other movements
At the end of the period
C. Amortization and amounts written off
Recorded
Cancelled after sales, transfers and decommissioning
Other changes
D. Net book value at the end of the period
Concessions, licences, etc.
6 182.02
724.46
669.13
(27.33)
(282.50)
7 265.79
4 622.04
491.11
433.02
(8.73)
(422.34)
5 115.10
2 150.69
VIII Statement of intangible fixed assets
The main investments by Kinepolis group in 2003 were in a new ERP package and a Balanced Scorecard application. The
raising of the shareholding in the Nîmes (France) complex to 80% and the attendant change in consolidation method
also increased this heading (€ 458.99). After amortization and other changes, the final balance of intangible fixed
assets is € 2.15 million, consisting mainly of software licences and the business value (amortizable) of the abovementioned Nîmes complex.
8. Positive consolidation differences
Positive consolidation differences (in .000 EUR)
Net book value at end of preceding period
Cancelled after sales, transfers and decommissioning
New differences during the period
Cancellation (Treviso)
Amortization
Net book value at end of period 19 680.01
16 515.50
7 063.39
(1 060.75)
(2 838.13)
19 680.01
XII. Statement of consolidation differences
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 later periods.
In 2003 positive consolidation differences rose significantly with the acquisition of Déficom’s holding in Kinepoleast, the
holding company for the complex in Poznan, Poland. The capital increase in the Nîmes (France) complex also produced
an increase.
The company’s accounting rules require these consolidation differences to be amortized over 10 years. Amortization
during 2003 amounted to € 2.8 million, giving a net book value of € 19.7 million.
Annual report 2003
53
9. Tangible fixed assets
Tangible fixed assets declined in 2003 from € 260.3 million to € 240.4 million.
Investments of € 9.2 million are significantly lower than in previous years (2002: € 13.8 million). The largest investments
relate to the new complexes at Granada (Spain) and Nancy (France), adaptations to the parking facilities at Lomme (France)
and replacement investments.
Sold and decommissioned assets had a net book value of € 1.3 million.
The changes in the scope of consolidation have had the effect of increasing this heading by € 1.6 million. Most of this
increase is at Nîmes, which following the capital increase is now fully, instead of proportionally, consolidated.
Depreciation during the year amounted to € 23.2 million, which is € 4.7 million less than in 2002 (€ 27.9 million).
The falling parities of the Polish zloty and the Swiss franc produced translation differences which reduced the book value
of fixed assets by a net € 5.6 million.
Statement of tangible assets
(in .000 EUR)
A. Acquisition cost
Movements during the period:
Acquisitions including fixed assets
Own construction
Sales, transfers and decommissioning
Other changes
Land &
Building
Plant,
mach. &
equipment
Furniture &
vehicles
Leasing &
tangible
assets
Other
Assets in
tangible production
assets
& prep.
289 253.70
94 049.09
10 889.27
28 944.88
5 279.08
4 457.67
1 162.11
(202.42)
(1 208.70)
(3 200.24)
6 092.88
291 897.33
2 708.33
(1 671.50)
(54.74)
(962.57)
(2 201.35)
91 867.26
252.26
(137.33)
2 616.19
(322.39)
241.51
13 539.51
14.46
1.20
5 019.95
(512.87)
478.49
(145.00)
41.16
9 339.40
59 068.75
7 088.33
7 847.72
4 992.14
12 929.37
(1 037.77)
46.33
(239.76)
(1 140.96)
64 255.66
7 559.07
(115.14)
2 584.53
(91.28)
88.53
10 642.74
1 087.77
1 648.99
27 611.60
2 896.76
15 225.29
15 225.29
C. Depreciation and amounts written down
93 551.86
Recorded
Transfers and decommissioning
(71.89)
Transferred from one heading to another
157.04
(202.25)
Other changes
892.99
107 257.12
D. Net book value at the end
of the period
Land and buildings
IX. Statement of tangible fixed assets
54
184 640.21
(529.58) (3 095.68)
(1 689.32)
(3 643.64)
23 096.80 2 184.60
(523.56) (3 484.93)
(161.41)
(940.23)
7 871.51 1 507.21
677.40
9 339.40
10. Financial fixed assets
Financial fixed assets (in .000 EUR)
Acquisitions
Sales and disposals
Other changes
Share of result for the financial year
Other enterprises
65.38
25.00
(0.23)
90.15
2. Amounts receivable and guarantees
Mutations de l'exercice:
Additions
Reimbursements
Other changes
358.43
155.29
(29.19)
484.53
X: Statement of financial fixed assets
There were almost no changes in financial fixed assets during 2003. The acquisition of the non-consolidated
participation mentioned above refers to Kortrijk Expo cbva, the company that operates the parking lot for the Kortrijk
(Belgium) complex.
11. Amounts receivable after one year
Amounts receivable after one year consist mainly of the long-term portion of investment grants attributed to the
Lomme, Paris (Max Linder), Metz and Nîmes projects by the French government via the CNC (Centre National de la
Cinématographie). Investment grants are included, after deducting deferred taxes, under the equity heading
“investment grants” and are released into income pari passu with the depreciation of the various underlying
investments. Disbursement of the investment grant by the CNC is directly linked to the taxes paid on cinema tickets sold.
In 2003 these amounts receivable were discounted to their present value for the first time, with a negative income
effect of € 0.54 million. The updating of the receivable in 2003 had a negative impact of € 0.54 on income.
Amounts receivable after one year (in .000 EUR)
Lomme
Metz
Nîmes
Max Linder
Discounting of receivables
Other
14 623.22
6 159.74
377.01
415.55
(537.23)
2.33
21 040.62
Annual report 2003
55
12. Stocks and contracts in progress
Stocks and contracts in progress (in .000 EUR)
Raw materials and consumables
Goods for resale
Technical support (Decatron)
Cinema operation
Contracts in progress
31/12/2002
147.31
1 454.57
773.35
681.22
114.87
1 716.75
31/12/2003
59.39
1 735.10
897.68
837.42
283.51
2 078.00
The stock of raw materials and consumables consists of the maintenance stores and smaller repair materials held by
various operating companies.
The stock of goods for resale can be broken down into those held by Decatron, consisting mainly of goods for the repair
and/or maintenance of sound, projection and informatics equipment (for own and third party complexes) and the stock
of snacks and drinks at the various complexes.
The contracts in progress item represents the costs already incurred by Decatron in the construction of new
complexes, more specifically at Nancy (France) and Granada (Spain).
13. Amounts receivable within one year
Trade debtors
The following table gives a comparison of trade debtors at balance sheet date, broken down by type of activity:
Trade debtors (in .000 EUR)
Cinema operations
Other activities
At end of the period
31/12/2002
11 783.80
1 778.27
13 562.07
31/12/2003
11 123.88
2 500.21
13 624.09
Unlike in previous years, the trade debtors of holding companies are now included under cinema operations, this being
the activity to which they relate.
Trade debtors includes under ‘other activities’ now consist mainly of outstanding receivables of KFD (distribution) and
Decatron (technical services). The increase in trade debtors under other activities is due almost entirely to the much
increased level of activity at KFD.
Other amounts receivable
The following table gives a comparison of other amounts receivable at balance sheet date, broken down by type of
activity:
Other amounts receivable (in .000 EUR)
Cinema operations
Other activities
56
31/12/2002
13 838.95
4 615.71
18 454.66
31/12/2003
12 928.37
605.09
13 533.46
This heading consists primarily of:
Recoverable VAT balances to be recovered
Recoverable taxes
Investment grants to be received within the year under the French CNC scheme.
•
•
•
The recovery of substantial VAT amounts by Decatron in 2003s significantly reduced the balance of other amounts
receivable-other activities.
14. Short-term investments and cash at bank and in hand
Own shares
The value of the own shares held by Kinepolis Group nv can be derived from the table below:
Own shares (in EUR)
31/12/2002
Value at the end of the period
430 345
Number of shares
53 726
Average price per share
8.01
Euronext closing price
8.01
Latent capital gain
0
The ‘own shares’ heading shows a latent capital gain € 906 732 at the end of 2003.
31/12/2003
1 168 033
134 289
8.70
15.45
906 732
Short-term investments and cash at bank and in hand
A cash pooling system ensures that temporary surpluses in one company are set of against cash deficits in another
company under a so-called ‘zero balancing system'.
The shares in CinemaxX AG (3 million shares) were fully written off in 2001. Kinepolis Group is still endeavouring to sell
these shares, but the market conditions are far from favourable.
15. Deferred charges and accrued income
This item consists primarily of expenditure already incurred for subsequent financial periods. The significant change
from 2002 relates mainly to the absence of the advance lease rental payment at Cinecity Treviso, that was sold in 2003.
16. Equity
The following table gives a view of the composition and evolution of the consolidated equity of the Kinepolis Group
(In .000 EUR)
Capital
Investment grants
TOTAL EQUITY
31/12/2002
47 442.92
495.73
3 058.14
(96.43)
11 271.71
62 172.07
+
2 718.94
(883.54)
8.74
2 727.68
(8.74)
(883.54)
(151.34)
(1 727.95)
(732.87)
(3 504.44)
31/12/2003
47 442.92
486.99
1 835.40
2 906.80
(1 815.64)
10 538.84
61 395.31
‘XI. Statement of consolidated reserves’ is incorporated into the above table.
Annual report 2003
57
The above table shows that equity remained almost unchanged during 2003, the year, with the positive impact of the
result for the period largely neutralized by the negative effect of the translation differences owing to the loss of value
against the euro of the Polish zloty and the Swiss franc. Negative consolidation differences fell with the sale or
liquidation of a number of companies
Negative consolidation differences (in .000 EUR)
Net book value at the end of the preceding period – fully consolidated companies
Changes
Net book value at the end of the period – fully consolidated companies
Net book value at the end of the preceding period – equity-consolidated companies
Changes
Net book value at the end of the period
31/12/2003
2 958.85
(52.06)
2 906.79
99.29
(99.29)
0.00
XII. Statement of consolidation differences
Investment grants comprise the portion not yet released to income, after deduction of relevant deferred taxation, of
investment grants received from the Belgian government for the cinema complex in Hasselt and from the French
government (CNC) for the Lommes, Metz, Max Linder (Paris) and Nîmes projects. These grants are taken into income
pari passu with the depreciation of the various elements of the underlying investments via the financial income heading.
Changes in investment grants are shown in the table below:
(in .000 EUR)
31/12/2002
Hasselt
73.88
Metz
3.300.74
Lomme
7 764.57
Max Linder
0.03
Nîmes
132.49
Investment grants
11 271.71
Change due to shift in consolidation method
Attribution to minority interests (20.08%)
+
561.84
561.84
(8.84)
(328.56)
(832.04)
(0.03)
(114.75)
(1 284.22)
Autres
(10.48)
(10.49)
132.50
(142.98)
31/12/2003
65.05
2 972.18
6 932.53
0.00
569 08
10 538.84
As this table shows, a new subsidy has been received for Nîmes, whilst the subsidy received in Paris has now been fully
released into income. Finally, the capital increase at Nîmes has also affected this item as explained above.
58
17. Minority interests
Minority interests record the share held by third parties in the equity of the companies in question. The changes in 2003
are due primarily to changes in the shareholding percentages of the companies concerned:
(in .000 EUR)
Treviso
Kinepoleast
Kinepolis Poznan
Kinepolis Spzoo
Nîmes
Minority interests
31/12/2002
1 334.78
2 955.25
(420.29)
(1 508.63)
2 361.11
+
528.38
528.38
(1 334.78)
(2 955.25)
420.29
1 508.63
(2 361.11)
31/12/2003
0.00
0.00
0.00
0.00
528.38
528.38
18. Provisions for liabilities and charges, deferred taxes and latent tax
liabilities
This heading consists of the provisions made by individual companies for pensions, major repair and maintenance work
and other liabilities and charges. The provisions for liabilities and charges amounted to € 3.94 million at the end of the
year. During 2003 a provision for contractor’s claims in Poland was written back in an amount of € 0.9 million.
Deferred taxes and latent tax liabilities
Deferred taxes relate entirely to the future tax effect of the release of investment grants into income, as mentioned
above.
Latent tax liabilities relate to theoretical taxation on the difference between depreciation charges as recorded in the
present consolidation, and fiscally accepted depreciation rates. Since 2003 the valuation rules have been altered in that
where fiscally carryforwardable losses exist, these latent tax liabilities are reduced by the tax benefits deriving from
these carryforwardable losses. Latent tax assets are, however, never recorded. The change had a positive income impact
of € 0.4 million.
(in .000 EUR)
Hasselt
Metz
Lomme
Max Linder
Nîmes
Deferred taxes
Latent tax liabilities
Deferred taxes and latent tax liabilities
31/12/2003
45.87
1 553.76
3 624.08
0.00
372.25
5 595.96
556.87
6 152.85
Annual report 2003
59
19. Amounts payable
Amounts payable at the end of 2003 and their development over time are shown below:
(in .000 EUR)
Long-term financial debts
Current portion of long-term financial debts
Short-term financial debts
Trade debts
Advances received
Taxes
Remuneration and social security
Other amounts payable
Total
31/12/2002
160 383.15
26 669.32
30 245.24
37 059.37
144.13
6 142.87
5 680.85
2 554.05
14 542.50
283 421.49
31/12/2003
139 218.91
25 444.49
8 047.26
36 842.36
31/12/2002
160 383.15
26 669.32
30 245.24
(5 949.44)
(430.45)
(12 732.42)
198 185.40
31/12/2003
139 218.91
25 444.49
8 047.26
(7 436.81)
(1 968.03)
(12 282.38)
151 023.43
11
5
12
17
257
770.87
834.32
048.07
987.80
194.08
The following table shows the development of the Net Financial Debt position:
(In .000 EUR)
Long-term financial debts
Current portion of long-term financial debts
Short-term financial debts
LT portion of subordinated loan from GIMV
Short-term investments
Net Financial Debt
The above table shows that the Kinepolis group once again sharply reduced its net financial debt position (2003: -24%; 2002: 22%), despite borrowings under the new credit facility for the construction of the Granada complex and the increase due to the
full consolidation of the debt in Nîmes (now fully instead of partially consolidated following the increase in the shareholding
percentage).
Financial debt payable after one year breaks down into:
Financial debts (in .000 EUR)
Subordinated loans
Unsubordinated loans
Leasing and similar
Credit institutions
Other loans
Total at end 2003
Total at end 2002
XIII. Statement of debts A. Breakdown by residual term
60
Payable within
one year
Payable after
1 year and
within 5 years
7 436.81
Payable within
5 years
4 646.93
20 797.56
16 525.12
80 487.15
25 444.49
26 669.33
104 449.08
109 328.21
1.72
34 527.04
241.08
34 769.84
51 054.93
Trade debts and remuneration and social security payable are at a comparable level with last year.
Tax liabilities have risen sharply (€ 11.8 million at end-2003 as against € 6.1 million at end-2002). This increase needs,
however, to be viewed in conjunction with the advance tax payments included under other amounts receivable.
Other amounts payable rose from € 2.6 million at the end of 2002 to € 11.2 million at the end of 2003. The main
components (and changes since 2002) in this item are an advance payment of € 3.8 million received from the sale of a
plot of land in the Granada (Spain) project, the € 5.5 million debt to Déficom from the purchase of the remaining shares
in Kinepoleast, the holding company for the Polish complex at Poznan, and the € 1.03 increase in the royalties payable
by Kinepolis Film Distribution.
Debts guaranteed by real guarantees given or irrevocably promised on assets of companies included in the
consolidation
(in .000 EUR)
Financial debts
1 Subordinated loans
2 Unsubordinated bonds
3 Leasing and similar debts
4 Credit institutions
5 Other loans
Trade debts
Other amounts payable
Total
31/12/2003
14 459.77
130 452.63
XIII. Statement of debts B. guarantees
Accrued charges and deferred income rose by € 3.4 million to € 18.0 million. Almost the entire increase relates to
advance payments for screen advertising. This heading also contains the income still be recognized from unredeemed
vouchers. Income from the sales of these vouchers is recognized only when the vouchers are presented at the box
office. Accrued interest charges and other charges make up the remaining balance.
20. Operating income
Turnover
In 2003, Kinepolis recorded turnover of € 191.4 million, down 7.6% on 2002.
This turnover can be broken down as follows:
Turnover (in .000 EUR)
Cinema activities
Mature complexes
Non-mature (new) complexes
Other activities
Total
31/12/2002
202 750.98
159 319.22
43 431.76
4 425.20
207 176.18
31/12/2003
186 868.75
168 238.70
18 630.05
4 576.69
191 445.44
New in 2003: Valencia, Poznan.
New in 2002: Braine-L’Alleud, Nîmes, Valencia, Pioltello, Treviso, Poznan, Schaffhausen
Annual report 2003
61
The presentation of this item has been adjusted slightly since last year in that income generated by the holding
companies, previously shown under ‘other activities’, is now included under ‘cinema activities’.
This overview shows that the number of new complexes has decreased significantly, as these complexes mature or are
sold. Turnover from other activities consists primarily of the turnover of KFD (film distribution), Decatron (technical
services) and KFP (film production).
Turnover at KFD has risen significantly, owing mainly to a small number of Flemish films (Alzheimer, Team Spirit 2). On
the other hand, turnover at Decatron, which last year generated a number of invoices in relation to the Valencia and
Turnhout projects, fell sharply. In the absence of productions, no turnover was recorded in this activity.
The geographical breakdown of the turnover from cinema operations is as follows:
Belgium
France
Spain
Italy
Other
Total
31/12/2002
102 041.41
42 117.59
33 929.99
14 270.12
10 391.87
202 750.98
%
50.33%
20.77%
16.73%
7.04%
5.13%
31/12/2003
98 529.59
42 149.15
33 425.68
3 255.44
9 508.89
%
52.73%
22.56%
17.89%
1.74%
5.09%
186 868.75
The above table should be interpreted in the light of changes in the scope of consolidation and the effects of exchange
rate fluctuations. The 2002 figures include the Pentascoop (Belgium) and Pioltello (Italy) complexes, whilst in 2003 the
Treviso complex was included for five months until its sale in May.
On a like-for-like basis (i.e. excluding the sold entities), turnover from cinema activities decreased by just 2.4% from €
188.1 million to € 183.6 million. Turnover in the other countries (Poland and Switzerland) rose in local currency, but fell
in euros owing the lower parities of the currencies in question.
Total group turnover in Belgium is as follows:
Belgium
31/12/2002
106 466.60
31/12/2003
103 106.28
Statement XIV. A.2. Total group turnover in Belgium
Other operating income
Other operating income consists mainly of income from the renting of concessions, car parks and advertising space.
62
21. Operating charges and operating result
Operating charges (in .000 EUR)
Raw materials, consumables and goods for resale
Services and other goods
Remuneration, social security costs and pensions
Ther operating costs
Sub-total A
Depreciation, amounts written off and provisions
Amortization of consolidation differences
Sub-total B
Total operating charges (A+B)
Operating income C
Operating result EBIT (C – A – B)
EBIT as % of operating income (EBIT margin)
EBITDA (C – A)
EBITDA as % of operating income (EBITDA margin)
31/12/2002
74 096.52
47 372.86
34 755.60
11 939.78
168 164.76
32 112.99
2 473.41
34 586.41
202 751.17
213 474.27
10 723.09
5.02%
45 309.51
21.22%
31/12/2003
70 003.22
43 749.87
32 108.74
9 481.46
155 343.29
25 450.22
2 838.13
28 288.34
183 631.63
198 072.00
14 440.37
7.29%
42 728.71
21.57%
Total operating charges declined in 2003 to € 183.63 million. Most of this fall relates directly to the decrease in
operating income.
Raw materials, consumables, services and other goods and other operating charges
Operating of cinema complexes
The main direct income and charges at any cinema complex are:
Income
Box office (ticket sales)
Food & Beverage Sales
Media sales (screen advertising, events,
partnerships, barter deals...)
Renting of concessions
Direct charges
City taxes, royalties, film rental costs
Food & Beverage Purchases
Directly attributable media sales costs
(catering, etc.)
Commissions, etc.
As well as these specific costs, operating companies have to bear other costs, primarily:
Rental costs: these are limited as most of the land and buildings are company-owned. Rent is paid in Brussels,
Metropolis, Max Linder, Lomme, Valencia and Treviso
Levies and taxes on all sorts of movable and immovable assets
Maintenance and decoration
Electricity, gas and water
•
•
•
•
Annual report 2003
63
Other activities
Other activities generate the following direct income and charges
Income
Film distribution (KFD)
Film production (KFP)
Technical services (Decatron)
Direct charges
P&A (print & advertising) costs, royalties
Direct film production charges
Purchases of materials, project costs
Apart from these direct charges, the indirect charges are largely the same as for cinema activities.
Depreciation, amounts written off and provisions
(in .000 EUR)
Depr. & amounts written off formation expenses & (in)tangible F.A.
Amounts written off stocks, orders in progress and trade debtors
Total
31/12/2002
30 137.71
809.31
1 165.97
32 112.99
31/12/2003
24 754.01
838.10
(141.89)
25 450.22
The reduction in depreciation is due mainly to changes in the scope of consolidation.
Amounts written off stocks, orders in process and trade debtors are at a similar level to the previous year.
The main item in provisions for liabilities and charges is the setting up in 2002 and the reversal in 2003 of a provision
of € 900,000 to cover a contractor's claim in Poland.
Amortization of positive consolidation differences
In accordance with the group’s valuation rules, all expressed positive consolidation differences are amortized over 10
years. The increase compared with 2002 is due primarily to additional amortization of the goodwill arising last year on
the Polish complex.
22. Financial result
(in .000 EUR)
Financial income
Financial charges
A. Debt charges
B. Amortization of positive consolidation differences
C. Amounts written off current assets
D. Other financial charges
Financial result
31/12/2002
5 756.15
350.74
1.484.11
3.921.30
(22 390.75)
15 226.85
31/12/2003
2 634.62
430.79
74.17
2 129.67
(13 451.26)
10 094.21
668.60
6 495.29
(16 634.60)
(195.33)
3 552.37
(10 816.64)
The main components of the financial result are debt charges (interest on outstanding borrowings), translation
differences and the net cost of hedging open positions in foreign currencies, investment grants received (net of latent
(shouldn’t this be: deferred) taxation, the cost of discounting these investment grants to current value, revaluations of
own shares and bank charges.
64
Debt charges fell sharply in 2003, mainly owing to the reduction in debt, but also to lower interest rates and better
conditions obtained owing to the lower debt position.
Results from exchange rate losses and the covering of open positions evolved favourably from € -3.0 million in 2002
to € -1.6 million in 2003. Most of this result was realized during the first quarter of 2003. Until then only around 70%
of the total open position in foreign currencies was hedged. A sharp fall in the Polish zloty and the Swiss franc produced
a significant exchange loss. In March 2003 the decision was taken to almost fully hedge the exchange risk.
In 2003 it was decided to discount the outstanding amount of capital subsidies still to be received from the French CNC
to their net present value. The effective payment of these subsidies is linked to ticket sales. This discounting produced
a charge of € 0.5 million.
23. Extraordinary results
The extraordinary results consist principally of realised capital gains on the sale of the shareholdings in Cinecity Treviso
(Italy) and RMBe (Belgium).
24. Withdrawals from and transfers to deferred taxes and latent taxes
This item consists mainly of changes in deferred taxes produced by the release of capital subsidies pari passu with the
depreciation of the related investments (see also notes 16 and 18). This heading also contains changes in latent tax
liabilities, calculated on differences between the accounting and fiscal depreciation of tangible fixed assets held by
various companies. In 2003 it was decided to reduce existing latent tax liabilities by calculated latent tax assets deriving
from fiscally carryforwardable losses, but only up to the amount of these latent tax liabilities. This change had a positive
impact of € 0.4 million.
25. Taxes
Taxes declined from € 5 573.84 in 2002 to € 4 472.83 in 2003, reflecting mainly lower pre-tax results in Belgium and Spain.
26. Average number of persons employed and personnel charges
Fully consolidated companies
Average number of persons employed
Blue-collar workers
White-collar employees
Manager
Other
Average number of persons (in .000 EUR)
Employed in Belgium by enterprises of the Group
31/12/2002
1 337
861
448
28
31/12/2003
1 312
858
426
28
34 231.65
710
32 108.74
719
Entreprises consolidées par intégration proportionnelle
Blue-collar workers
White-collar employees
Manager
Other
Total
Employed in Belgium
31/12/2002
30
14
16
31/12/2003
523.95
Statement XIV. B Average number of persons employed and personnel costs
Annual report 2003
65
27. Rights and commitments not reflected in the balance sheet
Real guarantees, given or irrevocably promised by companies included in the consolidation on their own assets, as
security for debts and commitments, (in '000 EUR): 306 987.89
Other rights and commitments
• Kinepolis has an obligation to purchase a plot of land at Nancy (France).
• The minority shareholder in Forvm Kinepolis has a call-option on up to 25% of the shares until 4 July 2008 at a price
•
•
•
•
related to EBITDA.
The minority shareholder in Forvm Kinepolis has a put option on its shares, as soon as its shareholding falls under
20%, at a price related to EBITDA.
Kinepolis has a number of outstanding IRS and FRA contracts in a total amount of € 16 268 438 (IRS) and
€ 262 573 221 (FRA), on which fixed interest is paid and floating rate interest received. (pls check sentence)
Kinepolis has hedging contracts outstanding in respect of PLN to cover € -denominated debts contracted in Poland.
Under these contracts PLN are sold against EUR in a total amount of EUR 18,011,389.
Kinepolis has hedging contracts outstanding in respect of CHF to cover €-denominated debts contracted in
Switzerland. Under these contracts CHF are sold against € in a total amount of € 10,262,792.
28. Financial relationships with directors of the consolidating company
(parent company)
(in .000 EUR)
A. Total amount of remuneration granted to directors in respect of their work for the consolidating company,
its subsidiaries and its associated enterprises, including the amounts in respect of retirement pensions
granted to former directors or managers
B. Total amount of advances and loans granted by the consolidating company, by a subsidiary
or by an associated enterprise
XVII. Statement of financial relationships with directors
66
31/12/2003
1 554.72
0
AUDITOR’S
REPORT
Statutory auditor's report on the consolidated accounts of Kinepolis Group nv
submitted to the general shareholders' meeting
Consolidated accounts for the year ended December 31, 2003
In accordance with legal and statutory requirements, we are reporting to you on the completion of the mandate, which
you have entrusted to us.
We have audited the consolidated financial statements for the year ended December 31, 2003 with a balance sheet total
of € 329.210.(000) and a share of the group in the profit for the year of € 2.719.(000). These consolidated financial
statements have been prepared under the responsibility of the Board of Directors of the Company. In addition we have
reviewed the directors’ report.
Unqualified audit opinion on the consolidated financial statements
Our audit was performed in accordance with the standards of the Institut des Reviseurs d'Entreprises-Instituut der
Bedrijfsrevisoren. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free of material misstatement, taking into account the Belgian legal
and regulatory requirements relating to the consolidated financial statements.
In accordance with these standards we have considered the administrative and accounting organisation of the group as
well as the system of internal control. The group’s management have provided us with all explanations and information,
which we required for our audit. We have examined on a test basis, the evidence supporting the amounts included in
the consolidated financial statements. We have assessed the accounting policies used, the basis for consolidation and
the significant accounting estimates made by the Company and the overall presentation of the consolidated financial
statements. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements of Kinepolis Group for the year ended December 31, 2003 present
fairly the financial position of the group and the consolidated results of its operations, in conformity with the prevailing
legal and regulatory requirements, and the disclosures made in the notes to the consolidated financial statements are
adequate.
Additional certification
As required by generally accepted auditing standards the following additional certification is provided. This assertion
does not alter our audit opinion on the consolidated financial statements.
• The consolidated directors’ report contains the information required by law and is in accordance with the consolidated
financial statements.
Antwerp, April 27, 2004
Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren - Reviseurs d'Entreprises
Statutory Auditor
represented by
L. Ruysen
Company Auditor
Annual report 2003
67
Ordinary annual accounts of Kinepolis Group
DISCUSSION
OF THE ORDINARY
ACCOUNTS
1. Comments on the ordinary annual accounts of Kinepolis Group nv
The shareholders’ equity of Kinepolis Group nv amounted at 31 December 2003 to € 104.89 million compared with
€ 55.49 million at the end of 2002. This increase of € 49.4 million is primarily due to the profit for the year.
The balance sheet decreased to € 178 108 622.19 compared with € 213 029 523 at the end of 2002. This decrease is due
to a slightly adjusted presentation of the netting system..
1.1. Ordinary balance sheet: discussion of the most important asset items
1.1.1. Formation expenses
The change in formation expenses is explained by the amortization of costs relating to the stock exchange introductions
(IPO and SPO), mainly the costs of drawing up the prospectus, fees for external advisers, the audiovisual presentation
and the share placement commission. The costs in question are being amortized over five years.
1.1.2 Financial fixed assets
The main changes during the financial year relate to:
• the purchase of the remaining shareholding in Kinepoleast
• the sale of the shareholding in Treviso
• the sale of the shareholding in Kine Invest (to group companies)
• the sale of the shareholding in Kinepolis Espana (to group companies)
• the closing and liquidation of a number of smaller companies.
Together these items have produced a fall of € 10.94 million.
1.1.3. Amounts receivable within one year
The decrease in trade debtors is due mainly to a well-functioning system for netting inter-company receivables and
payables. The rise in other amounts receivable is due to a slightly adjusted presentation of this netting system.
1.1.4. Short-term investments and cash at bank and in hand
Own shares have increased with purchases on various occasions during the year.
Cash at bank and in hand have also increased as a result of the improved result.
Additional improvement of the levelling system has permitted a further optimisation between short-term investments,
cash at bank and in hand and financial debts.
68
1.2. Ordinary balance sheet: discussion of the most important liabilities items
1.2.1. Capital, share premium account and profit carried forward
The profit carried forward and the reserves have risen significantly owing to the better result for the year. The
unavailable reserves have increased with a larger number of own shares.
1.2.2. Amounts payable after one year
The decrease in amounts payable after one year is due to the acceleration of the repayment programme.
1.2.3. Amounts payable within one year
The decrease in financial debts relates to the further optimisation of the levelling system, which has been discussed
earlier.
The increase in other amounts payable can be ascribed primarily to the purchase of the participation in Kinepoleast,
which was paid for only at the start of 2004. The other amounts payable have remained almost unchanged.
1.3. Discussion of the ordinary income statement for the year ended 31 December 2003.
The result for the financial year increased by € 46.4 million from € 3.0 million to € 49.40 million. This figure includes
an extraordinary result of € 33.50 million compared with an extraordinary result of € 8 million in 2002.
The operating result almost doubled from € 1.78 million in 2002 to € 3.62 million in 2003, owing mainly to a decrease
in operating charges.
The financial result, without the previous year's write-down, rose from € - 2.56 million to € 12.27 million, owing mainly
to the receiving of an intra-group dividend.
Annual report 2003
69
ORDINARY BALANCE SHEET OF
KINEPOLIS GROUP
ASSETS (in .000 EUR)
FIXED ASSETS
Formation expenses
2003
70 219.92
126.12
2002
81 366.95
556.46
Intangible fixed assets
402.25
102.13
B. Plant, machinery and equipment
C. Furniture and vehicles
E. Other tangible fixed assets
189.55
150.89
31.87
6.79
265.45
221.70
36.95
6.79
69 501.99
69 452.41
69 452.41
49.58
49.58
80 442.92
80 393.34
80 393.34
49.58
49.58
107 888.70
103 786.85
4 494.73
99 292.12
131 662.57
85 427.30
19 063.49
66 363.81
Short-term investments
A. Own shares
B. Other investments
1 168.03
1 168.03
430.35
430.35
2 508.33
45 396.30
425.79
408.63
178 108.62
213 029.52
A. Associated enterprises
B. Other enterprises linked by participating interests
1. Participating interests, shares and deposit certificates
CURRENT ASSETS
A. Trade debtors
TOTAL ASSETS
70
LIABILITIES (in .000 EUR)
CAPITAL AND RESERVES
Capital
A. Issued capital
A. Legal reserves
B. Reserves not available for distribution
1. In respect of own shares held
D. Reserves available for distribution
Accumulated profits/losses
2003
104 005.80
47 442.92
47 442.92
7 478.46
3 461.63
1 168.12
1 168.12
2 848.72
49 084.41
2002
55 486.41
47 442.92
47 442.92
4 465.97
991.48
625.77
625.77
2 848.72
3 577.52
PROVISIONS FOR LIABILITIES AND CHARGES
A. Provisions for liabilities and charges
1 Pensions and similar obligations
4 Other liabilities and charges
CREDITORS
Amounts payable after one year
A. Financial debts
520.38
520.38
420.38
100.00
73 582.45
33 622.31
33 622.31
7 436.81
26 185.51
52.00
52.00
52.00
157
37
37
5
31
491.12
667.54
667.54
949.44
718.09
Amounts payable within one year
A. Current portion of amounts payable after one year
B. Financial debts
35
6
5
5
117
7
101
101
732.62
041.19
250.29
250.29
C. Trade debts
1. Suppliers
E. Taxes, remuneration and social security
1. Taxes
F. Other amounts payable
4 764.36
4 764.36
295.71
13.40
282.32
19 011.83
4 335.29
4 321.58
4 321..58
1 039.98
454.23
585.75
4 079.57
2 090.96
178 108.62
213 029.52
TOTAL LIABILITIES
Annual report 2003
624.84
532.58
020.36
020.36
71
ORDINARY
INCOME STATEMENT
Description (in .000 EUR)
Operating income
A. Turnover
D. Other operating income
Operating charges
A. Raw materials, consumables and goods for resale
1. Purchases
B. Services and other goods
C. Remuneration, social security costs and pensions
D. Depreciation and amounts written off formation expenses,
E. Amounts written off stocks, contracts in progress and trade debtors
F. Provisions for liabilities and charges
G. Other operating charges
Operating result
Financial income
Financial charges
A. Interest and other debt charges
B. Losses on current assets
C. Other financial charges
Profit / (loss) on ordinary activities before tax
Description ( in .000 EUR)
Extraordinary income
D. Gain on disposal of fixed assets
E. Other extraordinary income
Extraordinary charges
E. Loss on disposal of fixed assets
Result for the period before taxes
Income taxes
A. Taxes
Profit / (loss) for the period
72
2003
19 657.72
17 598.44
2 059.28
(16 037.02)
674.16
674.16
10 063.16
3 918.07
2002
23 834.12
17 398.14
6 435.98
(22 056.05)
151.20
151.20
15 546.62
5 066.87
900.69
1 225.92
468.38
12.56
3 620.70
17 781.58
12 059.01
5 065.66
656.91
(5 508.22)
5 018.18
52.00
13.44
1 778.07
6 635.65
1 598.05
5 016.54
21.06
(13 346.28)
8 279.33
4 150.22
916.72
(4 932.56)
490.03
15 894.05
2003
33 553.64
33 533.41
0.22
(44.76)
44.76
49 402.93
49 402.93
2002
8 000.08
8 000.08
3 067.52
(63.33)
(63.33)
3 004.19
ORDINARY APPROPRIATION OF THE RESULT
Description ( in .000 EUR)
A. PROFIT TO BE APPROPRIATED
Perte à affecter (-)
1. Profit/(loss) for the period available for appropriation
2. Profit/(loss) brought forward from previous year
B. TRANSFERS FROM CAPITAL AND RESERVES
1 From capital and the share premium account
2. From reserves (Gunther: I have corrected what was a major blunder last year)
C. APPROPRIATIONS TO CAPITAL AND RESERVES
Allocation to legal reserves
3. To other reserves
D. RESULT TO BE CARRIED FORWARD
2. Profit / (loss) to be carried forward
F. PROFIT FOR APPROPRIATION
1.Allocation to capital
I. STATEMENT OF FORMATION EXPENSES (in .000 EUR)
Net book value at the end of the preceding period
Movements during the year:
New expenses during the period
- Amortization
Net book value at end of period:
of which: - Restructuring costs
2003
52 980.45
49 402.93
3 577.52
178.35
178.35
(3 190.85)
2 470.15
720.70
2002
(94 219.16)
3 004.19
(97 223.34)
98 959.57
97 223.34
1 736.23
(1 162.90)
150.21
1 012.69
(49 084.41)
(883.54)
(3 577.52)
556.46
1 419.49
132.75
(563.08)
126.12
126.12
49.03
(912.06)
556.46
416.70
323.65
494.79
911.49
93.05
416.70
314.57
233.80
194.67
509.24
402.25
80.77
314.57
102.13
II. STATEMENT OF INTANGIBLE FIXED ASSETS (in .000 EUR)
A. ACQUISITION COST
At the end of the preceding period:
Acquisitions, including fixed assets - own construction
C. AMORTIZATION AND AMOUNTS WRITTEN OFF
recorded
D. NET BOOK VALUE AT END OF THE PERIOD (A) - (C)
Annual report 2003
73
III. STATEMENT OF TANGIBLE FIXED ASSETS (in .000 EUR)
A. PURCHASE COST
Movements during the period
- Acquisitions, including fixed assets - own construction
- Transferts et désaffectations
C. DEPRECIATION AND AMOUNTS WRITTEN OFF
- Recorded
- Written down after sales and disposals
D. NET BOOK VALUE AT THE END OF THE PERIOD (B) - (C)
Plant, machinery
and equipment
Furniture and vehicles
1 012.84
361.27
113.26
(323,78)
802.32
18.55
379.81
791.14
324.32
119.32
(259.02)
651.43
150.89
23.63
347.95
31.87
Other tangible
fixed assets
A. ACQUISITION COST
At the end of the preceding period:
D. NET BOOK VALUE AT THE END OF THE PERIOD (a) - (c)
6.79
6.79
6.79
IV. STATEMENT OF FINANCIAL FIXED ASSETS
1. Participations and shares
A. ACQUISITION COST
Movements during the period
Acquisitions
Sales and disposals
NET BOOK VALUE AT THE END OF THE PERIOD
74
Affiliated enterprises
Companies with
participating interest
80 393.34
49.58
5 634.16
(16 575.08)
69 452.41
69 452.41
49.58
49.58
A. Participating interests and corporate rights in other enterprises
Corporate rights held by
Name and registered office
the company
(directly)
QTY
SA DECATRON
Kampioenschapslaan 1
1020 Brussels, BELGIUM
BE 424.519.114
Ordinary shares
82 467
SA KINEPOLIS MEGA
Eeuwfeestlaan 20
BE 430.277.746
Ordinary shares
20 439
SA KINEPOLIS FILM DISTRIBUTION
Eeuwfeestlaan 20
BE 445.372.530
Ordinary shares
199
SA MAJESTIEK INTERNATIONAL
Val Sainte Croix, 7
L 1371 Luxembourg,
LUXEMBURG
Ordinary shares
449
SA EUROPEAN MEGA CINEMA
Val Sainte Croix, 7
L 1371 Luxembourg
LUXEMBURG
Ordinary shares
16 999
SPRL KINEPOLIS FILM PRODUC.
Eeuwfeestlaan 20
BE 459.997.061
Shares without nominal value
749
SA C.C.I.&H.
Sint-Truidersteenweg 26
3540 Herk-de-Stad, BELGIUM
BE 455.740.543
Ordinary shares
248
%
subsidiaries
Data obtained from last
available financial statement
Financial Currency Capital and
statement as at
reserves
%
Net
result
(+) of (-)
99.99
0.01
31/12/2002
EUR
3 763 847
(165 346)
99.99
0.01
31/12/2002
EUR 11 250 069
3 825 839
99.50
0.50
31/12/2002
EUR
54 395
(302 118)
99.78
0.22
31/12/2002
EUR
2 083 749
(252 168)
99.99
0.01
31/12/2002
EUR
3 752 411
182 046
99.87
0.13
31/12/2002
EUR
(892 232)
(551 240)
99.20
0.80
31/12/2002
EUR
851 790
(3 449)
Annual report 2003
75
SA C.C.E. LIEGE
Universiteitslaan 11
3500 Hasselt, BELGIUM
BE 459.469.796
Ordinary shares
SA IMMO ROC
Sint-Truidersteenweg 26
3540 Herk-de-Stad, BELGIUM
BE 459.466.234
Ordinary shares
KINEPOLIS MULTI SA
President Kennedylaan 100b
8500 Kortrijk, BELGIUM
BE 434.861.589
Ordinary shares
SA BRUVISION
Kampioenschapslaan 1
BE 418.314.676
Ordinary shares
BV KINEPOLEAST
Burgemeester Rijnderslaan 10
1185 Amstelveen, NL
Ordinary shares
15
SA IMAGIBRAINE
Boulevard de France
1420 Braine l’Alleud, BELGIUM
BE 462.688.911
Ordinary shares
EUROCASINO SA
Jean Dubrucqlaan 160
BE 467.730.238
Ordinary shares
SA Megatix
Eeuwfeestlaan 20
BE 462 123 341
Ordinary shares
76
the company
(directly)
subsidiaries
statement as at
reserves
%
Net
result
QTY
%
13 471
99.95
0.05
31/12/2002
EUR
4 223 703
(100 245)
998
99.80
0.20
31/12/2002
EUR
368 768
46 999
78 803
99.89
0.01
31/12/2002
EUR 24 080 797
4 476 278
2
0.05
99.95
31/12/2002
EUR
(339 018)
(297 425)
134 850
86.63
13.37
31/12/2002
EUR 15 852 903
(735 379)
99 999
99.99
0.01
31/12/2002
EUR
963 054
(214 700)
1 900
19.00
31/12/2002
EUR
39 492
11 597
499
99.80
31/12/2002
EUR
935 707
693 101
0.20
(+) of (-)
KINEPOLIS Nacka
Västra. Hamngatan 24
41117 Göteborg
SWEDEN
Ordinary shares
SA KINEPOLIS ESPANA
Calle Edgar neville
Pozuelo de Alarcon
28223 Madrid, SPAIN
Ordinary shares
SA KINEPOLIS HOLDING
PB 325 10
4330 AH Middelburg
THE NETHERLAND
CinemaxX AG (Consolidé)
Mittelweg 176
20148 Hamburg, GERMANY
Ordinary shares
the company
(directly)
subsidiaries
statement as at
reserves
%
Net
result
QTY
%
(+) of (-)
1 000
99.99
0.01
31/12/2002
SEK
748 119
648 119
95
0.46
99.64
31/12/2002
EUR
9 246 181
639 267
4
100
31/12/2002
EUR (1 348 944)
(73 480)
3 000 000
25
31/12/2002
EUR
(7 970 857) (25 104 543)
VII. Deferred charges and accrued income (in .000 EUR)
Interest receivable
Costs of partnerships to be carried forward
Cost to be carried forward
2003
207.76
180.61
37.12
VIII. Statement of capital (in .000 EUR)
Capital
A. share capital
1. Issued capital
At end of the preceding period
2. Structure of the capital
2.1 Types of shares
Ordinary shares without indication of nominal value
2.2 Registered or bearer shares
Registered shares
Bearer shares
Number of shares
47 442.92
47 442.92
C. Own shares held by:
- the company
D. Commitments to issue shares
* Incorp. premiums
Annual report 2003
47 442.92
6 930 778
Capital
5 172 550
1 758 220
Number of shares
1 168.03
134 289
77
2. following the exercise of subscription rights
- Outstanding subscription rights
- Amount of capital to be issued
- Maximum number of shares to be issued
248 250
2 996.73
294 250
Capital Number of shares
45 428.70
E. Authorised capital not issued
G. Shareholder structure of the company at balance sheet date,
as evidenced by the declarations received by the company hareholder
Shareholder
Number of shares
Kinohold bis and CCM&H
4 419 313
GIMV nv *
686 860
Kinepolis Group
134 289
Public
1 690 316
Total
6 930 778
%
63.76%
9.91%
1.94 %
24.39%
100%
IX. provisions for liabilities and charges (in .000 EUR)
2003
Breakdown of item 163/5 where this contains a significant amount
- Provision for charges relating to foreign participations
100.00
X. Statement of amounts payable (in .000 EUR)
A. Breakdown of amounts originally payable after more than one year, by residual term
debts with a residual term of
Maximum
More than one year
More than
one year
but maximum
five years
five years
Financial debts
6 532.58
28 793.72
4 828.59
7 436.81
6 532.58
21 356.91
4 828.59
Total
6 532.58
28 793.72
4 828.59
DEBTS GARANTEED BY
B. Garanteed debts
Financial debts
Real guarantees, given or irrevocably
promised on the assets of the enterprises
32 718.09
C. Liabilities concerning: taxes, remuneration and social security
1. Taxes
b) Non-lapsed tax liabilities
b) Other payroll and social security liabilities
XI. Accrued charges and deferred income (in .000 EUR)
Income from screen publicity to be carried forward
Provisions for interest payments
Provisions for consultants’ fees
Other
78
* On 19.03.2004, GIMV sold its entire shareholding in Group Kinepolis SA.
The above-mentioned contractual provisions therefore no longer apply.
2003
13.40
282.32
2003
3 500.00
600.82
140.00
94.47
XII. Operating results
C1. Employees entered on the personnel register
a) Total number at balance sheet date
b) Average workforce in full-time equivalents
c) No. of hours actually worked
2003
2002
38
53.2
90 076
71
69.6
118 688
C2. Personnel costs (in .000 EUR)
a) Remuneration and direct social benefits
b) Employer's contribution for social security
c) Employer's premium for extra statutory insurance
d) Other personnel charges
2 732.92
882.54
108.89
193.73
3 571.92
1 028.31
127.59
339.06
C3. Provisions for pensions (in .000 EUR)
Increase, pension payments, write-backs
E.
F.
52.00
Other liabilities and charges (in .000 EUR)
Increase
Other operating charges (in .000 EUR)
Taxes and duties on the conduct of the business
Other
G. Temporary staff and persons placed at the company's disposal
1. Total number at balance sheet date
2. Average number in full-time equivalents
No. of hours actually worked
Expenses borne by the company
XIII. Financial results (in .000 EUR)
A. Other financial income
Positive exchange differences
Other financial income
468.38
52.00
0.65
11.91
5.33
8.11
1
0.5
886
51.34
1.6
3 152
181.85
2003
2002
28.10
13.77
6.37
14.68
D. Depreciation and amounts written down on intangible assets
Recorded
E.
Bank charges
Negative exchange differences
4 150.22
93.64
317.33
10.00
163.65
36.55
716.53
XV.
Income taxes (in .000 EUR)
2003
B. Main sources of differences between profit before taxes and the estimated taxable profit
- Losses carried forward
5 000.90
- Capital gains and liquidation surpluses
33 852.69
Annual report 2003
79
XVI. Other taxes and taxes supported by third parties (in .000 EUR)
A. Value added taxes charged:
1. To the company (deductible)
2. By the company
B. Amounts retained on behalf of third parties for:
1. Payroll withholding taxes
2003
2002
3 249.80
4 656.75
2 905.99
3 998.31
891.40
1 278.57
XVII. Off-balance sheet rights and commitments (in .000 EUR)
Real guarantees given or irrevocably promised by the company on its own assets
Pledge of other assets
Book value of pledged assets
Where applicable, a brief description of the rules concerning supplementary retirement or
survivor’s pension for employees or managers, mentioning the measures taken to cover the ensuing costs.
Current IRS contracts in an amount of € 16 271.44 and
the FRA contracts in an amount of € 167 721.47
2003
39 846.93
XVIII. Relationships with associated undertakings and undertakings in which the company had a
participating interest (in .000 EUR)
associated
enterprises
enterprises
in which the company has a
participating interest
2003
2002
2003
2002
1. Financial fixed assets
69 452.41
80 393.34
49.58
49.58
- Participating interests
69 452.41
80 393.34
49.58
49.58
- Amounts receivable
2. Amounts receivable
100 262.18
81 524.11
- For a term not exceeding 1 year
100 262.18
81 524.11
4. Amounts payable
11 668.36
4 818.83
- For a term not exceeding 1 year
11 668.36
4 818.83
associated enterprises
2003
2002
7. Financial results
- Income from financial fixed assets
12 059.01
1 598.05
- Income from current assets
5 065.66
5 016.54
- Other financial income
41.87
21.06
- Interest and other debt charges
5 018.18
8 279.33
- Other financial charges
420.98
916.72
8. Disposal of fixed assets
- Gains on disposals
33 525.67
- Losses on disposals
XIX. Financial relationships with
A. Directors and general managers
4. Direct and indirect remuneration and and pensions charged against the income
statement, as long as this disclosure does not concern exclusively or mainly the situation
of a single identifiable person:
- to directors and general managers:
I. Statement of persons employed
80
8 000.08
2003
829.03
SOCIAL
BALANCE SHEET
A. Employees entered on the register of personnel
1. During the year and in the previous year
1. Full-time
2. Part-time
2003
0.5
886
51.24
2003
2.7
5 658
282.10
2003
53.2
90 076
3 918.07
52.96
2002
69.6
118 688
5 066.87
69.95
1. Full-time
2. part-time
3. Total in
full-time
equivalents
34
4
36.3
34
4
36.3
17
17
1
3
17.8
18.5
34
4
36.3
Average number of employees
Personnel costs (in .000 EUR)
Benefits in addition to wages
3. Total (T) in 4. Total (T) in
full-time
full-time
equivalents
equivalents
(ETP)
(ETP)
2. On balance sheet date
a. No. of employees entered on the register of
personnel
b. By type of employment contract
Permanent contract
c. By gender
Men
Women
d. By occupational category White-collared workers
Employees
B. Agency staff and persons made available to the company
Costs to the company (in .000 EUR)
II. Schedule of personnel movements during the year
A. Entering service
a. No. of employees added to the register of
personnel during the year
Permanent contract
Fixed-term contract
c. By gender and educational level
Men:
Secondary education
Women:
Secondary education
2003
0.5
886
51.24
23
2
23.7
10
13
2
10.7
13.0
11
12
Annual report 2003
11.0
2
12.7
81
B. Left service
a. No. of employees with a date entered in the register of
personnel on which their contract was
terminated during the year
Permanent contract
Fixed-term contract
c. By gender and educational level
Men:
Secondary education
Women:
Secondary education
d. By reason for terminating the contract
Dismissal
Other reason
1. Full- time
2. Part- time
3. Total in
full- time
equivalents
59
2
60.6
46
13
2
47.6
13.0
26
26.0
33
2
34.6
6
53
1
1
6.8
53.8
III. Statement on the use of measures to promote employment during the financial year
Measures to promote employment
1. Number
Measures (in .000 EUR)
1.6. Structural reduction in
social security contributions
Other measures
2.4 Reduction of personal social security
contributions for low-paid workers
Number of employees affected by one or more
measures to promote employment
Total for financial year
Total for previous financial year
82
Number of employees concerned
2. In full-time
3. Financial
equivalents
advantage
78
76.0
1
1.0
79
84
77.0
82.2
69.50
VALUATION
RULES
1. Principle
The valuation rules are determined in accordance with the provisions of Chapter II of the Royal Decree of 30 January
2001 and the former Royal Decree of 8 October 1976 concerning company financial statements.
2. Special Rules
Formation expenses
Formation expenses and the cost of capital increases are valued at cost and depreciated on a straight-line basis over a
period of five years. Loan expenses, if any, can be capitalized and written off annually in relation to the period of the
loan.
Intangible fixed assets
Intangible fixed assets are shown on the balance sheet at cost. Annual depreciation is applied by the straight-line
method at 20% per year.
Acquisitions of tangible fixed assets are valued at cost plus additional expenses such as non- deductible VAT.
Depreciation is applied on the basis of the anticipated useful life of the assets concerned.
DEPRECIATION RECORDED DURING THE YEAR
Assets
1. Industrial, administrative
or commercial buildings
2. Plant, machinery and equipment (on lease)
3. Vehicles
4. Office equipment and furniture
method
L (straight)
line
Basis
NR (non
revalued)
L
L
L
L
L
L
L
L
depreciation percentage
Capital
Sum min-max
Additional
cost
NG
5% - 20%
5% - 20%
NG
NG
NG
NG
NG
NG
NG
10% - 10 %
20% - 20 %
25% - 25 %
50% - 50 %
33% - 33 %
20% - 20%
20% - 33%
20% - 20%
Accelerated or reducing-balance depreciation is applied with due regard to tax provisions. Expenditure on conversions,
major renewals and improvements is capitalized. Expenditure on repairs, maintenance and replacements that do not
significantly extend the economic useful life of the assets concerned is entered as expenses.
Annual report 2003
83
Participating interests and shares are valued at cost. Additional expenses relating to their acquisition are not capitalized
but transferred to the ‘Other financial expenses’ item for the year in which they are incurred. Adjustments are made if
the estimated value of participating interests or shares is lower than their book value and if the reduced value thus
ascertained appears permanent. The estimated value of each participating interest or share is fixed at the end of each
financial year according to one or more criteria. In general the value of the last published balance sheet is taken into
account, unless more significant data is available.
Stocks
Goods for resale are valued at cost calculated by the FIFO method or at market value on the balance sheet date if lower.
Debtors are shown on the balance sheet at nominal value. Fixed-income securities are valued at cost. Adjustments are
made if there is uncertainty regarding all or part of the receivable as to payment of the claim on the due date or if the
market value on the balance sheet date is lower than the nominal or book value.
Short-term investments and cash at bank an in hand
Fixed-income securities and shares are valued at the lower of purchase price or market value.
Deferrals and accruals
Deferrals and accruals are recorded and valued at cost and shown on the balance sheet in the section relating to the
next financial year (costs) or are allocated to the present year (income).
Provisions for liabilities and charges are made to meet the requirements of caution, integrity and good faith. The
amount of the provisions is decided by the company’s governing body on the basis of a cautious estimate.
Foreign currency
Credit balances, debts and obligations in foreign currency are converted at a fixed exchange rate, which is adjusted
monthly. Translation gains or losses therefore occur when these are settled.
In addition, credit balances and debts in foreign currency on the balance sheet are converted at the closing rate on the
balance sheet date.
The results of this conversion are recorded:
- if the result is a profit: under "accruals and deferred income" in liabilities
- if the result is a loss: under "other financial expenses" in the income statement.
84
TRANSITION
TO
IAS / IFRS
Kinepolis Group has already devoted much time in recent months to the conversion to IAS / IFRS. A project group has
been set up, consisting of the IFRS project leader, the CFO, the National and International Controller and a
representative of the statutory auditor.
This project group met regularly to examine the impact of the IAS standards that could affect the Kinepolis Group.
The entire IAS conversion is being implemented in a number of project phases, that can be summarised as follows:
• June – December 2002: Initial IAS training for all bookkeeping staff and other persons concerned. Definition, in
consultation with the statutory auditor, of the main IAS standards that will affect the enterprise.
• Jan – Sept 2003: Closer examination, based on the data at 31 December 2002, of the items influenced by IAS.
• Oct – Dec 2003: Preparation of the IAS valuation rules, development of a new reporting package, and preparations
for IAS training tailored to the Kinepolis Group.
• Jan – March 2004: IAS training given during the first quarter of 2004 to all bookkeeping staff. Opening balance at 1
January 2004 reported by all group companies.
• Apr – July 2004: The provisional final phase consists of controlling and consolidating the opening balance at 1
January 2004 and finalizing the valuation rules.
The main differences expected between the currently applied financial statement standards and the future IAS/IFRS
standards relate to the classification of investment grants and the calculation of latent taxes.
Annual report 2003
85
NOTES
86
Annual report 2003
87
NOTES
88
All relationships = 100 %, exc. Nîmes (Forvm Kinepolis)
Kinepoleast BV = 100 % from 02/2004
Kinepolis España SA holds 13.37 % of Kinepoleast BV.
Kinepolis Group NV
Kinepolis
Multi NV
Kinepolis
Mega NV
50%
F.M.C. SA
Kinepolis Metz
SA
F.M.C.I. SA
Kin.Le Château
du Cinéma SA
Kinepolis
Mulhouse SA
Kinepolis
Thionville SA
Kinepolis Immo
Thionville SA
Forum Kinepolis
SA
Kinepolis Nancy
SAS
Eden Panorama
SA
Bruvision NV
50%
Kinepolis
Invest SA
Immo Roc NV
Decatron NV
Kinepolis
España SA
CCE Liège NV
K.F.P. NV
Imagibraine SA
K.F.D. NV
CCi&H NV
Megatix NV
E.M.C. NV
Kinepolis
Nacka
100%
Kinepolis
Madrid SA
Kinepolis
Paterna SA
Kinepolis Holding BV
100%
Eurocasino NV
Kinepolis
Granada SA
I.O.B. NV
Kinepoleast BV
100%
Majestiek Int. SA
100%
Kinepolis Spzoo
Kinepolis Poznan
Kinepolis Schweiz
Kinepolis
Prospection SAS
CONTACT
Dit jaarverslag is eveneens beschikbaar in het Nederlands.
Ce rapport annuel est également disponible en version
française.
Kinepolis Group nv
Tine Duyck
Eeuwfeestlaan 20 - B-1020 Brussels
[email protected]
www.kinepolis.com
KINEPOLIS GROUP NV
Eeuwfeestlaan 20 - B-1020 Brussels
Tel : +32 (0)2 474 26 00 - Fax : 32 (0)2 474 26 06
www.kinepolis.com

annual accounts of kinepolis group

Transcription

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