ANNUAL REPORT THE BRAGANZA GROUP 2018 BRAGANZA GROUP 2018 DIRECTORS’ REPORT BRAGANZA GROUP 3 FINANCIAL STATEMENTS Profit and loss – Group 10 Balance sheet – Group 11 Cash flow – Group 13 Equity – Group 14 NOTES - GROUP Note 1 About the Braganza Group 15 Note 2 Accounting principles 16 Note 3 Other operating income and expenses 22 Note 4 Salary and personnel costs, number of employees, loans to employees and auditor’s fee 23 Note 5 Pensions 24 Note 6 Intangible assets 25 Note 7 Tangible assets 26 Note 8 Significant transactions and events 27 Note 9 Investments in associated companies 28 Note 10 Other financial income and expenses 29 Note 11 Taxes 30 Note 12 Leases 31 Note 13 Long term investments 31 Note 14 Long term receivables 32 Note 15 Transactions with related parties 32 Note 16 Prepayments and accrued income 32 Note 17 Cash and equivalents 32 Note 18 Share capital 33 Note 19 Interest bearing debt 33 Note 20 Other long term liabilities and accrued expenses and deferred income 34 Note 21 Guarantee liabilities and pledged assets 34 Note 22 Acquisitions and disposals of businesses 35 Note 23 Operating segments 36 Note 24 Subsidiaries 37 Note 25 Events after the reporting period 38 PARENT COMPANY BRAGANZA AB Annual Report – Parent Company 39 Profit and loss – Parent Company 40 Balance sheet – Parent Company 41 Equity – Parent Company 43 Cashflow – Parent Company 44 NOTES – PARENT COMPANY Note 1 Disclosure of audit fee and cost reimbursements 45 Note 2 Personell 45 Note 3 Shares in group companies 46 Note 4 Other long-term secutities 47 Note 5 Other interest income and similar items 47 Note 6 Interest expense and similar items 47 Note 7 Untaxed reserves 48 Note 8 Tax 48 Note 9 Shares in associated companies 48 Note 10 Intangible assets 49 Note 11 Proposal for the appropriations of profits 49 Note 12 Pledged assets and contingent liabilities 49 Note 13 Subsequent events 50 Auditor’s report 51 BRAGANZA AB │ DIRECTORS’ REPORT BRAGANZA AB The board and the managing director of Braganza AB hereby submit the annual report and consolidated group accounts for the financial year 2018. Braganza AB is a private investment company owned by Per G. Braathen and his children. Braganza has its office in Stockholm. The Group consists primarily of direct investments within the aviation industry and travel related industries, managed through active ownership. A minor part of the Group assets are classified as financial investments. Braganza as a group has a long history (1938) and was an active owner of the Norwegian airline company Braathens (SAFE) for more than 50 years, before SAS acquired Braathens in 2001. The current activities of Braganza began with a demerger in 2002 when the equity base was some MSEK 600 equivalent. During the following years the Group has increased the equity base to approximately 1,7 billion SEK, focusing on indus- trial investments in the form of wholly- or majority owned subsidiaries, developed through active and long- term ownership. Having been a Norwegian based company since 1938, Braganza became a Swedish holding company through a cross border merger in 2013. 3 BRAGANZA AB │ DIRECTORS’ REPORT THE GROUP By year-end 2018 the Group consists of the holding com- Aviation AB), Dyreparken Utvikling AS, Ticket Leisure Travel panies Braganza AB and Braganza II AB which in turn own AB and Escape Travel Group AS. All group companies are the main operating holding companies BRA (Braathens listed in note 24 to the Financial Statements. FINANCIAL OVERVIEW OF THE MAIN OPERATING COMPANIES 2018 (2017) TURNOVER 2 743 MSEK (2 699 MSEK) BRA EBITDA - 11 MSEK (155 MSEK) FTE 873 (842) TURNOVER 6 500 MSEK (6 932 MSEK) TICKET EBITDA 54 MSEK (93 MSEK) FTE 355 (353) TURNOVER 468 MSEK (445 MSEK) DYREPARKEN EBITDA 66 MSEK (92 MSEK) FTE 312 (309) TURNOVER 664 MSEK (481 MSEK) ESCAPE TRAVEL GROUP EBITDA 18 MSEK (13 MSEK) FTE 85 (64) BRA (Braathens Aviation AB) is the holding company for Bromma as a hub, passengers enjoy a broad domestic net- the airline operations. A series of external events had a sig- work, coordinated timetables allowing for efficient transfers nificant negative impact on the 2018 financials. Currency and frequent flights. losses, increased fuel cost, introduction of an aviation tax and increased cost of emission rights, have all contributed Ticket includes Ticket Privatresor AB and Ticket Feriereiser to a loss making 2018. In a falling domestic market, BRA has AS. Ticket is the largest travel agency chain in Sweden maintained its overall market share and increased average and Norway focusing on the leisure market. The head revenue per passenger. Capacity has increased with 2,3 % office is in Stockholm. The company sells leisure travel servic- compared to 2017, however, number of passengers have es from leading tour operators, cruise companies, airlines dropped 2,6% in the same period. The weak domestic mar- and hotels. Sales are carried out through some 70 Ticket ket is a result of multiple factors. Introduction of the avia- shops, by phone, and online through ticket.se and ticket. tion tax has had a negative effect on the market, especially no. More than half the sales are now online, and this chan- in the most price sensitive segments. The SEK has been nel is growing. Ticket has an online presence in Denmark weak against USD, EUR and GBP during 2018, partly due and Finland through ticket.dk and ticket.fi. In Germany and to negative central bank interest, and partly due to politi- Austria Ticket is selling online through airngo.de. Airngo is cal uncertainty following the national election in Sweden also present in Sweden, Norway, Denmark and Finland as in September 2018. Negative currency effects stem from an online only offer. The summer of 2018 was the warmest revenue in SEK and costs nominated in USD, EUR and GBP. on record in all of Scandinavia, and for the first time since A severe winter in Scandinavia lead to operational issues 2008 Ticket saw decreasing sales and a fall in profitability. in the first quarter. Regularity and production have devel- oped as planned for the remainder of the year. A cost-cut- Dyreparken Utvikling AS is the holding company for ting program was introduced in 2018, which is expected to Dyreparken located in Kristiansand. Over many years, have a positive effect in the years to come. No decision Dyreparken has maintained its position as the largest and has been taken on the jet fleet replacement for BRA. BRA most visited family attraction in Norway. With its combina- has its office in Stockholm and is today the second largest tion of zoo and amusement park, water park, evening shows operator in the Swedish domestic market. Using Stockholm and themed accommodation, Dyreparken has become a 4 BRAGANZA AB │ DIRECTORS’ REPORT full-scale destination with around one million visitors each market leader in Norway in the niche for individual holiday- year. With a strong focus on innovation and unique themes, makers who want to travel as a group. Escape offers quality based on Norway´s best known children stories, Dyreparken tours and cruises throughout the world based on sched- appeals to people of all ages. Dyreparken plays an impor- uled flights. The company has a strong product range, tant role for animal protection and conservancy worldwide, both for group and individual holidays, backed by travel working closely with WAZA (World Association of Zoos and experts at our locations. In January 2018, Escape Travel AS Aquariums) and EAZA (European Association of Zoos and acquired 100 % of Cruise.no, the leading distributor of cruis- Aquaria), to help save animals under threat of extinction. es in the Norwegian market. The Danish Escape Travel A/S Focus on excellent operations and customer experienc- acquired 100% of Signatours Travel Holding A/S in June es lead to a minor reorganization of Dyreparken in 2018. 2018. Signatours products trades online with the brands Two property companies were sold to a Braganza subsid- in-italia.dk/se/no/de and hideaways.dk/se. Hideaways.no iary, with long term leases back to Dyreparken. 2018 was will be launched early 2019. In December 2018, Signatours a good year for Dyreparken with satisfied guests and the acquired 100% of the Siglinde Fischer – a brand with 33 third highest ever profit. years of operation in the German market. The tour operation in Braganza is organized through Escape enjoyed a strong winter, spring and fall operation Escape Travel Group AS, which runs operations in Norway, in 2018, with satisfying financial results. In-Italia, Hideaways Sweden, and Denmark. Escape Travel is the fourth largest and Siglinde Fischer all had a more challenging year with tour operator in the Norwegian market after Ving, TUI and their bulk of departure in the warmer than normal summer Apollo. Carpe Diem, a brand under Escape Travel AS, is season. ALLOCATION OF REVENUE BY OPERATING SEGMENTS NET REVENUES - OPERATING SEGMENTS GROSS REVENUES - OPERATING SEGMENTS 27 2 770 1 184 Aviation Aviation Leisure Leisure Travel Travel Other Other 467 468 2 788 7 183 5 BRAGANZA AB │ DIRECTORS’ REPORT GOING CONCERN dollars against the Swedish krona. Debt related to finance In accordance with the Swedish Accounting Act, the board leases of six ATR 72-600 aircraft is secured long term with of directors confirms that the financial statement has been support of the Italian and French export finance institutions. prepared under the assumption of a going concern. Loans are denominated in EUR, which historically corre- lates with SEK, and all EUR loans at year-end are at fixed Further information about the Group is available on the interest rates.