Annual Report 2018 Annual Report 2018

ANNUAL REPORT 2018

CONTENTS

INTRODUCTION

46 2018 HIGHLIGHTS / VENLO 2

47 Our people

3

45
Message from the CEO 2018 in ﬁgures Key ﬁgures

52 2018 HIGHLIGHTS / GRONINGEN

54 Our society 57 Holland Casino management team 58 In control statement

80

ABOUT HOLLAND CASINO

FINANCIAL STATEMENTS

789
Company proﬁle Mission & strategy Strategic pillars

GOVERNANCE

60 Composition Supervisory Board 62 Foreword by the chairman of the
Supervisory Board
10 Value creation model

REPORT OF THE

EXECUTIVE BOARD

64 Supervisory Board report

REPORT OF THE EXECUTIVE BOARD 66 Corporate governance

12 Foreword Executive Board 15 Financial developments

18 2018 HIGHLIGHTS / EXPERIENCE ZONE

20 Our environment
70 Risk management

FINANCIAL STATEMENTS

80 Financial statements 2018 133 Other information

6

23 Stakeholder overview 26 SWOT analysis

ABOUT HOLLAND CASINO

27 Materiality matrix 28 Relationship material aspects & strategic pillars

29 2018 HIGHLIGHTS / AMSTERDAM-WEST

31 Operational developments

36 2018 HIGHLIGHTS /

ADDITIONAL INFORMATION

142 Locations

GOVERNANCE

143 Five-year summary 144 About this report 145 List of abbreviations 146 Colophon

ELFSTEDENZWEMTOCHT

38 Developments at casinos 39 Outlook

59

40 Our guests

11

2

BUILDING ON A STRONG FOUNDATION

We are pleased to present Holland Casino’s annual report for 2018. It was a special year for a special Company. It was a successful year, too, as after a number of turbulent years we found the calm and the focus again to devote our full attention to working on our strategy HC 2020.

midst of these dynamic developments is an enormous tribute to our employees.

Holland Casino takes its responsibility to its guests and employees very seriously and continues to work – together with its partners – on a safe and pleasant gaming environment, fulﬁlling our social task as might be expected.
We invested in new casinos, in our guest experience and in the

development of our staff. We managed to stabilise our market

Holland Casino operates at the heart of society and welcomes

share in the competitive leisure and entertainment market and visitors from all walks of life. We gladly contribute to a healthy made major progress in the renewal of our range of games. We can see the effects of these efforts in our ﬁnancial results, which were both positive and robust with higher gross revenues than in 2017. The fact that the result before corporate income tax did not increase in line with gross revenues was primarily due to a later insurance payment related to ‘Groningen’ and the increase in the gaming tax rate. society through a range of partnerships and contributions to good causes. The most prominent of these in 2018 was our support as founding father for Maarten van der Weijden’s Elfstedenzwemtocht, which will be continued in 2019, and our employees’ sponsorship campaigns in support of the Dutch Cancer Society (KWF).

‘With the new locations, our casino family is complete again.’

The opportunities and challenges that lie ahead for Holland Casino are numerous. We continue to keep a very close eye on our environment, where the stakes are high and political decisions on privatisation remain uncertain for the time being. We will continue to focus fully on the realisation of our strategic objectives. This strategy will help us build a strong and future-proof company, with compelling concepts for new and existing guests and promising propositions. We also want to remain an attractive employer for our talented colleagues.
Following the opening of our new casino in Amsterdam West-Sloterdijk and the opening of the temporary pop-up casino in Groningen, our family of 14 casinos is once again complete. And with the drastic renovation of Holland Casino Valkenburg, and the ground-breaking ceremony for our new casino in Venlo, we continue to develop the most modern and sustainable casinos across the Netherlands.

We also had a dynamic year, as we continued to build on our online platform and on the multidisciplinary teams that are working on our strategic priorities. So rather than waiting for things to happen, we have taken matters into our own hands to ensure that we are prepared for new gaming legislation. The fact that we did not lose sight of our daily guests in the
In 2019, we will continue to build on the strong foundations we laid in 2018 with conviction. We are looking to the future of Holland Casino with great conﬁdence.

Erwin van Lambaart – CEO Holland Casino

3

2018 IN FIGURES

COMPARED TO 2017

ꢃ 656ꢀ5 MLN

29

ꢃ 114

Total revenue

NET Promotor Score

30

Average spending per visit

2ꢀ7

4ꢀ6

ꢃ 82ꢀ7 MLN

ꢃ 265ꢀ8 MLN

ꢃ ꢂ40ꢀ0 MLN

Result before corporate income tax

Revenue table games

Revenue slot machines

*

15ꢀ6

3ꢀ9

2ꢀ3

1ꢀ1 MLN

5ꢀ7 MLN

5ꢀ2 ꢄ

Guests

Visits

Visit frequency

1,ꢀ2

1ꢀ7

5ꢀ2

2,920 FTE

4ꢀ9 ꢁ

2ꢂ,950

Employees

Absenteeism

Monitoring (PAK) interviews

21,324

77,,ꢀ559

3ꢀ7

49ꢂ,05ꢂ

2,7ꢂꢂ,199 848,460

5,576,221

Cups of coffee

Table settings

Glasses of draught beer

Bitterballen

4

*

See Financial developments, p. 15

KEY FIGURES

CONSOLIDATED INCOME STATEMENT

Amounts in millions of euro, unless stated otherwise

Revenue before gaming tax Gaming tax

STATEMENT OF FINANCIAL POSITION

2018

2017

2018

222.8
17.2

2017

211.3
17.3
656.5 -182.4
639.2 -170.5
Equity Non-current liabilities

Current liabilities

Net revenue

474.1

468.7

102.4

102.3

Insurance claim

11.4

29.0

Total revenue

485.5

-403.3

82.2

0.4
497.7
-400.2

97.5

-

OTHER KEY FIGURES

2018

448

2017

417
Operating expenses
Number of gaming tables

Operating result

Number of slot machines (in casinos)

6,490

5,701

Financial income and expenses

Share of proﬁt of equity-accounted investees, net of tax

Result before corporate income tax

Corporate income tax

0.1

0.5

Visits
82.7

-23.2

59.5

-

98.0

-24.5

73.5

-
Number of visits (in thousands) Spending per visit (in euro)
5,743
114
5,840
109

Result after corporate income tax

Other comprehensive income net of tax

Total comprehensive income
Employees at year-end

59.5

73.5

Number of employees (excluding stand-by employees and trainees) of whom Gaming & Casino Services
3,949
50
3,699
0

Cash ﬂow from operating activities

133.4

12.6
83.5 15.7
Full-time equivalents (fte) of whom Gaming & Casino Services
2,920
49
2,708
0

Proﬁtmargin (in %)

(Result after tax / net revenue) x 100
Employee beneﬁts (as a percentage of operating expenses)

59.9

56.4

Net revenue per average fte (in thousands of euro)

166

179

The key ﬁgures are not part of Holland Casino’s ﬁnancial statements.

5

ABOUT HOLLAND CASINO

6

PROFILE OF THE COMPANY

The Dutch government awarded Holland Casino an exclusive licence to provide tables games in 1975 in an effort to provide the Netherlands with a safe and regulated gaming environment. We opened our ﬁrst casino in 1976. From 1986, our licence was extended to include slot machines. We offer our guests exciting, surprising and reliable games in a familiar and exceedingly hospitable environment. These same principles will remain in place once Holland Casino is allowed to provide online games, which we expect to be in effect from 2020.

SUPERVISORY BOARD

AUDIT

EXECUTIVE BOARD

ꢌOꢃꢊS COUNCIL

Following the opening of Amsterdam WestSloterdijk and the re-opening in Groningen, we once again have all 14 casinos in operation. Spread right across the country and with the exclusive right to provide table games. in the future. Holland Casino provides three product groups: table games, supervised by specially trained and qualiﬁed croupiers, a wide range of slot machines, including video, roulette, bingo and poker machines, and Food & Beverage (F&B). The core activities Table games and Slot machines account for the bulk of our revenue. F&B is becoming an increasingly important part of our core activities and indispensable to providing the optimum guest experience.

ꢈAꢄINꢈ ꢂ SꢁꢃꢅICꢁS

ꢀINANCꢁ ꢂ CONTꢃOL

HUꢄAN ꢃꢁSOUꢃCꢁS

INꢀOꢃꢄATION SꢁꢃꢅICꢁS

This makes Holland Casino the only real casino in the Netherlands. Holland Casino’s head ofﬁce, opened in 2017, is located in Hoofddorp. Holland Casino employs a total of 3,899 employees, 50 of whom at Gaming & Casino Services, the Company we acquired in 2018.

ꢄAꢃꢊꢁTINꢈ ꢂ ꢁꢋCOꢄꢄꢁꢃCꢁ

SꢁCUꢃITꢆ ꢂ ꢃꢁSꢇONSIBLꢁ ꢈAꢄINꢈ

COꢃꢇOꢃATꢁ LꢁꢈAL ꢂ COꢄꢇLIANCꢁ
COꢃꢇOꢃATꢁ COꢄꢄUNICATIONS

Secretary to the Board

Holland Casino occupies a unique position in the Dutch and European gaming market, with more than 40 years of experience and a trendsetting, internationally recognised and award-winning responsible gaming policy. Holland Casino stands out thanks to its personal attention, high-quality hospitality and extensive care for all of its guests.
Holland Casino’s slot machines help the Company to differentiate itself from other operators, such as arcades and the catering industry. Both the maximum stake and the payment percentage are higher, and Holland Casino has no maximum when it comes to prizes on individual machines or additional progressive prizes. This is due to the fact that our responsible gaming policy and the Dutch Prevention of money laundering and ﬁnancing of terrorism Act (Wwft) are designed speciﬁcally for that purpose.

ꢇUꢃCHASINꢈꢉ ꢃISꢊꢉ ꢇꢄO

NORTH NETHERLANDS

SOUTH NETHERLANDS

Amsterdam Centre
Amsterdam West-Sloterdijk
Enschede
Breda Eindhoven Nijmegen Rotterdam Valkenburg Venlo

GAMING
&
CASINO SERVICES
BꢀVꢀ

Groningen Leeuwarden Scheveningen Utrecht Zandvoort

In 2018, Holland Casino recorded total revenue of EUR 656.5 million. Holland Casino is also aiming to obtain a licence for online gaming, now that legislation will make that possible

7

MISSION & STRATEGY

VISION

MISSION

AMꢁITION

STRATEGꢀ

Gaming is a part of life.

We provide the most

exciting gaming experience, always welcoming and engaged.
We understand the needs of our guests like no other and
We develop long-term, personal relationships with our guests. exceed expectations.
Our strategy is based on ﬁve pillars:

employees society guests innovation partnerships

8

STRATEGIC

EMPLOꢀEES

PIL_PL_IA_LLR_AS_RS

Clear division of tasks between head ofﬁce and casinos

Sustainable and up-to-date employment terms Leadership and talent development

SOCIETꢀ

High-grade responsible gaming policy

PARTNERSHIPS

Social engagement through hospitality, social connection and local relevance
Strategic partnerships

strengthen Holland Casino in a dynamic market
Attention for sustainability

GꢁESTS

Investing in guest experience Optimum and responsible use of data Respond to the wishes of new generations

INNOVATION

Innovating and improving concepts and products

Realising online proposition Choice for omni-channel approach

9

VAL^VUÂE^LUCÊR^CE^RAÊATI^TOÎON^{N M}MÔO^DDÊLEL

INPꢀT

OꢀTPꢀT

CORE VALꢀES
FINANCIAL

Engaged Surprising
Friendly Reliable
Solid ﬁnancial position

HꢀMAN
REALISING SOCIAL OꢁꢅECTIVES

ꢁꢂ CREATING A SAFE GAMING ENVIRONMENT

Service-oriented employees Execution responsible gaming policy

PRODꢀCTION TOOLS
RETꢀRN FOR OꢀR

SHAREHOLDERS

Gaming tables Slot machines F&B Casinos

OFFER OꢀR GꢀESTS A ꢃꢄ EXPERIENCE

ꢁꢀSINESS ACTIVITꢂ

INTELLECTꢀAL

Responsible gaming policy Hospitality Internal education / training In-house / own concepts / innovation

ENGAGED EMPLOꢂEES

Slot machines

Food & Beverage

Gaming tables

GOOD REPꢀTATION AND STRONG ꢁRAND
SOCIAL AND RELATIONSHIPS

Embedded in society Active relationship / contact with stakeholders Licences Government / legislation

STRATEGIC PILLARS

Employees Society
Innovation Partnerships
Guest

10

REPORT OF THE EXECUTIVE BOARD

11

READY FOR

THE FUTURE

Holland Casino continued to build on its strong foundations in 2018, with the opening of new casinos, a sharp focus on our guest experience and a strong internal organisation. CEO Erwin van Lambaart and CFO Ruud Bergervoet explain.

How would you describe this past year?

Erwin van Lambaart: I’ve referred to this past

period as a triple jump. Following a period of crisis, we returned to a structurally upward line in 2017 and deﬁned our HC2020 strategy. Last year, we continued our recovery at warm summer period obviously had an impact on the number of visits. However, we were able to largely compensate for that in the second half of the year, partly on the back of targeted guest promotions and campaigns. That was quite an achievement. Our NPS

score (guest satisfaction) also remains high.

full throttle and we made progress in the

realisation of our strategy. And we remained on course, despite of catching up we had to do. Ruud Bergervoet: Last year was a year in We will have to make ‘the leap’ in 2019/2020, to actually make us the best casino operator in Europe. This will place enormous demands on the resilience of our organisation. Our employees deserve a huge compliment for the fact that we continued to perform well in these dynamic times. which we returned to calmer waters and worked on our priorities with renewed focus. We were able to execute our 2020 strategy without any unexpected hurdles, which was great. The good thing is that we were able to accelerate the process and make investments, while our results remained solid.

We invested more than EUR 56 million in the new-build casino and the renovation of other casinos, plus slot machines, gaming concepts, our future online platform and system and process improvements. The (re-)opening of our casinos in Groningen and Amsterdam West-Sloterdijk will make a signiﬁcant

What do you consider the highlights of 2018?

Van Lambaart: From Las Vegas to Monaco,

casinos are asking themselves: how do we appeal to the next generation? I am very proud of the concept we developed in-house: the Experience Zone in Utrecht. This is a tailormade concept for new players that includes explanations of games, reduced stakes and

We have to make a leap in 2019

contribution to the continued growth of our results in 2019. The unprecedented long,

/2020.

12

‘Great to see our colleagues in Groningen have a ‘home’ again after the ﬁre.’

entertainment. The atmosphere, setting and experience are very deliberately different from the rest of our offerings. This concept is very distinctive and it has been highly successful. You know it’s special when people from our peer casinos all over Europe are now visiting us to see how successful this concept is. I also look back with a great deal of pleasure to the very stylish opening of our new casino Amsterdam West-Sloterdijk, something our 1,500 invitees are still talking about to this day. of the service activities of Gaming Support B.V. and we are very pleased with how these activities have been integrated. We replaced old systems and processes and improved our IT support for the casinos. Plus we made serious investments in the renewal of our games: we replaced no less than a sixth of our slot machines in 2018, so our guests can enjoy the latest in games. That is exactly what we stand for, after all.

We also made progress in the way we work with each other. We’ve set up multidisciplinary teams in which colleagues from different departments work together on specific components of our strategy. Each of these teams helps to improve our guests’ experience – the so-called guest journey – when they visit Holland Casino. This journey will look quite different in the future, mainly due to digitalisation and the omni-channel approach.
Our return to Groningen was a unique achievement. Within 16 months, we put together an atmospheric, temporary casino on Sontplein, the first pop-up casino in the world. It is great to see how our 15 colleagues have found a ‘home’ again after the fire in 2017. That was a very emotional moment for our employees, who have been remarkably flexible in working at other casinos after the fire. We also renovated our casino in Valkenburg, broke ground for our new casino in Venlo and