Annual Report 2013/2014
ANNUAL REPORT 2013/2014
2 SnowWorld at a glance
3 Key developments 2013/2014
4 Multi-year overview
6 Foreword
8 Composition of the Supervisory Board and Executive Board
10 Report of the Supervisory Board
12 Report of the Executive Board
29 Shareholder information
32 Risk management
34 Corporate Governance
39 Executive Board declaration
41 Financial statements 2013/2014
82 Other information
88 Locations
88 Colophon 2 SnowWorld N.V. Annual Report 2013 / 2014
SnowWorld at a glance
Profile SnowWorld, with its indoor skiing facilities, is one of the leading SnowWorld owns and operates two indoor ski resorts in the companies in the industry. Netherlands. They are located in Landgraaf and Zoetermeer and have a total snow surface of approximately 50,000 m². SnowWorld has achieved rapid growth in the Netherlands since its establishment in 1996. The strategy is aimed at both further In addition to the various ski slopes, both ski resorts feature a optimising the current ski resorts and rolling out the proven range of food and beverage facilities and meeting rooms. Winter successful concept more widely in Europe. SnowWorld entered sports stores and fitness and wellness centres also form part of the capital market in December 2013 via a listing on the NYSE the SnowWorld concept. The ski resort in Landgraaf furthermore Euronext Amsterdam in order to finance this strategy. comprises a four-star hotel with 100 rooms and an Outdoor Park. SnowWorld has 241 employees (FTE) and achieved revenue of € 25.8 million and net operating profit of € 1.8 million in the 2013/2014 financial year.
‘I wish we had snow like this in the Alps’ Olympic champion coach
Outdoor 2.0% Other 2.9%
Hotel 6.2%
Ski 53.4% Fitness 6.3%
Hospitality 29.2% Breakdown of revenue by activity in 2013/2014 SnowWorld N.V. Annual Report 2013 / 2014 3
Key developments 2013/2014
Strategic
d SnowWorld’s stock exchange listing on NYSE Euronext Amsterdam via a reverse takeover as of 10 December 2013 d Further development of the planned extension of the third slope in Zoetermeer
d Continued elaboration of new construction projects in Paris and Barcelona
d Decision not to go ahead with the announced acquisition of SnowPlanet in Spaarnwoude, the Netherlands
Financial
d Number of ski passes sold rose by 2.8% d Revenue rose by 1.5% to € 25.8 million d Gross margin increased by 0.8% to € 23.3 million d Operating EBITDA (excluding the once-only costs of the reverse takeover) decreased by 3.9% to € 8.2 million, due in part to recurring higher operating expenses connected with the flotation d Net operating profit (excluding the once-only costs of the reverse takeover) rose by 3.3% to € 1.8 million (€ 0.68 per share) d Once-only impact of the reverse takeover and share issue of € 1.9 million on equity (€ 0.5 million) and result (€ 1.4 million). Of this amount, € 0.3 million is cash out. d The operating cash flow decreased by 8.3% to € 5.4 million (excluding the once-only costs of the reverse takeover) d Issue of new shares at € 8 each on 19 February 2014 for a total amount of € 6.0 million d Improved solvency; equity surged by 91.6% to € 7.5 million (€ 2.54 per share) d Guarantee capital rose to 15.4% d Interest-bearing debt (excluding interest-rate swap) fell by € 5.9 million to € 39.4 million, representing a 13.0% decrease
4 SnowWorld N.V. Annual Report 2013 / 2014
Multi-year overview1
(consolidated figures as at 30 September)
Results (in € x 1,000) 2013/2014 2 2013/2014 2012/2013 2011/2012 2010/2011 2009/2010
Net revenue 25,759 25,759 25,378 25,944 25,951 26,132 In % compared to previous year 2% 2% –2% 0% –1% –11%
EBITDA 8,207 6,770 8,542 8,756 9,313 10,103 In % compared to previous year –4% –21% –2% –6% –8% –17%
Operating result (EBIT) 4,745 3,308 4,619 4,052 4,558 3,606 In % compared to previous year 3% –28% 14% –11% 26% –37%
Result after tax 1,767 386 1,710 1,084 1,377 676 In % compared to previous year 3% –77% 58% –21% 104% –63%
Cash flow (in € x 1,000) 2013/2014 2 2013/2014 2012/2013 2011/2012 2010/2011 2009/2010
Operating activities 5,432 5,237 5,921 5,790 6,509 7,561 Investment activities –1,410 –178 –1,107 –4,811 –1,981 –1,869 Financing activities –3,539 –4,923 –4,825 –988 –4,489 –5,156
Net cash flow 483 136 –11 –9 39 536
Personnel (in € x 1,000) 2013/2014 2012/2013 2011/2012 2010/2011 2009/2010
Number of employees (FTE) 241 238 247 246 249 In % compared to previous year 1% –4% 0% –1% –8%
Employee expenses 7,995 7,720 7,615 7,504 7,410 In % compared to previous year 4% 1% 1% 1% –8%
Net revenue per employee 107 107 105 105 105 In % compared to previous year 0% 2% 0% 0% –3%
Employee expenses per employee 33 32 31 31 30 In % compared to previous year 3% 5% 1% 3% 0%
Employee expenses as % of net revenue 31% 30% 29% 29% 28% In % compared to previous year 3% 3% 1% 2% 3%
1 The financial years 2010/2011 to 2013/2014 are presented on the basis of IFRS accounting policies. 2 This concerns the operating figures after deduction of the effects of the reverse takeover and the share issue. SnowWorld N.V. Annual Report 2013 / 2014 5
Statement of financial position data (in € x 1,000) 2013/2014 2012/2013 2011/2012 2010/2011 2009/2010
Capital use Non-current assets 54,281 56,202 59,502 59,478 91,088 Working capital –3,279 –3,150 –2,943 –3,395 –3,500
51,002 53,052 56,559 56,083 87,588
Finance Group equity 7,497 3,913 6,956 6,688 30,343 Provisions – – – – 7,309 Non-current liabilities 43,621 49,199 48,957 48,858 49,439 Receivable from/payable to participants 67 –13 704 604 525 Current liabilities to banks –183 –47 –58 –67 –28
51,002 53,052 56,559 56,083 87,588
Net investment 1,523 1,127 4,811 1,981 1,869 Depreciation –3,462 –3,923 –4,704 –4,755 –6,497 Revaluations – – – – 3,649
Interest-bearing debt as % of capital use 85% 93% 88% 88% 57%
Solvency 13% 7% 11% 11% 33%
Per share (in euros) 2013/2014 3 2013/2014 2012/2013 2011/2012 2010/2011 2009/2010
Earnings per share 0.68 0.15 0.56 0.29 0.37 0.18 Group equity per share 3.20 2.54 2.09 1.89 1.82 8.25 Cash flow from operating activities per share 2.10 2.02 1.92 1.57 1.77 2.06
3 This concerns the operating figures after deduction of the effects of the reverse takeover and the share issue. 6 SnowWorld N.V. Annual Report 2013 / 2014
Foreword
The 2013/2014 financial year was an extremely important one for SnowWorld due to the increase in net operating profit and, above ‘The greatest enjoyment is the all, the flotation in December 2013. enjoyment we can give our guests.’
Since the establishment of SnowWorld in 1996, we have Koos Hendriks, CEO continually focussed on further optimising the SnowWorld concept of offering a welcoming and inviting sport experience. The quality of our product, the snow and the food and beverage facilities, is a crucial element of this endeavour. The concept now has a proven track record spanning nearly two decades and we have formulated a growth strategy that is founded on this stable Strategy basis. In the years ahead we plan to both expand the location in SnowWorld’s strategy is aimed first and foremost at continuously Zoetermeer and build new indoor ski resorts in Paris and optimising the two existing indoor ski resorts. The strategy Barcelona. We have provided our company with access to the furthermore focuses on rolling out the successful concept on a capital market in order to make it easier to finance these activities. wider basis by opening new SnowWorld locations on the one hand and potential acquisitions on existing indoor ski resorts on Increased profit the other. SnowWorld has realised stable profit performance in recent years. Despite the difficult economic conditions in the Netherlands, The planned expansion of the third slope at our location in SnowWorld has been able to generate profits and stable cash Zoetermeer is an important development with respect to the flows over the past five years. We have also been profitable in the further optimisation of this location. We are also pleased that we past financial year, with the net operating profit increasing to have been able to make good progress in the past financial year € 1.8 million. with respect to the decision-making regarding these plans in cooperation with the Municipality of Zoetermeer. Based on this The number of ski passes sold rose by 2.8% in the financial year we expect to be able to begin using the lengthened slope in under review. This brought an end to the slight decrease in the September 2016. number of ski passes sold seen in recent years. We are convinced that the added attention we devoted last winter to creating a In addition to the ongoing attention to the development of our two wintery ambience featuring a range of activities around the slopes existing indoor ski resorts, we are working on developing new contributed to the increase in the number of ski passes sold. SnowWorld indoor ski resorts in Paris and Barcelona. Based on Establishment Opening of third Opening of third Acquisition Opening of Opening of Flotation the current status, we expect to be able to open our first foreign of SnowWorld ski slope (210 metres) (Fun Park) and of real estate four-star hotel Outdoor Park of SnowWorld Improved solvency location in September 2017. We are convinced that the SnowWorld by Koos Hendriks in Zoetermeer fourth ski slope and fitness (420 beds) in Landgraaf (250 metres) facilities in Landgraaf Following our flotation in December 2013, we issued new shares concept will be very successful in these cities. They are both in Landgraaf at both in February 2014. The issue proceeds totalling € 6.0 million cities that have large numbers of enthusiastic skiers and locations reduced our debt position and strengthened our solvency. Having snowboarders who currently are not able to practice their sport a good financial position is crucial within the context of executing close to home at an indoor facility. our strategy. The realisation of these new locations will give our employees additional opportunities to achieve further growth. The new 1996 2001 2002 2003 2007 2008 2012 2013 2014 locations will also create additional value for shareholders.
Opening of Opening of First indoor Issue Zoetermeer Landgraaf FIS World Cup of location with two location with in Landgraaf shares 160-metre ski slopes two ski slopes of 500 metres and 100 metres
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Outlook We have a positive outlook for the financial year 2014/2015. This is because we expect that the consequences of the difficult economic conditions for SnowWorld are now behind us. In addition, we have raised our prices for ski passes slightly for the first time in years. This price increase and a strong focus on controlling personnel and marketing costs, lower depreciation and interest expenses establish a firm foundation for the expected profit performance in the financial year 2014/2015.
I am proud of what we have been able to achieve in the past year. I would like to take this opportunity to thank all the guests that we had the privilege of welcoming to SnowWorld. They are the key to SnowWorld’s success and serve as our ambassadors through word-of-mouth advertising. I naturally would also like to thank all the SnowWorld employees for their commitment and enthusiasm. And a special word of thanks goes to our new shareholders who invest in SnowWorld and who are important for the further growth of our organisation. In addition, I would like to express my gratitude to our partners and suppliers for the confidence they have placed in us over the past year.
J.H.M. Hendriks, Chief Executive Officer
SnowWorld Timeline
Establishment Opening of third Opening of third Acquisition Opening of Opening of Flotation of SnowWorld ski slope (210 metres) (Fun Park) and of real estate four-star hotel Outdoor Park of SnowWorld by Koos Hendriks in Zoetermeer fourth ski slope and fitness (420 beds) in Landgraaf (250 metres) facilities in Landgraaf in Landgraaf at both locations
1996 2001 2002 2003 2007 2008 2012 2013 2014
Opening of Opening of First indoor Issue Zoetermeer Landgraaf FIS World Cup of location with two location with in Landgraaf shares 160-metre ski slopes two ski slopes of 500 metres and 100 metres
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Composition of the Supervisory Board and Executive Board Information on the management as at 1 October 2014
The management of SnowWorld is entrusted to the Executive Supervisory Board Board whose statutory members are appointed and dismissed by the Supervisory Board. The non-statutory members are appointed Supervisory Directors are selected and appointed based on a and dismissed in accordance with Dutch (labour) law. profile for members of the Supervisory Board. Mr A.J. Bakker and Ms B.K. Mentel were appointed members of the Supervisory Board at the General Meeting of Shareholders on 10 December 2013. The General Meeting of Shareholders also approved the appointment of Mr P.P.F. de Vries as Member of the Supervisory Board. The implementation of the appointment of Mr De Vries was postponed at his own request owing to the role of Value8 N.V., of which he is CEO, in the reverse takeover. The appointment of Mr De Vries as a member of the Supervisory Board was implemented on 6 January 2015.
A.J. (Hans) Bakker (1951) Chairman Year of appointment: 2013 End of current term: 2017 General Director of RAI Holding B.V. and Amsterdam RAI B.V. since 2002.
Auxiliary positions d Chairman of the Supervisory Board of Transavia Airlines B.V. d Chairman of the Supervisory Board of GVB Holding N.V.
Auxiliary positions at organisations d NBTC Holland Marketing Foundation (Chairman); d Jumping Amsterdam Foundation (Chairman); Bibian Mentel (left) and Hans Bakker d Member of the Commissie van Beroep van de Stichting Garantiefonds Reisgelden, the Stichting Calamiteitenfonds Reizen and the Stichting Garantiefonds Specialistische Touroperators; d Dutch Guide Dog Foundation; d Amsterdam Museum Foundation; and d Member of the Advisory Board of the Economics and Business Administration Faculty at the University of Amsterdam.
B.K. (Bibian) Mentel (1972) Member Year of appointment: 2013 End of current term: 2017 2014 Olympic para-snowboarding champion First place in the IPC para-snowboarding world rankings.
Auxiliary positions d Managing Director of the Mentelity Foundation; d Snowboarding promoter for the Paralympic Games; d Guest Speaker; and d Author.
Remuneration The Chairman of the Supervisory Board receives remuneration of € 20,000 per annum. The other member of the Supervisory Board receives remuneration of € 15,000 per annum. SnowWorld N.V. Annual Report 2013 / 2014 9
Executive Board Remuneration
The Executive Board of SnowWorld was comprised in the SnowWorld’s remuneration policy for its board members is aimed financial year 2013/2014 of Mr J.H.M. Hendriks in the position of at attracting, motivating and retaining qualified board members Chief Executive Officer (CEO) and the role of statutory director who have experience in the leisure industry. The total remuneration under the articles of association. of the Executive Board is comprised of the following components: a short-term basic remuneration, a bonus for performance in the short term (CEO), a bonus in shares for performance in the long term (CFO) and other fringe benefits. This mix of different forms of remuneration is intended to optimise company profits both in the short and long term. Amendments to the remuneration policy must be adopted by the General Meeting of Shareholders. The actual remuneration is set by the Supervisory Board.
Mr J.H.M. Hendriks receives his remuneration via a management contract. This contract is valid until 1 April 2019. The agreed annual management fee is € 280,000. A bonus in addition to this has been agreed that is dependent upon the amount of realised EBITDA, namely € 55,000 with EBITDA of between € 9 and € 10 million and another € 55,000 with EBITDA of above € 10 million. The aforementioned amounts can be indexed annually on 1 October. A termination compensation in the event of premature rescission of the management contract has not been agreed.
Mr W.A. Moerman has a permanent contract of employment. His salary is € 131,961 per year. Mr W.A. Moerman participates in the SnowWorld pension scheme. SnowWorld pays the related Wim Moerman (left) and Koos Hendriks pension premium.
Mr W.A. Moerman also served on the Executive Board in the SnowWorld has made a vehicle available to both members of the position of Chief Financial Officer (CFO) during the financial year Executive Board. No other fixed allowances are provided. under review. Mr J.H.M. Hendriks is majority shareholder of SnowWorld and J.H.M. (Koos) Hendriks (1949) Mr W.A. Moerman has been granted an option to acquire shares Chief Executive Officer in SnowWorld. Please refer to the Shareholder information on Mr J.H.M. Hendriks has a long track record in the winter sport page 29 of this annual report for more information on this matter. sector and has led SnowWorld’s activities without interruption since 1996.
Former activities d 1980 – 2001 Duijvestein Wintersport, owner d 1974 – 1979 Various sports stores, owner
W.A. (Wim) Moerman (1972) Chief Financial Officer Mr Wim Moerman has fulfilled the position of CFO at SnowWorld since November 2007.
Former activities d 1990 – 2007 Ernst & Young Accountants, Auditor
Auxiliary positions d Member of the Board of Coöperatieve Vereniging Notarishuis U.A. in Rotterdam 10 SnowWorld N.V. Annual Report 2013 / 2014
Report of the Supervisory Board
General SnowWorld will be implemented at a later time. The appointment was ultimately implemented after the end of the financial year. We are pleased to provide you with the Annual Report 2013/2014 Mr De Vries has served on the Supervisory Board since 6 January that has been drawn up by the Executive Board. This annual 2015. He has co-signed this report because he was serving as report includes the financial statements that have been audited Supervisory Director on the date that the annual report was by BDO Audit & Assurance B.V. and discussed with the Executive adopted. Board during its meeting on 6 January 2015 that was attended by the external auditor. The statement by the independent auditor is Supervisory Directors are selected and appointed based on included in this annual report in the ‘Other information’ section. a profile for members of the Supervisory Board. In accordance with the Dutch Management and Supervision Act and Book 2 of We are of the opinion that this annual report more than fulfils the the Dutch Civil Code, the company pursues a policy whereby transparency requirements and that it forms a good basis for the at least 30% of the Executive Board plus the Supervisory Board Supervisory Board’s accountability for its supervision. is comprised of women.
We propose that the General Meeting of Shareholders: Activities d Adopt the financial statements, which include the proposal for profit appropriation. d Discharge the Executive Board from liability for their The Supervisory Board held four plenary meetings with the management in the 2013/2014 financial year. Executive Board during the financial year. A meeting was also d Discharge the Supervisory Board from liability for their held with Value8 N.V. in order to evaluate the reverse takeover supervision of the Executive Board in the 2013/2014 financial and the share issue. In addition to the Supervisory Board’s year. periodic meetings with the Executive Board, there were also regular contacts outside of these meetings between the Composition of the Executive Board Supervisory Board and the Executive Board in the financial year 2013/2014 both by telephone and e-mail.
The Executive Board of SnowWorld was comprised in the The Supervisory Board did not hold any formal consultations financial year 2013/2014 of Mr J.H.M. Hendriks in the position of without the Executive Board being present. Chief Executive Officer (CEO) and the role of statutory director under the articles of association. The Supervisory Board has the following topics as set agenda points for its meetings with the Executive Board: the development Mr W.A. Moerman also served on the Executive Board in the of the financial results and the progress being made on the position of Chief Financial Officer (CFO) during the financial year projects being carried out within the framework of the strategy. under review. The current market developments are also discussed within this context. Composition of the Supervisory Board The Supervisory Board furthermore devoted extensive attention to the following topics in the 2013/2014 financial year: the reverse The Supervisory Board was comprised in the financial year takeover, the share issue, further improving the debt position, 2013/2014 of Mr A.J. Bakker and Ms B.K. Mentel. Mr A.J. Bakker the interim figures, the budget for 2014/2015, the appointment of and Ms B.K. Mentel were appointed members of the Supervisory BDO Audit & Assurance B.V. as auditor by the shareholders, the Board at the General Meeting of Shareholders on 10 December organisational structure and the decision-making regarding 2013 for a period of four years. The appointment of Mr P.P.F. de the proposed acquisition of SnowPlanet that ultimately did not go Vries as Supervisory Director was also approved at this General ahead. Meeting of Shareholders. In connection with the involvement of Value8 N.V., of which Mr De Vries is CEO, in the flotation of The Supervisory Board closely follows the plans relating to the SnowWorld and the related share issue, Mr De Vries requested company’s strategy in general and the accountability for the that his appointment to the position of Supervisory Director of related risks in particular. Further information on SnowWorld’s risk SnowWorld N.V. Annual Report 2013 / 2014 11
management is provided on pages 32 to 33 of this annual report. In the opinion of the Supervisory Board, the company has fulfilled The structure and operation of the related internal risk management that which is stated in the Code with respect to the independence and control systems have been discussed with the Supervisory of the Supervisory Directors in the financial year. Board. The Supervisory Board wishes to thank the Executive Board and The discussions of the annual results were conducted in the all the company’s employees for the tremendous dedication they presence of the external auditor. The Supervisory Board had two have demonstrated in the 2013/2014 financial year and wish to meetings with the external auditor during the financial year. These compliment them on the achieved results in the year under consultations did not provide any reasons to take exceptional review. measures. Zoetermeer, the Netherlands, 14 January 2015 The Supervisory Board also devoted attention to various schemes and regulations. This includes the Code of Conduct of SnowWorld The Supervisory Board N.V., the Executive Board Rules, the Supervisory Board Rules, A.J. Bakker, chairman the Insider Trading Regulations and the Whistleblower Scheme. B.K. Mentel These schemes and regulations have been evaluated and will be P.P.F. de Vries amended as necessary.
The Supervisory Board does not utilise key committees due to the size of both the company and the Supervisory Board itself.
Corporate Governance
The Supervisory Board and the Executive Board endorse the principles of the Corporate Governance Code (‘the Code’). The company applies the Code virtually in full. The few deviations from the Code that apply within SnowWorld N.V. relate primarily to the nature and size of the company. Both the aforementioned deviations and their explanation correspond more effectively with the company’s working method. The main points of SnowWorld’s Corporate Governance Policy and the deviations are stated on pages 34 to 37 of this annual report. The Supervisory Board ensured that the Code was applied within the company during the financial year. 12 SnowWorld N.V. Annual Report 2013 / 2014
Report of the Executive Board
General developments SnowWorld studied a potential acquisition of SnowPlanet in Spaarnwoude, the Netherlands, during the past financial year. The financial year 2013/2014 was an important year in the history It was concluded that the acquisition would not make the of SnowWorld. The shareholder of SnowWorld Leisure N.V. intended contribution to shareholder value. This is why it was decided to list the company on the stock exchange in the decided not to go ahead with the acquisition. summer of 2013. The flotation has both allowed the company to improve its solvency and provide it with access to the capital Activities market, which has made the company less dependent on the (future) availability of bank credit for the execution of its strategy. The activities of SnowWorld consist of operating two indoor ski The flotation process and the following issue of new shares resorts. These resorts are stand-alone winter sport centres where in February 2014 led to a further professionalisation of SnowWorld. guests can enjoy a combination of activities in an Alpine ambience. The introduction of a Supervisory Board played a key role in this respect. SnowWorld has formulated a clear strategy. The various slopes are covered with excellent snow and are The elaboration of this strategy occurs within a framework of risk suitable for both novice and advanced skiers and snowboarders. management and Corporate Governance. A challenging fun park is also part of the offering. The ski school provides lessons and courses at all levels.
‘There are no insignificant little In addition to the slopes, both ski resorts offer a selection of food and beverage facilities ranging from après ski bars to self-service details at SnowWorld: everything and à la carte restaurants. The various rooms can be used for is important’ meetings or other business packages. Both ski resorts also feature a modern fitness and wellness centre Rogier Adams, Location Manager at SnowWorld Zoetermeer and a Duijvestein winter sport store.
SnowWorld has been in the media frequently in connection with both the flotation and the Winter Olympic Games in Sochi. Visibility in the media is extremely important to SnowWorld. We are convinced that the large amount of free publicity has contributed to the growth in the number of ski passes sold. SnowWorld is one of the larger leisure suppliers in the Netherlands Amsterdamsterdamerdam with the number of ski passes sold rising by 2.8% to 476,600. The HagueHaaggue ZoeZoetermeertermeer UUtrechttrecht SnowWorld expressly focussed in the last winter season on RoRotterdamtterdam expanding the range of activities on offer at both indoor ski resorts. During the busy weekends, these activities on and
around the slopes both extend the amount of time visitors spend DüsseldorfDüsseldorf at the ski resorts and enhance the winter sport atmosphere. We believe this has also been a driver of growth in the number of LanLaLandgraafndgdgrg aaf CologneCologne ski passes sold. MaastrichtMaastricht LiègeLiège SnowWorld N.V. Annual Report 2013 / 2014 13
The investment in the fitness and wellness centre in Zoetermeer in the autumn of 2014 also corresponds with the strategy. This investment further improves the quality of the product, which in turn means that the number of members is expected to grow.
Opening new SnowWorld locations Expanding the number of locations will lead to further growth of the company. This expansion can be realised by either building new locations or acquiring existing indoor ski resorts.
The knowledge and experience gained since the establishment of SnowWorld in 1996 have made it possible to set up new indoor ski resorts with relatively low investments and low operating costs. Opening new locations will also create economies of scale with respect to purchasing materials and holding costs, including financing costs. SnowWorld as a whole will also become more attractive to organisations for sponsoring.
Within this context, SnowWorld is working on the development of SnowWorld Landgraaf furthermore has a four-star hotel with new locations in Paris and Barcelona. Based on the general 100 rooms and 420 beds and an Outdoor Park. This 25,000-square course of affairs, we expect that it will be possible to open our metre Outdoor Park provides a unique offering and is one of the first foreign location in September 2017. largest of its kind in Europe. SnowWorld critically assesses the existing indoor ski resorts that Strategy are offered for acquisition. The location must in any case be close to a large agglomeration and be easily accessible. It must, however, also be possible to convert the indoor ski resort to the General SnowWorld formula so that it can contribute to SnowWorld’s SnowWorld has formulated a strategy that is aimed at creating earnings per share. value for its shareholders through its welcoming and inviting sport experience. Financing strategy SnowWorld’s strategy is aimed at ensuring that each investment SnowWorld’s strategy is aimed first and foremost at the continual helps create shareholder value. The financing strategy for the optimisation of the two existing indoor ski resorts. The strategy intended new locations is to have approximately 60% loan capital also focuses on opening new SnowWorld locations. and 40% equity, whereby a local partner injects approximately half of the equity and SnowWorld the other half. Due to the Optimising existing indoor ski resorts combination of the expected returns on the investment and an Optimising the existing ski resorts entails adding activities that attractive mix of financing, new locations are intended to make strengthen the traditionally less busy summer season, expanding a substantial contribution to the growth in earnings per share. the existing resorts and further optimising the internal processes. A potential share issue by SnowWorld will be kept as limited as possible in order to minimise dilution for shareholders. The plan to lengthen the third slope at the Zoetermeer location fits in with this strategy. This extension, which we expect will be realised within two years, is forecast to lead to both an increase in the number of visitors and the average amount of time they spend at the ski resort. 14 SnowWorld N.V. Annual Report 2013 / 2014
SWOT analysis Approximately twenty million people live within a 1 to 1.5-hour drive from the two locations. The visitors to the location in SnowWorld is and will remain critical with respect to its own Zoetermeer are primarily Dutch. The location in Landgraaf does, performance, strategy and the ensuing opportunities and potential however, attract not only Dutch but also Belgian (approximately risks (please also refer to page 32 to 33 of this report for 30%) and German (approximately 10%) visitors due to its information on risk management). SnowWorld uses instruments geographic situation. including a strengths/weakness analysis in order to remain successful in the long term as well (please refer to the diagram SnowWorld’s key target groups are private individuals who are below). preparing for a skiing/snowboarding holiday, businesses for meetings and teambuilding activities, schools and ski teams. Market position The indoor ski resort in Landgraaf is distinctive from the vast majority of other indoor ski resorts in Europe thanks to its four- star hotel and the official FIS competition slope. These facilities Indoor skiing make SnowWorld Landgraaf attractive for ski and snowboard There are approximately 60 indoor ski resorts worldwide. A large athletes from around the world. proportion of these ski resorts is concentrated in Western Europe in countries including the Netherlands, the United Kingdom, Zoetermeer Landgraaf Germany and Belgium. Snow surface (m2) 14,400 35,750 There are seven indoor ski resorts in the Netherlands, which Number of slopes 3 5 means there is relatively a large number of these facilities in the Longest slope (m) 210 520 country. SnowWorld has two indoor ski resorts and is market Number of lifts 5 7 leader in Europe in terms of snow surface, visitor numbers, Number of hospitality facilities 5 9 returns and reputation among international athletes. Surface of hospitality facilities (m2) 3,500 5,000 Number of hotel beds – 420 This leading position has been realised since 1996 through the Surface of fitness and focus on hospitality, the quality of the product, such as the snow wellness centre (m2) 2,900 1,650 and food and beverage facilities and the specific Austrian winter sport atmosphere. The location of both indoor ski resorts, which are surrounded by large numbers of skiers and snowboarders, are easily accessible and obviously play an important factor in the success.
Strengths Weaknesses d Owner and operator of Europe’s largest indoor ski resorts and d The management’s limited track record with international one of the market leaders worldwide. expansion. d Extensive knowledge and many years of experience in the field d Relatively high capital requirements. of developing, building and operating indoor ski resorts. d Leisure depends on economic conditions. d A proven welcoming and inviting leisure concept consisting primarily of skiing and food and beverage facilities. d Access to capital markets.
Opportunities Threats d Growth through opening new locations. d The opening of other indoor ski resorts or leisure activities d Growth in revenue from consultancy activities based on in the vicinity of SnowWorld. existing knowledge. d Other market conditions in the areas in which SnowWorld d More efficient use of the facilities during the traditionally less is expanding. busy summer season. d Prolonged poor economic conditions. SnowWorld N.V. Annual Report 2013 / 2014 15
SnowWorld operates in the relatively stable indoor skiing market. SnowWorld faces primarily competition from local fitness centres. The Netherlands has had approximately one million skiers/ This is particularly the case in Zoetermeer that has around twenty snowboarders for years (source: Dutch Ski Association). other fitness centres. This was one of the reasons why SnowWorld The number of skiers/snowboarders in the rest of Europe is also invested in refurbishing the fitness and wellness centre in relatively stable. SnowWorld competes with five other indoor ski Zoetermeer in December 2014. This location now has a completely resorts that have real snow in the Netherlands and to a lesser new look and feel, the latest state-of-the-art Technogym cardio degree with indoor ski resorts in West Germany and Belgium. equipment and a new member tracking system. This enables it to In addition to the indoor ski resorts, SnowWorld experiences be even more distinctive from the competition in Zoetermeer. competition from dry slopes and ski simulators, of which there are around 15 and 65 respectively in the Netherlands. Outdoor Park SnowWorld has had an Outdoor Park in Landgraaf since May SnowWorld is not aware of any concrete plans to build new 2012. It features equipment and attractions including a climbing indoor ski resorts in the Netherlands, Belgium and Germany. park, a zip-line track and an alpine coaster. SnowWorld has seen the popularity of the Outdoor Park increase further in the second The revenue performance of both the various food and beverage full year of its operation. The core of the park’s operation lies in facilities at both indoor ski resorts and the hotel in Landgraaf is the last quarter (July – September) of the financial year. closely linked to the development of the number of ski slope This makes it possible to achieve both a better utilisation visitors. The different food and beverage facilitates at both indoor of SnowWorld’s overall facilities and more optimum deployment ski resorts face only limited competition from other food and of employees during the traditionally less busy summer period. beverage facilities in Zoetermeer and Landgraaf. With respect to the Outdoor Park, SnowWorld competes with Fitness and wellness other players including theme parks. Weather conditions have an SnowWorld is furthermore active in the market for the operation influence on the park’s revenue. of fitness and wellness centres. These operations have their own target group and are only dependent to a limited degree on the visitors of the indoor ski slopes. While the hotel guests in Landgraaf and particularly the international athletes are frequent users of the fitness and wellness centre in Landgraaf, both centres also focus on a different local target group.
Indoor ski resorts in Europe 1 1
2 2
3 3
4 4
5 3 12 5
2 6 6 21 5 7 6 3 7 3 8 4 1 13 11 8 4 4 5 10 9
10 1
11
9 12
13 16 SnowWorld N.V. Annual Report 2013 / 2014
Financial developments
Revenue and gross margin SnowWorld’s revenue in the 2013/2014 financial year (1 October margin also rose to € 23.3 million (2012/2013: € 23.1 million). 2013 through 30 September 2014) grew slightly to € 25.8 million, The increase in gross margin is attributable primarily to a higher compared to € 25.4 million in the previous financial year. Gross margin on the ski activities.
(in € x 1,000) 2013/2014 2012/2013 difference revenue cost price gross margin revenue cost price gross margin gross margin
Ski 13,766 748 13,018 13,319 738 12,581 3.5% Hospitality 7,510 2,397 5,113 7,480 2,329 5,151 – 0.7% Fitness 1,617 9 1,608 1,772 7 1,765 – 8.9% Hotel 1,609 69 1,540 1,544 72 1,472 4.6% Outdoor 530 – 530 488 – 488 8.6% Other 727 – 727 775 – 775 – 6.2%
Gross profit 25,759 3,223 22,536 25,378 3,146 22,232 1.4%
Other operating income 744 858 – 13.3%
Gross margin 23,280 23,090 0.8%
Zoetermeer 9,895 1,390 8,505 9,628 1,343 8,285 2.6% Landgraaf 15,864 1,833 14,031 15,750 1,803 13,947 0.6%
Gross profit 25,759 3,223 22,536 25,378 3,146 22,232 1.4%
Other operating income 744 858 – 13.3%
Gross margin 23,280 23,090 0.8%
Revenue from skiing activities encompasses both the proceeds While the hotel occupancy rate remained virtually the same in of the ski passes sold and the revenue from lessons and skiing 2013/2014 as in the previous year at 55.6%, the average room and snowboarding equipment rental. The number of ski passes price did increase. This accounts for the hotel’s increased gross sold rose by 2.8% in the last financial year to 476,600. As a result profit. there was also an increase in revenue from equipment rental. The increase in the number of ski passes sold was slightly greater The number of visitors and consequently the revenue increased in Zoetermeer than in Landgraaf. This also explains the stronger further during the second full year of the operation of the Outdoor increase in gross profit in Zoetermeer compared to Landgraaf. Park.
The average food and beverage spending per ski pass sold The first six months of the financial year (October through March) decreased slightly in the past financial year (2.5%). This is are the most important by far from a financial perspective for primarily attributable to a change in the product range. SnowWorld. Around 70% of the annual revenue is realised during these months. The number of ski slope visitors is considerably The fitness and wellness centres had a combined total of more lower in the second half of the year. Important activities during than 3,600 members in the past financial year. The revenue from these traditionally less busy summer months are the training fitness activities in Zoetermeer decreased by approximately 8.9% sessions for numerous (international) athletes in Landgraaf, the in the past financial year due to falling member numbers at this operation of the Outdoor Park in Landgraaf and summer camps location. in Zoetermeer. 4 SnowWorld N.V. Annual Report 2013 / 2014 17 18 SnowWorld N.V. Annual Report 2013 / 2014
Growth in earnings per share Processing the reverse takeover The average number of outstanding shares in SnowWorld N.V. in SnowWorld was listed on the stock exchange in December 2013 the financial year 2013/2014 was 2,587,265. This figure is used via a reverse takeover. Both the processing of this transaction as the basis for calculating the figures per share. Net operating and the share issue in February 2014 had a once-only effect on profit per share, excluding the effects of the flotation, amounted SnowWorld’s result and capital. to € 0.68 in the 2013/2014 financial year, which equals an increase of € 0.58 compared to the previous financial year. Application of the related applicable International Financial Operating cash flow per share amounted to € 2.10. Group equity Reporting Standards (‘IFRS’) has a total effect of € 1.9 million. per share (based on 2,950,163 outstanding shares at the end of Of this amount, € 1.4 million has been allocated to the result and the financial year) amounted to € 2.54 at the end of the 2013/2014 the remainder has been deducted from equity as a direct change financial year. As stated previously, payment of a dividend will not in capital. Of these total costs, there was an actual cash outflow be proposed for the financial year 2013/2014. A dividend policy of € 0.3 million. that will provide for a dividend payment percentage of 30% to 50% of the net profit is an item on the agenda of the General The amount of € 1.9 million is composed of the following: Meeting of Shareholders to be held on 12 March 2015. For more information about the dividend policy, please refer to page 31 of this annual report.
Cost item Charged Charged Corporate (in € x 1,000) to equity to result income tax Total
Out-of-pocket costs 86 287 –56 317 Costs option Value8 106 264 – 370 Costs reverse takeover 356 886 – 1,242
Total 548 1,437 –56 1,929
For a further explanation of the processing of the reverse takeover, The effect of these once-only costs of the flotation on the please refer to the general accounting principles. 2013/2014 results is as follows:
(in € x 1,000) result costs of reverse operating result 2013/2014 takeover 2013/2014 2012/2013
Net revenue 25,759 – 25,759 25,378 Gross margin 23,280 – 23,280 23,090 EBITDA 6,770 1,437 8,207 8,542 Operating result (EBIT) 3,308 1,437 4,745 4,619 Result after tax 386 1,381 1,767 1,710
EBITDA and EBIT Tax burden The higher gross margin did not lead to increased EBITDA. This The tax burden was very high in 2013/2014 at 62.3%, compared is attributable to higher personnel costs owing both to a slight to 24.9% in 2012/2013. This high tax burden is due to the fact increase in the number of employees and the costs for an option that a large proportion of the once-only costs connected with the scheme and an increase in cost of sales. This is offset by lower flotation are not deductible for tax purposes. When corrected for premises costs. Apart from the once-only effects of the costs this effect, the tax burden in 2013/2014 amounts to 32.8%. related to the flotation, there are also structurally higher costs in connection with the flotation. This entails costs that relate to Net profit matters such as Euronext and AFM and to the Supervisory Board Taking into account the once-only effect of the costs incurred for and the higher costs for auditing. This is one of the reasons why the listing on the stock market and the share issue, net operating the operating expenses rose slightly in 2013/2014. On balance, profit rose by 3.3% to € 1.8 million. Net operating profit per share operating EBITDA in the financial year decreased in comparison rose by 21.4% to € 0.68. to the previous year by 3.9% to € 8.2 million.
EBIT nonetheless rose by 2.7% to € 4.7 million due to lower depreciation and interest expenses. 1 SnowWorld N.V. Annual Report 2013 / 2014 19 20 SnowWorld N.V. Annual Report 2013 / 2014
Investments as of June 2014, amounts to € 76.7 million. This amount is During the 2013/2014 financial year, SnowWorld invested primarily € 27.7 million higher than the valuation based on the historical in the further development of the new construction projects in cost price. For more information, please refer to page 62 of this Zoetermeer, Paris and Barcelona, the replacement of three annual report. snowcats for a total of € 0.4 million and the overhaul of the chair lift in Landgraaf. These investments totalled € 1.4 million, Financing compared to investments totalling € 1.1 million in the preceding SnowWorld Leisure N.V. has a credit arrangement with financial year. As a result the amount of investment is below the ABN AMRO bank. This arrangement is the main source of level of depreciation (€ 3.5 million). financing for SnowWorld. Ratios have been agreed with the bank with respect to a minimum level of guaranteed assets and a Operating cash flow maximum total net debt/EBITDA ratio and a minimum debt The operating cash flow decreased by 8.3% in the past financial service capacity ratio (DSCR). SnowWorld fulfilled these ratios at year to € 5.4 million (excluding the once-only costs of the reverse the end of the 2013/2014 financial year. takeover). This decrease was primarily caused by the lower The credit arrangement is based on a variable interest rate EBITDA and higher tax payments in the 2013/2014 financial year. comprised of the 1-month Euribor rate plus a fixed interest surcharge. An interest-rate swap has been entered into within the Solvency framework of reducing the interest risk. The utilisation of this Equity amounted to € 7.5 million at the end of the 2013/2014 interest-rate swap means that a large proportion of the interest- financial year (year-end 2012/ 2013: € 3.9 million). Equity per bearing debt is fixed. This interest-rate swap had a negative value share amounted to € 2.54 at the end of the financial year (year- of € 4.1 million at the end of the financial year (2012/2013: end 2012/2013 € 2.09). The increase of € 3.6 million (91.6%) is € 3.9 million). the result of the processing of the reverse takeover, the proceeds of the issue of new shares minus the deduction of the once-only SnowWorld’s total interest-bearing debt (excluding the interest- costs for both transactions and the addition of the achieved rate swap) decreased by more than € 5.9 million to € 39.4 million net operating profit for the 2013/2014 financial year in the financial year 2013/2014 (2012/2013: € 45.3 million). (€ 1.8 million) to the reserves. Events after the balance sheet date This improvement has caused equity to increase by 91.6%. There were no events after the balance sheet date that have Solvency at the end of the financial year rose to 13.3% (year-end a material effect on the financial statements. 2012/2013: 6.7%). Guarantee capital increased to 15.4% as at 30 September 2014.
In order to promote transparency, we believe it is important to provide further information about the valuation of the property, plant and equipment (land and buildings). The cumulative purchase value of the land and buildings amounted to € 80.5 million as at 30 September 2014. After deduction of the cumulative depreciation of € 31.5 million, the remaining carrying amount of the land and buildings stands at € 49.0 million. This involves the valuation based on the historical cost price. The current value of the land and buildings, according to the appraisal
‘We see an improvement in the balance sheet ratios. Guarantee capital increased to 15.4% and the amount of interest-bearing debt was substantially reduced.’ Wim Moerman, CFO 7 SnowWorld N.V. Annual Report 2013 / 2014 21
Paris
Paris 226 SnowWorld N.V. Annual Report 2013 / 2014
Barcelona
Zoetermeer SnowWorld N.V. Annual Report 2013 / 2014 23
Progress on new construction projects The procedure for amending the zoning plan is currently underway. The planned concept includes, in addition to two ski slopes, two SnowWorld is currently developing three construction projects. ice skating rings and a hotel with 200 rooms. The application for The first entails lengthening the third slope at the location in the building permit is expected to be submitted in 2015. Based Zoetermeer and the second and third involve new locations in on the current planning, SnowWorld Barcelona could also open Paris and Barcelona. its doors in September 2017.
Lengthening the third slope in Zoetermeer The planned location for SnowWorld Barcelona is near the port The current third slope in Zoetermeer is 210 metres in length. area. A LNG terminal is located in this area that currently ‘dumps’ SnowWorld plans to lengthen it to 300 metres. The objective of most of its available cooling output into the Mediterranean Sea. lengthening the slope is two-fold: to increase the number of Part of this cooling output will be made available to SnowWorld, visitors and to extend the average amount of time visitors spend which means it will not have to produce its own cooling energy. at the ski resort. Based on an investment of approximately € 45.0 million and a SnowWorld has been working for a long time in collaboration with well-considered financing mix, SnowWorld Barcelona is expected its advisers and a contractor on the development of this to contribute positively to the earnings per share. lengthening. Key steps forward were made in 2013/2014. The pre-design for the municipal zoning plan change was presented The planning of the development of Paris and Barcelona is for perusal in June 2014 and the different perspectives have now currently running parallel. SnowWorld will not, however, build two been incorporated into the draft zoning plan. The Municipal locations simultaneously. Given the size of the projects, the Executive of Zoetermeer is expected to reach a decision in Executive Board of SnowWorld is opting for sequential January 2015 regarding the draft zoning plan and the building development. A delay may arise with one of the projects that will permit to be submitted for perusal at that time. This would mean cause it to fall behind the other project. If this does not occur, that the building permit could be granted in the first half of 2015. the Executive Board of SnowWorld will make a choice together In the event that an appeal against this permit is made to the with the Supervisory Board as to which project will be carried Council of State, SnowWorld expects, assuming that the Council out first. of State rules in SnowWorld’s favour, to be able to commence the construction in the spring of 2016, after which the lengthened With respect to the project in Barcelona, talks regarding the slope could be opened in September 2016. project are already underway with interested banks and local investors. For more information concerning the planned structure The estimated investment amounts to approximately € 10.0 million. of the financing, please refer to page 13 of this annual report.
Paris Organisation and employees The Executive Board of SnowWorld is convinced that Paris constitutes an excellent location for rolling out the SnowWorld concept. It is a large agglomerate where more skiers and General snowboarders live than in the whole of the Netherlands. SnowWorld has a decentralised organisational structure. Agreements have been made with important and well-versed The locations in Landgraaf and Zoetermeer are stand-alone ski business partners such as Bouygues and SKISET. The company resorts that are led by location managers. These location is currently working on a procedure for changing the zoning plan. managers, together with their management teams, are responsible Negotiations are also being conducted with a contractor and the for their own activities and results. Marketing and sales and other municipality with regard to the contractor agreement and the support services such as human resources, accounting and ground lease agreement respectively. The planned indoor ski IT are coordinated centrally. resort is a copy of the operational SnowWorld concept in Landgraaf (ski resort including hotel and Outdoor Park). SnowWorld attaches a great deal of importance to the further The location for the envisioned indoor ski resort is Elancourt, development of the organisation and its employees’ talents in a suburb of Paris within the agglomeration of Saint Quentin and order to continually improve all aspects of the services. There is Yvelines. Based on the current planning, an irrevocable building also a focus on ensuring sufficient development at the permit is expected in 2015. Taking into account the construction management level, which includes the location managers, with time, this means SnowWorld Paris could open in September the objective of further reducing the dependence on the key 2017. Based on an estimated investment of approximately officers (Mr J.H.M. Hendriks and Mr W.A. Moerman). There are € 55.0 million and a well-considered financing mix, it is expected (internal) education and training programmes at lower levels in to make a positive contribution to the earnings per share. the organisation, for example for employees who have just joined the company. Barcelona Barcelona also offers very good possibilities for opening a new location. Just like Paris, Barcelona is a large agglomerate whose population includes large numbers of skiers and snowboarders. Barcelona is considering being a candidate for the 2026 Winter Olympics, which could have a positive effect on a future location. 24 SnowWorld N.V. Annual Report 2013 / 2014
SnowWorld can be characterised as a young and dynamic Company safety company that is constantly on the move and that operates The safety of its guests and employees is crucially important to flexibly. Both the employees and the Executive Board members SnowWorld. Safety is continually improved wherever possible. and managers are easy to approach. Entrepreneurism continues to be an important starting point. Enjoying the work is a top Sport and play activities entails risks to (physical) health, priority. Employees are sporty and healthy in mind and body. This particularly if they are carried out on an underground of snow. It fits in with the total concept of a welcoming and inviting sport is inherent to activities such as these that our guests could fall experience. and injure themselves. This is why a large proportion of the employees have a first-aid certificate. A number of employees Number of employees also have an In-House Emergency Services (BHV) Certificate and SnowWorld had an average of 241 FTEs in the 2013/2014 SnowWorld has both an Evacuation and an In-House Emergency financial year, compared to 238 in the 2012/2013 financial year. In Services plan. In order to prevent accidents as much as possible, view of the strongly fluctuating seasonal pattern, more than 800 everyone who steps onto the ski slopes must adhere to a set of people work at SnowWorld’s locations during peak periods. slope rules and regulations. Based on the total number of employees in December 2013, 38.4% of the employees have a permanent employment contract Corporate social responsibility and 61.6% have a temporary contract. 54.4% of the employees are men and 45.6% are women. Absenteeism at SnowWorld was low in the 2013/2014 financial year at 2.4% (2012/2013: 2.7%). Corporate social responsibility forms an integral part of SnowWorld’s day-to-day activities. This corporate social The average number of employees (in FTEs) per activity: responsibility spans numerous aspects of the business operations, such as caring for the environment, which includes saving energy, 2013/2014 2012/2013 and social aspects such as sponsoring athletes and offering possibilities for people with a disability to participate in sports. Ski 83 84 SnowWorld is aware of its responsibility vis-à-vis the environment. Hospitality 76 72 This involves both the daily consumption of gas, water and Fitness 21 22 electricity, waste flows and the use of coolants. Outdoor 6 6 Other 55 54 Electricity consumption SnowWorld is constantly looking for new possibilities for saving Total 241 238 energy. For example, the now fully automated operation of the cooling systems in Landgraaf produces considerable energy savings. Residual heat that is released when producing cooling The average number of employees per location: energy for the slopes is used to heat the hotel and this contributes to an efficient use of energy. 2013/2014 2012/2013 The new Technogym cardio equipment that was placed in the fitness and wellness centre in Zoetermeer in December 2014 Zoetermeer 107 101 sends electricity back to the grid when it is used. Landgraaf 134 137 SnowWorld uses LED lighting in its restaurants and rooms wherever possible. The results of the tests that have been carried Total 241 238 out with respect to the use of this lighting on the slopes have unfortunately not been satisfactory. Nevertheless, this form of lighting is undergoing rapid development and SnowWorld is Terms of employment closely tracking these developments. The employees of SnowWorld do not fall under a Collective The potential for installing solar panels on the roofs of the Labour Agreement. SnowWorld has its own terms of employment SnowWorld locations is also being studied. The roofs of the package and pension scheme. The terms of employment include slopes in Landgraaf are particularly well-positioned for this form a provision allowing employees to use the fitness and wellness of energy generation. centres. SnowWorld encourages them to use these facilities. The energy that SnowWorld uses is generated sustainably using SnowWorld does not have a Works Council. water, wind or biomass.
Waste flows SnowWorld’s business activities generate various waste flows. ‘SnowWorld is considered This involves primarily waste from the restaurants. SnowWorld to be one of the nicest companies separates waste into paper, glass, (frying) oil and food waste. to work at in the Netherlands’
Koos Hendriks, CEO 5 SnowWorld N.V. Annual Report 2013 / 2014 25 26 SnowWorld N.V. Annual Report 2013 / 2014
Use of coolants
SnowWorld uses various coolants in its systems, namely CO2, ammonia, R22 and glycol. SnowWorld has a maintenance contract with a cooling maintenance company in order to ensure that the systems remain in optimum condition. Preventive maintenance and periodic checks contribute to this. European legislation permits the use of the coolant R22, which has been used in Zoetermeer since the opening in 1996, for many years to come. However, it may no longer be topped up from 1 January 2015. SnowWorld is currently studying the feasibility of converting the R22 cooling system so that it will be suitable for the use of less environmentally harmful ammonia. Measures have been taken in order to ensure the continuity of the cold production in the event of a disaster.
Sponsoring SnowWorld offers a range of possibilities for people with a disability to participate in sports. Within this context, SnowWorld supports various foundations, including Stichting geHandicapten Nicolien Sauerbreij Bibian Mentel Op Ski’s (SHOS) and the Nederlands Visueel-gehandicapten Ski Vereniging (NVSV). SnowWorld also supports the Mentelity Foundation and the Bas van der Goor Foundation which organises annual camps in Landgraaf for children with diabetes. Action plans 2014/2015 SnowWorld also sponsors a number of top athletes and sporting talents, including: Strategic d Nicolien Sauerbreij; Further elaboration of new construction projects in: d Dimi de Jong; d Zoetermeer; d Michelle Dekker; d Paris; and d Joey van Noort; d Barcelona. d Milina van Unnik; and d Steve Krijbolder. Financial d Introduction of dividend policy. Contact with local residents The indoor ski resort in Landgraaf is located directly on the edge Operational of a residential area. SnowWorld remains in periodic contact with d ‘Road to Pyeongchang’, where the Winter Olympics will be representatives of the neighbourhood. The purpose of these held in 2018, in October-November 2014, comprising: contacts is to inform each other about developments and to • The International Paralympic Committee Alpine Skiing prevent any potential nuisance as much as possible. (IPCAS) race • EC slopestyle (European championship for a snowboard Sports and exercise discipline) SnowWorld’s core activities are aimed at sports and exercise. • National championship alpine skiing Within this framework, SnowWorld conducts an active policy • FIS competition snowboard alpine designed to enthuse young people to enjoy skiing or snowboarding • French indoor youth championship at SnowWorld. Numerous schoolchildren are given the opportunity d Investments in the fitness and wellness centre in Zoetermeer; to become acquainted with snow sports at sharply reduced rates and every year. Children are also encouraged to take up sports and d Studies into the possibilities and potential execution of the exercise during birthday parties or summer camps that are led by conversion of the cooling system in Zoetermeer. professionals.
Internships SnowWorld provides hundreds of interns with an internship each year in order to enable to gain their first work experience. The interns are, for example, students from various CIOS (sport) educational programmes who help provide skiing and snowboarding lessons. Other departments such as food and beverage, fitness, reception and equipment rental also offer numerous internships. 3 SnowWorld N.V. Annual Report 2013 / 2014 27 28 SnowWorld N.V. Annual Report 2013 / 2014
Outlook
We have a positive outlook for the financial year 2014/2015. This reflects our expectation that the effects of the difficult economic conditions for SnowWorld are now behind us. We have also raised the prices for the ski passes slightly for the first time in years. This price increase and a strong focus on controlling personnel and marketing costs, lower depreciation and interest charges form a strong foundation that underpins the expected profit performance in 2014/2015.
SnowWorld expects to once again be able to fulfil the ratios agreed with ABN AMRO and to meet its repayment obligations in the coming financial year.
SnowWorld furthermore expects to be able to maintain an investment level that corresponds with the average of the last couple of financial years. Investment in the coming financial year will involve the fitness and wellness centre in Zoetermeer, the further elaboration of the new construction projects and the regular replacement investments.
It is impossible to say at this time when the investments in the construction of the various projects will commence. The conversion of the cooling system in Zoetermeer is expected to be carried out within two years. However, an investment decision has not yet been made.
The average number of employees is expected to decrease slightly in the coming financial year compared to the 2013/2014 financial year due to the increased focus on the efficiency of the operation. SnowWorld N.V. Annual Report 2013 / 2014 29
Shareholder information
d The loan of € 5.0 million to J.H.M. Hendriks Beheermaatschappij B.V. was provided on market terms, including an interest rate of 1 month Euribor rate + a surcharge of 5% per year, a recessive collateral on 25% of the shares of SnowWorld Leisure N.V. d The 1,875,000 A shares were issued at a price of € 8 per share. The (non-listed) A shares were then converted into (listed) ordinary shares. As a result, J.H.M. Hendriks Beheermaatschappij B.V. became a majority shareholder of the listed company SnowWorld N.V., at that time holding 85.8% of the outstanding share capital of SnowWorld N.V.
The shareholders also unanimously approved the following, inter alia: d The change of name from Fornix BioSciences N.V. to SnowWorld N.V. d Change of the financial year from the calendar year to a split financial year beginning on 1 October and ending on 30 September, in line with the financial year of SnowWorld Leisure N.V. Sounding the gong on 12 December 2013 d Authorisation to issue 1,250,000 shares and also a continuous authorisation for 18 months to issue shares representing up to 15% of the issued share capital. d A reverse share split in the proportion of 25 old shares with a nominal value of € 0.15 for one new share with a nominal value of € 3.75. d The appointment of Mr J.H.M Hendriks as a member of the Executive Board and the resignation of Ms M.E.T. Pigeaud as member of the Executive Board; and d The appointment of Mr A.J. Bakker, Ms B.K. Mentel and Mr P.P.F. de Vries as members of the Supervisory Board and General the resignation of Mr F.C. Lagerveld, Mr F.J.J. Lucassen and SnowWorld is a public limited company incorporated under Mr F. van Westen. It should be noted that the implementation Dutch law. On 10 December 2013, the Extraordinary General of the appointment of Mr De Vries was postponed at his own Meeting of Shareholders of Fornix BioSciences N.V. unanimously request owing to the role of Value8 N.V. in the reverse approved the acquisition of SnowWorld Leisure N.V., as result of takeover. The appointment of Mr De Vries as a member of the which SnowWorld obtained a stock exchange listing. This reverse Supervisory Board was implemented on 6 January 2015. takeover took the following form: d Fornix BioSciences N.V. acquired 100% of the outstanding The change of the name and the reverse share split were effected share capital of SnowWorld Leisure N.V. from J.H.M. Hendriks on 12 December 2013. Beheermaatschappij B.V. for an amount of € 20.0 million. d The payment was effected by issuing 1,875,000 new A shares Up to 10 December 2013, Fornix BioSciences N.V. had 8,047,688 (which cannot be traded on the stock exchange or converted) shares with a nominal value of € 0.15 in issue. Due to the reverse to J.H.M. Hendriks Beheermaatschappij B.V., and by providing split as of 10 December 2013, this was reduced by a factor 25 to a loan of € 5.0 million to J.H.M. Hendriks Beheermaatschappij 321,908 shares with a nominal value of € 3.75. Owing to the issue B.V. of 1,875,000 shares in connection with the reverse takeover of d As a result of this issue, the interest of the shareholders of SnowWorld as of 10 December 2013 and the share issue on Fornix BioSciences N.V. at that time was diluted to 14.7%. 19 February 2014, in which 753,255 new shares were issued at a 30 SnowWorld N.V. Annual Report 2013 / 2014
price of € 8 for an amount of over € 6.0 million, the number of Issue and acquisition of shares issued shares as at 30 September 2014 was 2,950,163. (in the company’s own capital) In accordance with the Articles of Association of the company, Prior to the announcement of the reverse takeover by SnowWorld, shares are issued pursuant to a resolution of the General Meeting the share price of Fornix BioSciences N.V. (adjusted for the of Shareholders. On 10 December 2013, the General Meeting of reverse split) was € 8 per share. This price was also used by Shareholders authorised the Executive Board of the company, for SnowWorld as the issue price, both for the shares issued in a period of 18 months, to issue up to 15% of the issued capital, connection with the reverse takeover and for the share issue on which included an authorisation to limit or exclude pre-emptive 19 February 2014. rights. No use was made of this authorisation.
Capital structure The acquisition by the company of shares in its capital that have SnowWorld shares have been listed on NYSE Euronext Amsterdam not been paid up is void. The company may acquire shares in its since 10 December 2013 and are followed by analysts from SNS own capital or depositary receipts for them in order to transfer Bank. them to employees of the company or of a group company pursuant to a scheme applicable to them. The acquisition of The public limited company SnowWorld has one class of issued shares in its own capital will be effected following a decision by shares. The same rights and obligations attach to each share and the Executive Board requiring the approval of the Supervisory the shares carry no special rights of control. In addition SnowWorld Board. applies no restrictions of voting rights, except for any restrictions prescribed by law. No depositary receipts are issued for the Option scheme and shareholdings of employees and mem- shares and there are no other protective measures. SnowWorld bers of the Executive Board shares are freely transferable. SnowWorld does not have a scheme granting rights to employees to take or acquire shares in the capital of the company. There are no agreements with any shareholder(s) that may provide cause for limiting the transfer of shares or of depositary However, Mr W.A. Moerman (CFO) obtained an option to acquire receipts for shares issued with its cooperation or the transfer of shares in the capital of the company. SnowWorld thereby grants voting rights. the irrevocable and non-transferable right to acquire, during a term of 5 years from 1 December 2013, shares in full and The major shareholders referred to in the section ‘Major Holdings unencumbered ownership at an exercise price of € 8 per share Disclosure Act’ that have reported their interest in the share with a nominal value of € 3.75. The option relates to 147,508 capital of SnowWorld to the Netherlands Authority for the shares. The transfer can be effected by purchase or issue. In the Financial Markets (AFM) in accordance with the Major Holdings event of a repayment of capital (capital reduction), special Disclosure Act hold around 86% of the shares. Accordingly, the dividend distributions (dividends not charged to profit) and/or number of freely tradable shares amounts to around 413,000. share splits, the option will be adapted in accordance with the SnowWorld shares were quoted at € 8 at the close of the financial generally accepted rules for doing so. The shares that are year. acquired pursuant to the option agreement will carry all rights attached to the other ordinary shares already in issue at that time. Major Holdings Disclosure Act The option is exercisable in 5 equal annual steps as from Pursuant to the Major Holdings Disclosure Act the shareholders 1 December 2013. The option can be exercised in full or in part of a Dutch listed company are obliged to inform the Netherlands during the term. If the option has not been exercised (in full) Authority for the Financial Markets if they hold an equity interest during the term concerned, it will expire by operation of law after in the share capital of that company of more than 3%. the end of the term. If the option is exercised in full during the The following shareholders have reported that (on 1 October term, the shareholding of the existing shareholders will be diluted 2014) they had an interest of more than 3% in the share capital by around 4.8%. of SnowWorld N.V.: d J.H.M. Hendriks Beheermaatschappij B.V. (68%); Mr J.H.M. Hendriks (CEO) holds 68% of the issued capital of d Value8 N.V. (15%); and SnowWorld N.V. through his company, J.H.M. Hendriks d J.P. Visser (3%). Beheermaatschappij B.V. SnowWorld N.V. Annual Report 2013 / 2014 31
Option scheme for Value8 Dividend policy In addition to Mr W.A. Moerman (CFO), Value8 N.V. likewise SnowWorld N.V. intends to apply a pay-out ratio of around 30% obtained, as part of the flotation of SnowWorld, an option to to 50% with effect from the financial year 2014/2015. As part of acquire shares in the capital of the company. SnowWorld thereby SnowWorld’s plans for growth, an optional dividend (cash grants the irrevocable and non-transferable right to acquire, dividend or stock dividend) may be proposed in the first few during a term of 5 years from 1 December 2013, shares in full and years. This proposal will be submitted to the shareholders in the unencumbered ownership at an exercise price of € 8 per share next General Meeting of Shareholders (12 March 2015). with a nominal value of € 3.75. The option relates to 5.0% of the shares in issue on the exercise date. Even if SnowWorld proceeds Financial calendar 2014/2015 to issue shares for the exercise of the option, after that issue Publication of annual results 2013/2014 14 January 2015 Value8 N.V. will still acquire 5.0% of the issued capital at that time Trading update for 1st quarter 2014/2015 11 February 2015 by exercising its option. In the event of a repayment of capital General Meeting of Shareholders 12 March 2015 (capital reduction), special dividend distributions (dividends not Publication of interim figures 2014/2015 27 May 2015 charged to profit) and/or share splits, the option will be adapted Trading update for 3rd quarter 2014/2015 5 August 2015 in accordance with the generally accepted rules for doing so. The shares that are acquired pursuant to the option agreement will Contact carry all rights attached to the other ordinary shares already in SnowWorld sets store by a transparent dialogue with the financial issue at that time. The option can be exercised in full or in part markets. As a company that was recently listed on the stock during the term. If the option has not been exercised (in full) exchange, SnowWorld would like to hear your views on this during the term concerned, it will expire by operation of law after annual report and the investor relations policy. We invite you to the end of the term. Value8 N.V. will then no longer be able to inform us of your views by sending an e-mail for the attention of derive any rights from the option. If the option is exercised in full Mr W.A. Moerman, CFO, to the following e-mail address: during the term, the shareholding of the existing shareholders will [email protected]. be diluted by 5.0%. You can also reach us at: Organisational structure SnowWorld Zoetermeer SnowWorld has one 100%-owned subsidiary, SnowWorld Leisure Buytenparklaan 30 N.V. established in Zoetermeer, which in turn holds 100% of the 2717 AX Zoetermeer shares in SnowWorld International B.V., likewise established in The Netherlands Zoetermeer. The structure of SnowWorld can be depicted T: +31 (0) 79 3 202 202 schematically as follows: www.snowworld.com [email protected]
shareholders 100% 100%
SnowWorld SnowWorld SnowWorld N.V. Leisure N.V. International B.V. 32 SnowWorld N.V. Annual Report 2013 / 2014
Risk management
SnowWorld’s risk management and control system is designed to d Financing. SnowWorld Leisure N.V. has entered into a credit provide insight into the degree to which the strategic and agreement with ABN AMRO. The facility entails obligations in operational objectives can be achieved, the financial reporting is terms of repayments and interest payments. It also includes reliable and the relevant laws and regulations are complied with. ratios with regard to a minimum level of guaranteed assets, a Doing business intrinsically means incurring risks but the policy is maximum level for the net debt/EBITDA ratio and a minimum designed to prevent or otherwise mitigate them, and to do so in level for the debt service capacity ratio (DSCR). SnowWorld relation to the likelihood that the risks will materialise and to the monitors these ratios on a monthly basis. SnowWorld complies associated impact. with these ratios. Any consequences of a failure to meet these ratios will be decided on by the bank at such time as The current risk management and control system can be a situation of default exists. described as follows, in outline: the revenue of each location is d Interest rates. The interest-bearing debts comprise mainly reported on a daily basis and the various other performance debts to credit institutions. These debts to credit institutions indicators are reported on a weekly basis, included hours worked, carry a variable interest rate, consisting of a 1-month Euribor the (forecast of the) hotel occupancy, changes in the numbers of rate increased by a fixed interest surcharge. An interest-rate members of the fitness and wellness centres as well as the swap has been concluded to mitigate interest rate risks, and packages booked and offers outstanding. The results achieved therefore the interest on a significant part of the interest- are reported on a monthly basis and discussed with the location bearing debt is fixed. The policy is not to trade in financial managers by the Executive Board. If necessary the forecast for derivatives but to use them only to hedge risks. the full year is adjusted. d Laws and regulations. The activities of SnowWorld are affected by numerous laws and regulations, for instance concerning The Executive Board of SnowWorld reports the key performance the flotation of SnowWorld, but also the granting of permits indicators to the Supervisory Board on a monthly basis. Every and regulations in the field of safety and fire safety. Changes quarter, the Executive Board presents a financial report with in tax laws, for instance with regard to VAT or social security notes and forecasts to the Supervisory Board. The Executive charges, can immediately affect SnowWorld’s results. Board exemplifies the budget at least once a year. The Supervisory SnowWorld has various sources of information that provide it Board meets at least four times a year to discuss matters with early notification of significant changes in laws and including the submitted reports. regulations so that, where possible, suitable measures can be taken. No (potential) changes in laws and regulations are Every year the external auditor reviews, insofar as relevant for the currently known that could materially affect SnowWorld’s audit of the financial statements, the design, existence and results. effective operation of the risk management and control system d Environment. The commercial operation of indoor ski resorts and reports his findings thereon to the Executive Board and the involves environmental risks. These mainly concern the use of Supervisory Board. The report for 2013/2014 comprises findings coolants for cooling the ski slopes. Owing to changes in laws that indicate not so much serious shortcomings as and regulations the topping up of R22, the coolant used at the recommendations for improvements. The recommendations have Zoetermeer location, is no longer permitted with effect from been followed up where possible. 1 January 2015. The Executive Board of SnowWorld is preparing a conversion of the system in Zoetermeer for the The risks arising from the strategy, financial reporting, operations use of a different coolant. Measures have been put in place and compliance, in relation to the company’s objectives, are for the intervening period to ensure the continuity of the continually identified and analysed and if necessary controls are cooling output. SnowWorld has concluded a multi-year implemented to limit the risks. This is documented in a risk maintenance agreement with a specialised cooling monitoring instrument and discussed with the Supervisory Board maintenance company that safeguards that the systems will by the Executive Board. The principal risks are: permanently be in optimum condition so that the environmental risks are minimised. SnowWorld N.V. Annual Report 2013 / 2014 33
d Electricity. Changes in electricity prices have an immediate impact on the profitability of SnowWorld. Electricity prices are followed on a daily basis. SnowWorld concludes forward contracts with its energy suppliers to minimise price risks. The electricity prices have been locked in up to 31 December 2017, in relation to expected consumption levels. d Growth. SnowWorld is preparing several development projects. These concern new locations in Paris and Barcelona and the extension of the third slope at the location in Zoetermeer. In preparing these projects, SnowWorld depends significantly on (local) politics with regard to changes in zoning plans and grants of building permits. These political processes can take a long time. The projects are capital- intensive. SnowWorld’s capacity to finance them will depend on the availability of bank loans and it may in addition have to draw on the capital market to further strengthen its equity. The development projects are based on a profitability forecast by the Executive Board of SnowWorld. These forecasts have been substantiated to the greatest possible extent by external reports. Actual results can differ from expected results. The Executive Board reports on the progress of the various projects in every meeting of the Supervisory Board.
The Executive Board believes that the internal risk management and control system of SnowWorld is adequate and effective and that the financial reporting is free of material misstatements. Despite the daily efforts to control the risks there is no absolute assurance that material misstatements, errors, fraud, losses or unlawful acts can be prevented. 34 SnowWorld N.V. Annual Report 2013 / 2014
Corporate Governance
General At least one General Meeting of Shareholders is held each year. The General Meeting of Shareholders adopts the financial SnowWorld has a two-tier governance model, which means that statements and has powers regarding the appointment and the management and the supervision thereof are segregated. The dismissal of members of the Supervisory Board. Executive Board is tasked with the day-to-day management of the company and is responsible for the strategy with the The Executive Board enables employees to report, without associated risks, results and the social aspects of doing business endangering their legal position, perceived irregularities of that are relevant for the company. The Executive Board is a general, operational or financial nature to an independent accountable to the Supervisory Board and to the General Meeting confidential counsellor. This Whistleblower Scheme is available of Shareholders. The Executive Board is guided in discharging its on the company’s website. duties by the interests of the company and its activities, and weighs up the relevant interests of the various parties involved in SnowWorld and the Dutch Corporate Governance Code the company. The Dutch Corporate Governance Code (‘the Code’) applies to all Dutch companies with a stock exchange listing and consists of The Supervisory Board is responsible for the supervision of the a system of rules of conduct for good and responsible governance. performance of the Executive Board and also advises the Executive Board. The Executive Board and the Supervisory For the text of the Code, see the website of the Corporate Board are jointly responsible for representing the interests of the Governance Code Monitoring Committee: http:// stakeholders. commissiecorporategovernance.nl/corporate-governance-code. The Code contains both specific principles and best practice The stakeholders are the groups and individuals that directly or provisions, as well as guidelines for adequate supervision of indirectly influence, or are influenced by, the activities of the them. SnowWorld endorses the principle that a sound and company. They include the employees, shareholders and other transparent system of ‘checks and balances’ is important for the providers of capital, suppliers, customers, government bodies, trust in companies that operate in the capital market. SnowWorld educational and knowledge institutions, social and trade believes that transparency and openness in supervision and associations (including NGOs) and the communities in which accountability are conditions for good governance. Below, SnowWorld is active. SnowWorld explains why it does not comply with some best practice provisions. SnowWorld N.V. is subject to the two-tier board system, which follows from, among other things, the far-reaching powers of the The composition and size of the Executive Board are based on General Meeting of Shareholders as determined by the company’s the profile and the strategy of the company. The expertise, Articles of Association. experience and the various competencies of the members of the Executive Board are required to contribute to this profile and the The company’s Articles of Association stipulate that the members strategy. of the Supervisory Board, on a nomination by the Supervisory Board, are appointed by the General Meeting of Shareholders. The composition and size of the Supervisory Board are likewise The General Meeting of Shareholders can, by an absolute based on the profile and the strategy of the company. majority of the votes cast, representing at least one third of the The expertise, experience and the various competencies of the issued capital, pass a resolution of no confidence in the members of the Supervisory Board should contribute, in line with Supervisory Board. the profile drawn up by it, to good supervision of the management and the general course of affairs in the company. In the financial The members of the Executive Board of the company are year, the combination of these elements has led to the fact that appointed and dismissed by the Supervisory Board. the current Supervisory Board consists of one man and one A resolution to amend the Articles of Association of the company woman at present. With a view to a balanced composition, can only be passed by the General Meeting of Shareholders on a the Supervisory Board stated in its profile that it would aim as proposal of the Executive Board, after approval by the Supervisory much as possible for a diverse composition, where possible by Board. age and gender. SnowWorld N.V. Annual Report 2013 / 2014 35
In accordance with its Articles of Association and the provisions III.5.4 and III.5.5 of the Corporate Governance Code, SnowWorld has drawn up ‘The audit committee shall in any event focus on supervising the the Executive Board Rules and the Supervisory Board Rules. activities of the management board with respect to: They lay down, among other things, how the General Meeting of a) the operation of the internal risk management and control Shareholders, the Executive Board and the Supervisory Board systems, including supervision of the enforcement of relevant relate to each other and what their powers are in relation to the primary and secondary legislation, and supervising the operation company. of codes of conduct; b) the provision of financial information by the company (choice of Departures from the Code accounting policies, application and assessment of the effects of new rules, information about the handling of estimated items in the financial statements, forecasts, work of internal and external Below, SnowWorld sets out which best practice provisions auditors, etc.); it does not comply with and the reason for this. c) compliance with recommendations and observations of internal and external auditors; Best practice provision d) the role and functioning of the internal audit function; II.1.1 e) the policy of the company on tax planning; ‘A management board member is appointed for a maximum period f) relations with the external auditor, including, in particular, his of four years. A member may be reappointed for a term of not more independence, remuneration and any non-audit services for the than four years at a time.’ company; g) the financing of the company; and SnowWorld has not implemented this provision in the Executive h) the applications of information and communication technology.’ Board Rules. A management agreement was concluded between SnowWorld N.V. and J.H.M. Beheermaatschappij B.V. in As SnowWorld N.V. has no audit committee, the tasks referred to December 2013. This agreement became effective on 1 October in this best practice provision are performed by the Supervisory 2013 and will apply until 1 April 2019. In this management Board. agreement, Mr J.H.M. Hendriks is appointed as director under the articles of association of SnowWorld N.V. for the term of the III.5.6 and III.5.7 agreement. Therefore Mr J.H.M. Hendriks has been appointed as ‘The audit committee may not be chaired by the chairman of the statutory director under the articles of association of SnowWorld Supervisory Board or by a former member of the management N.V. for a term of more than four years. board of the company. At least one member of the audit committee shall be a financial expert within the meaning of best practice III.5.1 to III.5.3 provision III.3.2.’ ‘The Supervisory Board shall draw up terms of reference for each committee. The terms of reference shall indicate the role and Owing to the limited size of the Supervisory Board SnowWorld responsibility of the committee concerned, its composition and the N.V. has no audit committee. manner in which it discharges its duties. The terms of reference may provide that a maximum of one member of each committee may not be independent within the meaning of best practice provision III.2.2. The terms of reference and the composition of the committees shall be posted on the company's website. The report of the Supervisory Board shall state the composition of the committees, the number of committee meetings and the main items discussed. The Supervisory Board shall receive from each of the committees a report of its deliberations and findings.’
Owing to the limited size of the Supervisory Board SnowWorld N.V. has no key committees. 36 SnowWorld N.V. Annual Report 2013 / 2014
III.5.8 to III.5.10 As SnowWorld N.V. has no selection and appointment committee, ‘The audit committee shall decide whether and, if so, when the owing to the limited size of the Supervisory Board, the tasks chairman of the management board (chief executive officer), the referred to in these best practice provisions are performed by the chief financial officer, the external auditor and the internal auditor, Supervisory Board. should attend its meetings. The audit committee shall meet with the external auditor as often as it considers necessary, but at least once III.8.1 to III.8.4 a year, without management board members being present. The ‘The chairman of the management board may not also be or have remuneration committee shall in any event have the following duties: been an executive director. The chairman of the management board a) making a proposal to the Supervisory Board for the remuneration shall check the proper composition and functioning of the entire policy to be pursued; board. The management board shall apply chapter III.5 of this code. b) making a proposal for the remuneration of the individual members The committees referred to in chapter III.5 shall consist only of non- of the management board, for adoption by the Supervisory executive management board members. The majority of the Board; such proposal shall, in any event, deal with: (i) the members of the management board shall be non-executive directors remuneration structure and (ii) the amount of the fixed and are independent within the meaning of best practice provision remuneration, the shares and/or options to be granted and/or III.2.2.’ other variable remuneration components, pension rights, redundancy pay and other forms of compensation to be awarded, SnowWorld N.V. has no one-tier board structure. Therefore the as well as the performance criteria and their application; and best practice provisions referred to above do not apply to c) preparing the remuneration report as referred to in best practice SnowWorld N.V. provision II.2.12.’ IV.2.1 to IV.2.8 As SnowWorld N.V. has no audit committee and no remuneration ‘The management of the trust office shall enjoy the confidence of the committee, owing to the limited size of the Supervisory Board, depositary receipt holders and operate independently of the the tasks referred to in these best practice provisions are company which has issued the depositary receipts. The trust performed by the Supervisory Board. conditions shall specify in what cases and subject to what conditions holders of depositary receipts may request the trust office to call a III.5.11 to III.5.13 meeting of holders of depositary receipts. The managers of the trust ‘The remuneration committee may not be chaired by the chairman office shall be appointed by the management of the trust office. The of the Supervisory Board or by a former member of the management meeting of holders of depositary receipts may make recommendations board of the company, or by a Supervisory Board member who is a to the management of the trust office for the appointment of member of the management board of another listed company. No persons to the position of manager. No management board more than one member of the remuneration committee may be a members or former management board members, Supervisory member of the management board of another Dutch listed company. Board members or former Supervisory Board members, employees If the remuneration committee makes use of the services of a or permanent advisers of the company should be part of the remuneration consultant in carrying out its duties, it shall verify that management of the trust office. A person may be appointed to the the consultant concerned does not provide advice to the company’s management of the trust office for a maximum of three 4-year terms. management board members.’ The management of the trust office shall be present at the general meeting and shall, if desired, make a statement about how it Owing to the limited size of the Supervisory Board SnowWorld proposes to vote at the meeting. In exercising its voting rights, the N.V. has no remuneration committee. trust office shall be guided primarily by the interests of the depositary receipt holders, taking the interests of the company and its affiliated III.5.14 enterprise into account. The trust office shall report periodically, but ‘The selection and appointment committee shall in any event focus at least once a year, on its activities. The report shall be posted on on: the company’s website. The report referred to in best practice a) drawing up selection criteria and appointment procedures for provision IV.2.6 shall, in any event, set out: Supervisory Board members and management board members; a) the number of shares for which depositary receipts have been b) periodically assessing the size and composition of the Supervisory issued and an explanation of changes in this number; Board and the management board, and making a proposal for a b) the work carried out in the year under review; composition profile of the Supervisory Board; c) the voting behaviour in the general meetings held in the year c) periodically assessing the functioning of individual Supervisory under review; Board members and management board members, and reporting d) the percentage of votes represented by the trust office during the on this to the Supervisory Board; meetings referred to at c); d) making proposals for appointments and reappointments; and e) the remuneration of the members of the management of the trust e) supervising the policy of the management board on the selection office; criteria and appointment procedures for senior management.’ f) the number of meetings held by the management and the main items dealt with in them; SnowWorld N.V. Annual Report 2013 / 2014 37
g) the costs of the activities of the trust office; Conflicts of interest h) any external advice obtained by the trust office; With a view to complying with the Code, SnowWorld is required i) the positions of the managers of the trust office; and to report transactions with Executive Board members that j) the contact details of the trust office. involved conflicts of interests and that were of material significance The trust office shall, without limitation and in all circumstances, to the company and/or for the Executive Board member, together issue proxies to depositary receipt holders who so request. Each with a statement of the conflict of interest. depositary receipt holder may also issue binding voting instructions to the trust office in respect of the shares which the trust office holds In the financial year 2013/2014 the following transactions with an on his behalf.’ Executive Board member took place that involved a conflict of interest: These best practice provisions do not apply to SnowWorld N.V. d The acquisition that took place on 10 December 2013 of as no depositary receipts have been issued for the shares of SnowWorld Leisure N.V. by Fornix BioSciences N.V. from SnowWorld N.V. J.H.M. Hendriks Beheermaatschappij B.V. Mr J.H.M. Hendriks is the sole director of J.H.M. Hendriks Beheermaatschappij IV.3.1 B.V. and also the CEO of SnowWorld and involved as such in ‘Meetings with analysts, presentations to analysts, presentations to this transaction; investors and institutional investors and press conferences shall be d In addition, Mr J.H.M. Hendriks is a member of the Executive announced in advance on the company's website and by means of Board of SnowWorld. In that connection, J.H.M. Hendriks press releases. Provision shall be made for all shareholders to follow Beheermaatschappij B.V. has concluded a management these meetings and presentations in real time, for example by agreement with SnowWorld N.V. For a discussion of this means of webcasting or telephone. After the meetings, the agreement, see the composition of the Executive Board on presentations shall be posted on the company’s website.’ page 9 of this annual report.
In view of the limited size of the company SnowWorld N.V. will The best practice provisions II.3.2. to II.3.4 laid down in the Code only facilitate such options if new facts are disclosed during the were complied with in entering into the transactions. This means presentation or meeting that were not known or not deemed to that the conflict of interest was reported in advance to the be known by the shareholders, or had not been publicly disclosed, chairman of the Supervisory Board (of Fornix BioSciences N.V. at before the presentation or meeting. that time), that this Supervisory Board (without the Executive Board member concerned being present) decided that a conflict IV.4.1 to IV.4.3 of interest existed, and the Executive Board member concerned ‘Institutional investors (pension funds, insurers, investment did not take part in the discussion and decision-making on the institutions and asset managers) shall publish annually, in any event subject concerned. In addition, the aforesaid Supervisory Board on their website, their policy on the exercise of the voting rights for approved the transaction and the transaction was agreed on shares they hold in listed companies. Institutional investors shall terms that are customary in the sector. report annually, on their website and/or in their annual report, on how they have implemented their policy on the exercise of the voting rights in the year under review. Institutional investors shall report at least once a quarter, on their website, on whether and, if so, how they have voted as shareholders at the general meeting.’
These best practice provisions do not apply to SnowWorld N.V. as it has no institutional investors.
V.3.1 to V.3.3 ‘The external auditor and the audit committee shall be involved in drawing up the work schedule of the internal auditor. They shall also take cognizance of the findings of the internal auditor. The internal auditor shall have access to the external auditor and to the chairman of the audit committee. If there is no internal audit function, the audit committee shall review annually the need for an internal auditor. Based on this review, the Supervisory Board shall make a recommendation on this to the management board in line with the proposal of the audit committee, and shall include this recommendation in the report of the Supervisory Board.’
These best practice provisions do not apply to SnowWorld N.V. as it has no internal audit function, owing to its limited size. 382 SnowWorld N.V. Annual Report 2013 / 2014 SnowWorld N.V. Annual Report 2013 / 2014 39
Executive Board declaration
As director under the articles of association of SnowWorld N.V. I have drawn up the annual report and the financial statements 2013/2014. I hereby declare that, to the best of my knowledge: d The financial statements provide a true and fair view of the assets, liabilities and financial position of the company and the subsidiaries included in the consolidation; d The annual report provides a true and fair view of the position as at the balance sheet date and the performance during the year of the company and the companies affiliated with it; and d The material risks potentially facing the company are described in the annual report.
Zoetermeer, the Netherlands, 14 January 2015
Executive Board J.H.M. Hendriks, Chief Executive Officer 40 SnowWorld N.V. Annual Report 2013 / 2014 SnowWorld N.V. Annual Report 2013 / 2014 41
FINANCIAL STATEMENTS 2013/2014
42 Consolidated income statement
43 Consolidated statement of comprehensive income and earnings per share
44 Consolidated statement of financial position
46 Consolidated statement of cash flow
48 Consolidated statement of changes in Group equity
49 Principles for valuation and determination of the result in the company and consolidated financial statements
54 Notes to the consolidated income statement
60 Notes to the consolidated statement of financial position
72 Commitments not appearing in the statement of financial position
73 Company income statement
74 Company statement of financial position
76 Company statement of changes in equity
77 Notes to the company income statement
78 Notes to the company statement of financial position
81 Commitments not appearing in the statement of financial position 42 SnowWorld N.V. Annual Report 2013 / 2014
Consolidated income statement
(in € x 1,000)
2013/2014 2012/2013
Net revenue 25,759 25,378 Cost of goods sold and services provided –3,223 –3,146
Gross profit (1) 22,536 22,232
Other operating income (2) 744 858
Gross margin 23,280 23,090
Wages and salaries (3) 6,786 6,560 Social insurance payments (4) 1,209 1,160 Depreciation of property, plant and equipment (5) 3,462 3,923 Other operating expenses (6) 8,515 6,828
Total operating expenses 19,972 18,471
Operating result 3,308 4,619
Financial income and expenses (7) –2,285 –2,343
Result before tax 1,023 2,276
Tax (8) –637 –566
Result after tax 386 1,710
EBITDA 6,770 8,542 Adjusted for costs of reverse takeover 8,207 8,542
EBIT 3,308 4,619 Adjusted for costs of reverse takeover 4,745 4,619
Result after tax 386 1,710 Adjusted for costs of reverse takeover 1,767 1,710
SnowWorld N.V. Annual Report 2013 / 2014 43
Consolidated statement of comprehensive income and earnings per share (in € x 1,000)
2013/2014 2012/2013
Result after tax 386 1,710
Items to be recognised in the income statement in future years: • Movement in valuation of interest- rate swap –275 1,129 • Effect on corporate income tax 69 –282
Total direct changes in Group equity (15) –206 847
Total result 180 2,557
Earnings per share 0.15 0.56 Earnings per share (adjusted for costs of reverse takeover) 0.68 0.56 Diluted earnings per share 0.15 0.56
Total result per share 0.07 0.83 Total result per share (adjusted for costs of reverse takeover) 0.60 0.83 Diluted total result per share 0.07 0.83
For an explanation of the earnings per share and the total result per share, see ‘Note on the earnings per share’ under ‘Principles for valuation and determination of the result in the company and consolidated financial statements’. 44 SnowWorld N.V. Annual Report 2013 / 2014
Consolidated statement of financial position
(before profit appropriation, in € x 1,000)
Assets 30 September 2014 30 September 2013
Non-current assets
Intangible non-current assets (9) 1,044 1,044
Property, plant and equipment (10) • Land and buildings 49,038 51,231 • Machinery and installations 112 221 • Other equipment 2,321 2,415 • Assets in production 1,586 1,242 53,057 55,109
Financial non-current assets (11) 180 49
Current assets
Inventory (12) 312 398
Accounts receivable (13) • Trade receivables 551 513 • Receivable from shareholder – 13 • Tax and social insurance contributions 69 51 • Other receivables, accrued income and prepaid expenses 368 363 988 940
Cash and cash equivalents (14) 399 327
Total assets 55,980 57,867
SnowWorld N.V. Annual Report 2013 / 2014 45
Equity and liabilities 30 September 2014 30 September 2013
Group equity (15) 7,497 3,913
Non-current liabilities (16) 39,346 44,530
Current liabilities (17) Repayment obligation on non-current liabilities 4,275 4,669 Debts to credit institutions 216 280 Payable to suppliers and trading credits 1,420 1,627 Payable to shareholder 67 – Tax and social insurance contributions 842 472 Other payables and accruals 2,317 2,376 9,137 9,424
Total equity and liabilities 55,980 57,867
46 SnowWorld N.V. Annual Report 2013 / 2014
Consolidated statement of cash flow
(in € x 1,000)
2013/2014 2012/2013
Cash flow from operating activities Operating result 3,308 4,619 Adjustments for: Depreciation and amortisation 3,462 3,923 Movement in deferred tax credit (excluding interest-rate swap) –131 483 Costs of reverse takeover (non-cash items) 1,242 – Movements in working capital: • Movement in inventory 86 187 • Movement in receivables –48 220 • Movement in current liabilities (excluding credit institutions) –74 –1,063 -36 -656 Cash flow from business operation 7,845 8,369 Interest paid –2,250 –2,366 Income tax paid –358 –82 –2,608 –2,448 Cash flow from operating activities 5,237 5,921
Cash flow from investment activities Reverse takeover: • Cash acquired 1,233 – • Assets/liabilities acquired –1 – 1,232 – Investments in property, plant and equipment –1,523 –1,126 Divestments of property, plant and equipment 113 19 –1,410 –1,107 Cash flow from investment activities –178 –1,107
Cash flow from financing activities Proceeds of share issue 5,930 – Buy-back of own shares – –5,600 Drawdown of non-current liabilities (excluding interest-rate swap) 400 5,355 Repayment of non-current liabilities (excluding interest-rate swap) –11,253 –4,580 Cash flow from financing activities –4,923 –4,825
Net cash flow 136 –11
SnowWorld N.V. Annual Report 2013 / 2014 47
2013/2014 2012/2013
Situation cash at 1 October 327 426 Situation credit institutions at 1 October –280 –368 Situation cash and cash equivalents at 1 October 47 58
Net cash flow 136 –11
Situation cash at 30 September 399 327 Situation credit institutions at 30 September –216 –280 Situation cash and cash equivalents at 30 September 183 47 48 SnowWorld N.V. Annual Report 2013 / 2014
Consolidated statement of changes in Group equity
(in € x 1,000)
Share premium Hedge Other Result for the Total Group Issued capital reserve reserve reserves year equity
Situation at 1 October 2012 1,207 10,326 –3,746 –1,915 1,084 6,956
Result for the year – – – – 1,710 1,710 Processing of result from previous year – – 1,084 –1,084 – Buy-back of own shares – –292 – – 5,308 – –5,600 Movement in valuation interest-rate swap – – 847 – – 847
Situation at 30 September 2013 1,207 10,034 –2,899 –6,139 1,710 3,913
Situation at 1 October 2013 1,207 10,034 –2,899 –6,139 1,710 3,913
Result for the year – – – – 386 386 Processing of result from previous year – – – 1,710 –1,710 – Reverse takeover – – – 2,474 – 2,474 Vendor loan – – – –5,000 – –5,000 Proceeds of share issue 2,825 3,201 – – – 6,026 Issue of shares due to reverse takeover 7,031 – – –7,031 – – Costs of share issue – –548 – – – –548 Costs of share options – – – 452 – 452 Movement in valuation interest-rate swap – – –206 – – –206
Situation at 30 September 2014 11,063 12,687 –3,105 –13,534 386 7,497
SnowWorld N.V. Annual Report 2013 / 2014 49
Principles for valuation and determination of the result in the company and consolidated financial statements
General of SnowWorld Leisure N.V. and SnowWorld N.V. will be the same The financial statements of the public limited company SnowWorld from now on (from 1 October to 30 September). The consolidated N.V., with its registered office at Buytenparklaan 30, 2717 AX financial statements of SnowWorld N.V. include the company Zoetermeer, The Netherlands, have been prepared in accordance figures of SnowWorld N.V. from the date of the reverse takeover with the International Financial Reporting Standards as adopted and the consolidated figures of SnowWorld Leisure N.V. from for use within the European Union (EU-IFRS) and with Title 9, 1 October 2013. Book 2 of the Dutch Civil Code (‘BW’). The accounting policies applied are in accordance with the IFRS in force on Since Fornix BioSciences N.V. has not conducted any business 30 September 2014 and rulings of the International Financial activities since 2010 and the business of the combination consists Reporting Interpretation Committee (IFRIC). All figures are shown mainly of the activities of SnowWorld Leisure N.V., only the in thousands of euros, unless otherwise stated. consolidated figures of SnowWorld Leisure N.V. are presented for comparative purposes. These have been adjusted from Dutch References in these financial statements to ‘SnowWorld’ refer to GAAP to IFRS. the SnowWorld Group. Activities On 10 December 2013, Fornix BioSciences N.V., until that time a SnowWorld operates two indoor ski resorts in the Netherlands listed shell company, acquired 100% of the shares of SnowWorld (Zoetermeer and Landgraaf), both of which have various ski Leisure N.V. from J.H.M. Hendriks Beheermaatschappij B.V. for a slopes and food and beverage facilities. Both locations also have sum of € 20,000. Payment was made firstly in 1,875,000 newly a fitness and wellness centre. SnowWorld Landgraaf has a 4-star issued shares in Fornix BioSciences N.V. at a price of € 8 (value hotel and an Outdoor Park as well. € 15,000) and secondly in the form of a vendor loan of € 5,000 provided by J.H.M. Hendriks Beheermaatschappij B.V. Functional currency After this acquisition, the name of Fornix BioSciences N.V. was SnowWorld’s functional currency is the euro. The consolidated changed to SnowWorld N.V. In addition, subsequent to the figures are presented in thousands of euros. acquisition a share split was effected whereby 25 shares in Fornix BioSciences N.V. were exchanged for 1 share in SnowWorld N.V. New and/or amended IFRS in the reporting year During the financial year, SnowWorld has applied the following The acquisition of SnowWorld Leisure N.V. by the listed shell new and changed standards, revisions and amendments and company Fornix BioSciences N.V. is comparable to a reverse IFRIC interpretations relevant to the company, to the extent takeover. However, since a shell company does not qualify as a applicable: IFRS 7 and 13, IAS 1 and 19, and the annual business under IFRS 3, this transaction falls under IFRS 2 ‘Share- improvements to IFRS (published in May 2012). based payments’. Accordingly, the difference between the fair Application of these standards and interpretations had no material value of the issued shares and the shareholder loan and the fair effect on the company’s capital and result. The following value of the assets of SnowWorld N.V. is considered to be the standards and interpretations were issued on the date of cost of the flotation and is charged directly to the result. Since a publication of the financial statements but have not yet taken legal entity is added to the Group as a result of this transaction, effect: IFRS 9, 10, 11 and 12, IFRIC 21 and the annual the transaction is still treated as a reverse takeover for the sake improvements to IFRS (published in December 2013). SnowWorld of convenience and recognised as such in these financial has taken note of the improvements and is currently assessing statements (apart from the obtaining of the flotation). The the implications thereof. consolidated financial statements of SnowWorld N.V. thus in fact represent a continuation of SnowWorld Leisure N.V. Segmentation Under IFRS 8 the establishment of operating segments should be Given the reverse takeover of SnowWorld N.V. (formerly: Fornix based on the organisational and reporting structure of SnowWorld BioSciences N.V.) by SnowWorld Leisure N.V. as of 10 December Leisure N.V. The following segments are recognised on this basis: 2013, whereby SnowWorld is actually a continuation of SnowWorld ski, hospitality, fitness, hotel and outdoor. Segmentation in the Leisure N.V., it was decided to extend the first company financial management information is limited to the categories as stated in year of SnowWorld N.V. from 1 January 2013 to 30 September the segment reporting section in the notes to these financial 2014 (21 months). As a result of this extension, the financial years statements. 50 SnowWorld N.V. Annual Report 2013 / 2014
The geographical segmentation is based on the physical location payments arising from interest, dividends received and tax on of the revenue-generating activities. Internal settlement prices profits are included under cash flow from operating activities. between the different segments are set on a commercial basis Dividends paid are recognised under cash flow from financing in a manner that is similar to that used for third parties. activities. Transactions not involving an exchange of cash are not The accounting policies used for the segmented information are included in the cash flow statement. the same as those used for the consolidated financial statements. Use of estimates and assumptions Consolidation The company makes estimates and assumptions about future The consolidated figures concern the financial data of SnowWorld developments. Estimates in the reporting by definition are almost N.V. and its Group companies as at 30 September of the financial never the same as the actual result. Estimates and assumptions year. Group companies are legal entities and companies over are based on past experience and other factors, including which decisive control is exercised. These policies are moreover expectations of future events that may feasibly occur on the basis applied consistently by the subsidiary company. The financial of the current state of affairs. Estimates and assumptions are statements for Group companies are included in the consolidated continuously assessed. financial statements from the date on which decisive control begins until the date on which this ends. Estimates and assumptions that could lead to material changes to the carrying amounts of assets and liabilities (intangible non- The financial data concern the following companies: current assets and options) during the coming financial year are d SnowWorld N.V. (head of the Group) stated in the notes to the financial statements. d SnowWorld Leisure N.V. (100%-owned) d SnowWorld International B.V. (100%-owned through Principles for the determination SnowWorld Leisure N.V.) of the result Notes to the earnings per share The company presents its earnings per share and total result per General share on the basis of the issued share capital. The item net revenue consists of the proceeds of the provision of Earnings per share is calculated by dividing the result after tax goods and services after deduction of discounts and the like and attributable to shareholders in the company by the weighted value-added tax. average number of ordinary shares in issue during the reporting period and multiplied by the exchange ratio established in the Sale of goods takeover agreement. Income from the sale of goods (mainly concerning revenue from The total result per share is calculated by dividing the total result food and beverage) is recognised in the income statement if all attributable to shareholders in the company by the weighted material entitlements to economic benefits as well as all material average number of ordinary shares in issue during the reporting risks relating to the goods are transferred to the buyer, the period and multiplied by the exchange ratio established in the amount of the income can be reliably determined and receipt of takeover agreement. the income is likely.
The average number of outstanding shares of SnowWorld N.V. in Provision of services the 2013/2014 financial year is 2,587,265. This calculation is If the result of a transaction relating to the provision of a service based on the number of shares issued in the share issue. The can be reliably estimated, the revenue relating to the service is average number of outstanding shares whereby account is taken included in proportion to the realised performance. To the extent of the dilution effect of the options in the 2013/2014 financial year that the services provided (revenue from ski, fitness, hotel and is 2,607,805. outdoor) concern a period longer than one day, these are The average number of outstanding shares in the 2012/2013 attributed proportionally to the period to which they relate. financial year is 55,229,079. This is based on the average number of outstanding shares of SnowWorld Leisure N.V. and is converted Interest into the number of outstanding shares of SnowWorld N.V. Interest income and expense is recognised on a time-proportionate according to an exchange ratio established in the takeover basis in the income statement, taking account of the effective agreement. interest rate of the item in question. The exchange ratio established in the takeover agreement is 22:1. Inter-company transactions For an explanation of the potential dilution for existing Results from transactions with and between Group companies shareholders, see the note on Group equity in the consolidated are fully eliminated. financial statements (15). Costs Notes to the consolidated statement of cash flow Costs are determined taking account of the above-stated The cash flow statement is prepared using the indirect method. accounting policies and allocated to the reporting year to which The cash and cash equivalents item in the cash flow statement they relate. concerns cash after deduction of bank overdrafts. Receipts and SnowWorld N.V. Annual Report 2013 / 2014 51
Principles for the valuation of assets An impairment is recognised whenever the carrying amount of the and liabilities asset or its cash-generating unit exceeds its recoverable value. Impairments are recognised under depreciation and amortisation Intangible non-current assets in the income statement. The positive difference between the cost of acquisition and the fair value of the identifiable assets and liabilities acquired at the time of If in a subsequent period the amount of the impairment declines the transaction is capitalised as goodwill in the statement of and the decline can be objectively related to an event taking place financial position. Goodwill is measured at the cost of acquisition after the impairment was recognised, the previously recognised less cumulative impairments. Goodwill is not amortised. Instead, impairment is reversed and the amount recognised in the income an impairment test is carried out each year. Impairments are statement. recognised under depreciation and amortisation in the income statement. Determination of the recoverable value The recoverable value of an asset or cash-flow generating unit is Property, plant and equipment equal to the sale value less costs of sale, or the value in use if Assets in ownership higher. To determine the value in use, the discounted value of the Property, plant and equipment are measured at the cost of estimated future cash flows is determined on the basis of a acquisition or production less any investment subsidies and after discount factor before tax that reflects both current market deduction of straight-line depreciation or impairment, if applicable. assessments of the time value of money and the specific risks Straight-line depreciation is applied on the basis of the expected associated with the asset. For any asset that does not generate useful economic life of each separate element of property, plant cash flows and which is largely independent of other assets, the and equipment, taking account of the residual value. If the recoverable value is determined on the basis of the cash-generating estimation regarding the total useful economic life changes over unit to which it belongs. time, this is reported as a changed accounting estimate. If items of property, plant and equipment consist of elements with Financial non-current assets different useful economic lives, these are recognised as separate Investments items under property, plant and equipment. Investments over which SnowWorld exercises material influence on commercial and financial policy are measured on the basis of Expenses after initial recognition the equity method. Under this method, the investments are initially SnowWorld recognises the costs of replacing a part of an item of recognised in the statement of financial position at the cost of property, plant or equipment in the carrying amount of the asset acquisition plus the company’s share in the results of the when it is likely that the future economic benefits embodied within investments from the date of acquisition determined according to the asset will flow to SnowWorld and the cost of the asset can be the accounting policies stated in these financial statements. The reliably measured. All other expenses are recognised as costs in share of SnowWorld in the result of investments is shown in the the income statement as they are incurred. income statement. If and to the extent that SnowWorld can not effect distribution of positive results without limitation, the results Assets in production are included in a statutory reserve. The company’s share in the Property, plant and equipment in production concerns preparatory direct increases and reductions of the assets of the investments is costs for any new facilities and/or relevant expansion of existing also included in the statutory reserve. facilities. These items are capitalised as soon as it is likely that the expansions will take place. Depreciation starts after the items are Investments over which SnowWorld does not exercise material taken into operation. influence over financial and commercial policy are measured at the cost of acquisition or the recoverable value if lower (being the value Real estate investments in use or the sale value, whichever is higher). Dividend is recognised Part of the land and buildings owned by SnowWorld is leased to in the income statement under income from investments. third parties. SnowWorld accordingly has real estate investments that generate the item of rental income in the income statement. Inventory The part of the land and buildings in the company’s own use and Inventory consists of trading stock, including hospitality supplies the part that is leased are inextricably linked and therefore not and merchandise, as well as the inventory of equipment for hire. independently saleable. For this reason, no separation has been Inventory is carried at the cost of acquisition or production on the applied within the property, plant and equipment. basis of the ‘first in, first out’ principle. The inventory of equipment for hire is written off over one or two years, depending on the type Impairment of non-current assets of material. The carrying amounts of the company’s assets are re-assessed as at each closing date to determine whether there are indications of Receivables impairment. lf such indication exists, the asset's recoverable value Receivables are initially recognised at fair value and subsequently is estimated. Goodwill, assets with an indeterminate useful life and measured at amortised cost, which is equal to the nominal value intangible assets not yet ready for use are assessed for impairment after deduction of the provision for default risk considered annually. necessary. These provisions are determined on the basis of the individual assessment of the receivables concerned. 52 SnowWorld N.V. Annual Report 2013 / 2014
Cash and cash equivalents In the case of operating leases where the Group is the lessee, the Cash and cash equivalents consist of cash and balances at banks. lease payments are charged to the income statement on a straight- Payables to banks are presented under current liabilities. line basis over the lease period.
Equity Financial risk management Financial instruments issued by the company are treated as equity to the extent they do not qualify as financial assets or liabilities. The shares in the company are classified as equity instruments. Financial instruments General The hedge reserve for financial derivatives relates to the interest- The data in the notes to the financial statements provide rate swap which provide an effective hedge. Changes in the information that is useful for the assessment of the scale of the measurement of these financial derivatives are recognised in this risks associated with financial instruments recognised in the item. statement of financial position.
Provisions Management of financial risks Pensions The principal risks in relation to financial instruments held by the The Group operates a pension scheme for its employees which Group are credit risk, liquidity risk, cash flow risk and price risk, qualifies as a defined contribution scheme. The liabilities of the consisting of interest-rate and market risk. Group are thus limited to the payment of an annual contribution to the insurer. The Group’s policy with respect to the mitigation of these risks is as follows: Tax The company uses derivative financial instruments to hedge its A deferred tax liability is recognised for all temporary differences interest-rate risk. Cash-flow hedge accounting is applied to the subject to taxation. A deferred tax credit is recognised for all extent that these hedging instruments provide an effective hedge deductible temporary differences and available forward carry-over of these risks with respect to liabilities not yet appearing in the losses to the extent that it is likely that taxable profit will be statement of financial position or proposed transactions. The available for deduction. hedging instrument is measured at cost. As long as the hedged item in the cash-flow hedge is not recognised in the statement of The measurement of deferred tax liabilities and assets is based on financial position, the hedging instrument is not revalued. If at any the tax implications of the method of realisation or settlement of time the size of the hedging instrument is greater than the hedged assets, provisions, liabilities or accruals and deferred income position, the ineffective part of the hedge relationship is recognised proposed by SnowWorld as at the closing date. The deferred tax in the income statement. liabilities and assets are carried at nominal value. Financial instruments Tax is calculated on the recognised result, taking account of tax- The Group’s primary financial instruments apart from derivatives exempt items and costs that are entirely or partially non-deductible. are used for the funding of the Group’s operations or arise directly as a consequence thereof. The Group also enters into transactions Non-current liabilities in derivative instruments, in particular an interest-rate swap, to Non-current interest-bearing liabilities are measured at amortised hedge the interest-rate risk arising from the Group’s funding cost using the effective interest method. If applicable, transaction activities. The Group’s policy is to refrain from trading in financial costs are deducted from the nominal amount and subsequently instruments. amortised over the term of the liability. Repayment obligations on non-current liabilities falling due within a year are presented under Realised gains and losses on hedging instruments are recognised the repayment obligation. in the income statement in the same period or periods as those in which the asset acquired affects the income statement. These Current liabilities gains or losses are applied to the initial cost or other carrying Current liabilities are initially measured at fair value and subsequently amount of the asset or liability that arises if the hedged future at amortised cost. transaction occurs.
Leasing Interest-rate risk In cases of financial leases in which the Group is the lessee, the The Group’s non-current liabilities are subject to variable interest, leased item and associated liability on conclusion of the contract whereby the Group is exposed to the risk associated with is recognised in the statement of financial position at the fair value uncertain future cash flows in relation to interest payments. The of the leased item at the time of entering into the lease contract or Group hedges this risk by concluding an interest-rate swap the present value of the minimum lease payments if lower. Part of whereby the Group exchanges variable interest for a fixed interest the regular lease payments are recognised as repayment of rate. liabilities and the remainder as interest paid, both calculated on an annuity basis. SnowWorld N.V. Annual Report 2013 / 2014 53
Market risk If a derivative financial instrument is classified as a hedge against The Group’s market risk is minimal, since the company does not fluctuations in the cash flows from assets, liabilities or projected hold assets for which the measurement depends on movements cash flows with a very high degree of probability, the effective in value of shares or other securities. part of the hedge is recognised in equity via the total result. At such time as the hedge of a forecasted transaction results in a Credit risk financial asset or financial liability, the result that had been A significant proportion of the Group’s sale transactions concern recognised directly in equity is applied to the income statement. cash business to consumer transactions. The Group is exposed To the extent that hedge accounting is applied, the company to credit risk on only a limited proportion of its sale transactions. ensures that the relationship between the derivative financial The Group trades only with creditworthy parties and has instruments and the hedged transaction and the risk management established procedures for the determination of creditworthiness. objectives underlying the use of the derivative financial instruments The Group has moreover established guidelines for limiting its in question are documented. credit risk with each party. Furthermore, the Group continually monitors its receivables and uses a strict reminder procedure. As Derivative financial instruments a result of these measures, the Group’s credit risk is minimal. Derivative financial instruments are recognised at fair value. The There are also no significant concentrations of credit risk within fair value of derivative financial instruments is calculated on the the Group. basis of prices in active markets for similar assets or liabilities or other measurement techniques in which all material input factors Liquidity risk are based on observable market data (level 2). Liquidity risk may occur if the acquisition and implementation of new projects dries up and fewer payments and advance payments Movements in fair value are recognised in net financing expenses are received or if investments place an excessive demand on the if hedge accounting is not applied. Movements in the fair value of available funding and/or the cash flow from operating activities. cash-flow instruments that are administered on the basis of Large fluctuations in the liquidity position are not likely in the hedge accounting are applied to equity via the total result taking short term due to the size of individual transactions. account of applicable taxation. On the expiration date, the result Partly to manage its liquidity risk, the company prepares a of these derivative financial instruments is recognised in the liquidity projection for the coming 12 months on a monthly basis. income statement in relation to the underlying values of the items The analysis of liquidity risk takes account of the available cash, to which these instruments relate. Drawn-down loans are initially the credit facilities and the usual fluctuations in the working recognised at fair value after deduction of transaction costs. capital required. This gives the company sufficient possibility to Subsequently, drawn-down loans are carried at amortised cost; identify any shortfalls at an early stage and take action where any differences between the proceeds (net of transaction costs) possible. and the surrender value are recognised in the determination of the results over the term of the loans using the effective interest Cash flow and interest-rate risk method. At year-end the Group has a contract with respect to an interest- rate swap with an underlying nominal value of € 27,600 Capital management (2012/2013: € 30,800). Under this contract, the Group receives The company’s capital structure consists of its cash. The main the market interest rate equal to Euribor and pays a fixed rate of objective of the company’s capital management is to maintain interest of 3.8% (2012/2013: 3.8%) on the nominal amount. The sound financial ratios in order to support its business activities interest-rate swap serves as a hedge of the interest-rate risk that and maximise shareholder value. the group is exposed to on its long-term loans. The contract has a remaining term to maturity of 8.5 years (2012/2013: The Executive Board monitors the capital structure and makes 9.5 years). The realised results of the interest-rate swap are adjustments in response to changes in economic conditions. In recognised in the income statement. The market value of the the medium to long term, the capital management is designed to interest-rate swap as at 30 September 2014 was € 4,140 negative achieve an adequate result in order to continue the business (2012/2013: € 3,865 negative) and is recognised in the statement activities and to distribute a dividend to the shareholders if this is of financial position under non-current liabilities. possible. No material changes were made to the objectives, guidelines and procedures during the 2013/2014 financial year. Hedge accounting The company uses derivative financial instruments such as The credit facility with ABN AMRO Bank N.V. includes three interest-rate swaps to hedge its cash-flow risk arising from long- financial ratios that have to be met at each year-end. These are: term loans. In accordance with its treasury policy, the company a minimum level of guaranteed assets, a minimum level for the does not hold or enter into derivative financial instruments for debt service capacity ratio and a maximum level for the net debt/ trading purposes. The treatment of movements in the fair value of EBITDA ratio. Any consequences of failure to meet these ratios derivative instruments that qualify for hedge accounting depends will be developed by the bank at such time as a situation of on the nature of the hedged transaction. The fair value of default exists. SnowWorld Leisure N.V. was in compliance with all derivative financial instruments is calculated on the basis of these ratios at year-end. prices in active markets for similar assets or liabilities or other measurement techniques in which all material input factors are based on observable market data (level 2). 54 SnowWorld N.V. Annual Report 2013 / 2014
Notes to the consolidated income statement
(in € x 1,000)
Gross profit (1) The analysis of gross profit by segment is as follows:
Business segments 2013/2014 2012/2013
Revenue ski 8,963 8,791 Revenue material 3,182 3,004 Revenue lessons 1,621 1,524 13,766 13,319 Costs of ski –748 –738 Gross profit ski 13,018 12,581
Revenue hospitality 7,510 7,480 Costs of hospitality –2,397 –2,329 Gross profit hospitality 5,113 5,151
Revenue fitness 1,617 1,772 Costs of fitness –9 –7 Gross profit fitness 1,608 1,765
Revenue hotel 1,609 1,544 Costs of hotel –69 –72 Gross profit hotel 1,540 1,472
Revenue outdoor 530 488 Costs of outdoor – – Gross profit outdoor 530 488
Other revenue 727 775 Costs of other revenue – – Gross profit of other revenue 727 775
Gross profit 22,536 22,232
Geographical segments 2013/2014 2012/2013
Revenue Zoetermeer 9,895 9,628 Costs of revenue Zoetermeer –1,390 –1,343 Gross profit Zoetermeer 8,505 8,285
Revenue Landgraaf 15,864 15,750 Costs of revenue Landgraaf –1,833 –1,803 Gross profit Landgraaf 14,031 13,947
Gross profit 22,536 22,232
SnowWorld N.V. Annual Report 2013 / 2014 55
Other operating income (2) 2013/2014 2012/2013
Rental income from real estate 450 441 Sponsorship income 264 389 Other income 30 28
744 858
Wages and salaries (3) 2013/2014 2012/2013
Wages and salaries 6,786 6,560
Workforce The Group employed an average of 241 employees in 2013/2014 (2012/2013: 238), distributed across the following segments:
2013/2014 2012/2013
Ski 83 84 Hospitality 76 72 Fitness 21 22 Outdoor 6 6 Other 55 54
Total 241 238
The average number of employees at the various locations is as follows:
2013/2014 2012/2013
Zoetermeer 107 101 Landgraaf 134 137
Total 241 238
56 SnowWorld N.V. Annual Report 2013 / 2014
Remuneration of and loans from/to Executive and Supervisory Directors The table below shows the total remuneration of the CEO J.H.M. Hendriks and the CFO W.A. Moerman in the financial year:
Short-term Payment in kind Long-term Share- employee and expenses employee based benefit reimbursed benefit payments Total
2013/2014 J.H.M. Hendriks (CEO) 280 40 – – 320 W.A. Moerman (CFO) 132 26 10 111 279
Total 412 66 10 111 599
2012/2013 J.H.M. Hendriks (CEO) 394 43 – – 437 W.A. Moerman (CFO) 130 26 10 – 166
Total 524 69 10 – 603
No payments on dismissal or termination of employment have been made or agreed.
The Executive Director J.H.M. Hendriks retains his shareholding in the Group via J.H.M. Hendriks Beheermaatschappij B.V. The short-term employee benefit to J.H.M. Hendriks concerns a management fee paid by SnowWorld to J.H.M. Hendriks Beheermaatschappij B.V. SnowWorld N.V. has reimbursed interest on outstanding loans and a current account facility of € 3,715 (2012/2013: € 661) to J.H.M. Hendriks Beheermaatschappij B.V. in the amount of € 187 (2012/2013: € 10). The Executive Director J.H.M. Hendriks has paid interest on the outstanding current account facility of € – (2012/2013: € 61) in an amount of € – (2012/2013: € 3).
An option to acquire shares has been vested to W.A. Moerman. For an explanation of the vested option scheme, see the note on Group equity in the consolidated financial statements (15).
The total remuneration of the Supervisory Directors in the financial year is shown in the table below:
2013/2014 2012/2013
A.J. Bakker (chairman) 15 – B.K. Mentel 11 –
Total 26 –
These Supervisory Directors do not hold shares in the company.
Social insurance payment (4) 2013/2014 2012/2013
Pension costs 155 196 Other social contributions 1,054 964
1,209 1,160
SnowWorld N.V. Annual Report 2013 / 2014 57
Depreciation of property, plant and equipment (5) 2013/2014 2012/2013
Property, plant and equipment 3,462 3,923
Other operating expenses (6) 2013/2014 2012/2013
Premises costs 3,893 4,028 Costs of reverse takeover 1,437 – Other employee expenses 1,021 891 Sales expenses 988 859 Vehicle expenses 193 207 Office expenses 369 385 General expenses 614 458
8,515 6,828
Application of the International Financial Reporting Standards has led to an accounting expense item for the reverse takeover and the issue of the new shares (reported above under ‘Costs of reverse takeover’) in the amount of € 1,914. € 1,381 of this amount is attributed to the result after tax, the remainder has been deducted from the proceeds of the issue as a direct movement in equity. Of these total expenses, the actual outgoing cash flow amounts to € 347.
The item ‘General expenses’ includes audit fees to BDO Audit & Assurance B.V., which pursuant to Section 382a Book 2 BW can be specified as follows:
2013/2014 2012/2013
Audit of financial statements for the year 70 38 Audit of financial statements for previous year (fees in arrears) 18 – Audit related fees 65 –
Total 153 38
Financial income and expenses (7) 2013/2014 2012/2013
Interest on credit facility ABN AMRO (fixed through interest-rate swap) 1,063 1,201 Interest on credit facility ABN AMRO (variable) 919 973 Interest on financial lease 69 68 Interest on loan Whitecourt Sarl 50 36 Interest to shareholder 187 6 Other interest and bank charges –3 59
2,285 2,343
58 SnowWorld N.V. Annual Report 2013 / 2014
The interest-rate exposure of the non-current liabilities at variable interest rates and debts to credit institutions, plus the valuation risk profile of the interest-rate swap in case of increases or decreases in interest rates is as follows:
2013/2014 2012/2013
Non-current liabilities (including current part) 9,292 11,636 Debts to credit institutions 216 280 Interest-rate swap 4,140 3,865
Net effect on income statement of: 1.0% increase in interest rates –71 –119 1.0% decrease in interest rates 71 119
Net effect on Group equity of: 1.0% increase in interest rates 784 973 1.0% decrease in interest rates –784 –973
Tax (8) The tax payable on the result in the consolidated income statement consists of the following:
2013/2014 2012/2013
Corporate income tax payable on the taxable result in the year 705 378 Movement in deferred taxation (excluding interest-rate swap) –62 201 Adjustments relating to taxation in previous years –6 –13
Total tax expense 637 566
The reconciliation of the effective tax rate with the tax rate applicable to the consolidated financial statements is as follows:
(in percent) 2013/2014 2012/2013
Applicable rate –25.0 –25.0 Rate advantage 1st tax bracket 0.9 0.4 Non-deductible part of costs of reverse takeover –29.5 – Non-deductible loss SnowWorld N.V. –5.1 – Non-deductible part of costs of employee options –2.7 – Adjustments relating to taxation in previous years 0.6 0.6 Non-deductible costs –0.9 –0.9 Other effects –0.6 –
Effective rate –62.3 –24.9
SnowWorld N.V. Annual Report 2013 / 2014 59
The relationship between the commercial result and the result for tax purposes before tax is shown below:
2013/2014 2012/2013
Commercial result before tax 1,023 2,276 Non-deductible part of costs of reverse takeover 1,208 – Non-deductible loss SnowWorld N.V. 210 – Non-deductible part of costs of employee options 111 – Deductible flotation costs applied to Group equity –92 – Higher amortisation of intangible non-current assets for tax purposes –149 –149 Lower or higher depreciation of property, plant and equipment for tax purposes 970 –247 Higher costs/lower investments for tax purposes –211 –162 Contribution to maintenance provision for tax purposes –248 –248 Non-deductible costs 37 83 Other effects –1 –
Taxable result before tax 2,858 1,553
60 SnowWorld N.V. Annual Report 2013 / 2014
Notes to the consolidated statement of financial position
(in € x 1,000)
Intangible non-current assets (9) 2013/2014 2012/2013
Goodwill 1,044 1,044
The development of this item is as follows:
Goodwill
Carrying amount at 1 October 2012 1,044
Investments – Amortisation –
Carrying amount at 30 September 2013 1,044
Carrying amount at 1 October 2013 1,044
Investments – Amortisation –
Carrying amount at 30 September 2014 1,044
The goodwill relates to the activities of the fitness centres of Special Sports in Zoetermeer and Landgraaf acquired on 1 October 2007. The goodwill initially amounted to € 1,490 and is amortised over a period of three years to € 1,044 as at 30 September 2010 (based on an estimated economic life of 10 years). No further amortisation has been applied since 1 October 2010 due to the system change to IFRS.
An assessment was carried out to determine whether an impairment of the capitalised goodwill needs to be recognised as of the closing date. A valuation of the fitness activities was carried out on the basis of the discounted cash-flow method. Under this method, the cash flows expected on the basis of the business plan for the next five years are discounted using the WACC (weighted average cost of capital) and taking account of expected inflation and an expected growth percentage.
The WACC is established at 10.0% (2012/2013: 9.0%). The WACC is calculated on the basis of a weighted average (in the ratio of 40/60) of an average return on equity and the costs of loan capital. An average return on equity of 17.2% consists of a market return of 6.0% multiplied by a factor of 2.2 (based on a median of a group of comparable capital-intensive companies) and increased by a free risk surcharge of 2.0% (based on the yield of Dutch 10-year government debt). The costs of loan capital of 3.2% consist of a free risk percentage of 2.2% (based on the yield of Dutch 10-year government debt) plus a surcharge of 2.3% (estimated on the basis of the spreads between bonds rated BBB-\BB+ by S&P and Dutch 10-year government bonds) and taking account of a corporate income tax rate of 25.0%. The weighting factor of 40/60 is based on the ratio of equity to loan capital of a group of comparable capital-intensive companies and is also in line with SnowWorld’s objectives. SnowWorld N.V. Annual Report 2013 / 2014 61
The sensitivity to changes in WACC of the present value of the future cash flows from the fitness activities is shown in the table below.
2013/2014 2012/2013
WACC 10.0% (2012/2013: 9.0%) 1,314 1,429 WACC 11.0% (2012/2013: 10.0%) 1,163 1,283 WACC 12.0% (2012/2013: 11.0%) 1,039 1,165 WACC 13.0% (2012/2013: 12.0%) 934 1,066 WACC 14.0% (2012/2013: 13.0%) 845 983
Property, plant and equipment (10) 2013/2014 2012/2013
Land and buildings 49,038 51,231 Machinery and installations 112 221 Other equipment 2,321 2,415 Assets in production 1,586 1,242
53,057 55,109
62 SnowWorld N.V. Annual Report 2013 / 2014
The development of this item is as follows:
Land and Machinery and Other Assets buildings installations equipment in production Total
Cumulative acquisition value at 1 October 2012 79,994 2,640 20,516 1,134 104,284 Cumulative depreciation and impairments at 1 October 2012 –26,491 –2,246 –17,613 –10 –46,360 Carrying amount at 1 October 2012 53,503 394 2,903 1,124 57,924
Investments 276 5 728 118 1,127 Divestments – – –19 – –19 Depreciation –2,548 –178 –1,197 – –3,923 51,231 221 2,415 1,242 55,109
Cumulative acquisition value at 30 September 2013 80,270 2,645 17,882 1,252 102,049 Cumulative depreciation and impairments at 30 September 2013 –29,039 –2,424 –15,467 –10 –46,940
Carrying amount at 30 September 2013 51,231 221 2,415 1,242 55,109
Carrying amount at 1 October 2013 51,231 221 2,415 1,242 55,109
Investments 223 13 943 344 1,523 Divestments – – –113 – –113 Depreciation –2,416 –122 –924 – –3,462 49,038 112 2,321 1,586 53,057
Cumulative acquisition value at 30 September 2014 80,492 2,658 18,656 1,596 103,402 Cumulative depreciation and impairments at 30 September 2014 –31,454 –2,546 –16,335 –10 –50,345
Carrying amount at 30 September 2014 49,038 112 2,321 1,586 53,057
Depreciation is applied to property, plant and equipment as follows: d No depreciation is applied to land and assets in production. d Buildings are written off on a straight-line basis over the estimated economic life of 5 to 40 years. d Other property, plant and equipment is written off on a straight-line basis over the estimated economic life of 5 to 10 years.
Land and buildings are measured at historical cost after deduction of straight-line depreciation based on estimated economic life. The current value of the land and buildings is approximately € 76,683 (2012/2013: € 65,305). The current value of the other property, plant and equipment does not materially differ from the carrying amount. SnowWorld N.V. Annual Report 2013 / 2014 63
The Group has economic (but not legal) ownership of various assets with a total carrying amount of € 1,081 (2012/2013: € 1,537) through financial lease contracts. For further information on these contracts, please refer to the note on financial leases.
The item land and buildings includes € 200 in capitalised interest (2012/2013: € 206).
Land and buildings with a carrying amount of € 49,038 (2012/2013: € 51,231) are mortgaged to credit institutions. A right of pledge on the movable property, plant and equipment is held by the bank.
The item property, plant and equipment in production of € 1,586 concerns the expenses associated with the preparation of the new locations in Paris and Barcelona together with the extension of the third ski slope in Zoetermeer. Depreciation starts after the items are taken into operation.
Financial non-current assets (11) 2013/2014 2012/2013
Deferred tax 180 49
The development of the deferred tax is as follows:
Deferred tax
Carrying amount at 1 October 2012 532
Movement due to higher amortisation for tax purposes –98 Movement due to lower investment for tax purposes –41 Movement due to tax provisions –62 Movement due to revaluation of interest-rate swap –282
Carrying amount at 30 September 2013 49
Carrying amount at 1 October 2013 49
Movement due to higher amortisation for tax purposes 171 Movement due to lower investment for tax purposes –53 Movement due to tax provisions –62 Movement due to revaluation of interest-rate swap 69 Other changes 6
Carrying amount at 30 September 2014 180 of which term to maturity < 1 year –125 term to maturity > 1 year < 5 years –193 term to maturity > 5 years 498 64 SnowWorld N.V. Annual Report 2013 / 2014
The development of the valuation differences is as follows:
Property, Provision for large- Interest-rate plant and equipment Goodwill scale maintenance swap Total
Carrying amount at 1 October 2012 50 –298 –2,616 4,994 2,130
Contribution –248 –248 Valuation difference – – – –1,129 –1,129 Investment difference –165 – – – –165 Depreciation and amortisation difference –244 –149 – – –393
Carrying amount at 30 September 2013 –359 –447 –2,864 3,865 195
Carrying amount at 1 October 2013 –359 –447 –2,864 3,865 195
Contribution –248 –248 Valuation difference – – – 275 275 Investment difference –211 – – – –211 Depreciation and amortisation difference 833 –149 – – 684 Other changes 25 – – – 25
Carrying amount at 30 September 2014 288 –596 –3,112 4,140 720
The relationship with the tax expense in the income statement is as follows:
2013/2014 2012/2013
Movement in valuation differences during the year (excluding interest-rate swap) 250 –806 Corporate income tax on this included in tax expense (8) 62 –201
Inventory (12) 2013/2014 2012/2013
Trading goods 137 132 Equipment for hire 175 266
312 398
A right of pledge on the inventory is held by the bank.
Accounts receivable (13) 2013/2014 2012/2013
Trade receivables 551 513 Receivable from shareholder – 13 Tax and social insurance contributions 69 51 Other receivables, accrued income and prepaid expenses 368 363
988 940
SnowWorld N.V. Annual Report 2013 / 2014 65
A right of pledge on the trade receivables is held by the bank.
The provision for debtor default of € 31 (2012/2013: € –) has been deducted from the ‘Trade receivables’ item.
The age of debtor receivables overdue and unforeseen debtor items as per balance sheet date is as follows:
0-2 months 2-5 months 5-12 months Total
2013/2014 68 21 18 107 2012/2013 38 131 15 184
The receivable from shareholder is subject to interest of 6.0% (2012/2013: 6.0%).
The analysis of the item ‘Tax and social insurance contributions’ is as follows:
2013/2014 2012/2013
VAT 64 51 Pensions 5 –
69 51
The analysis of the item ‘Other receivables, accrued income and prepaid expenses’ is as follows:
2013/2014 2012/2013
Prepaid costs 225 139 Stock of ski passes 20 14 Revenues not yet invoiced 123 175 Other receivables – 35
368 363
The nominal value of the other receivables, accrued income and prepaid expenses does not differ materially from the values stated in this note.
Cash and cash equivalents (14) 2013/2014 2012/2013
Cash 120 145 Bank 56 21 Suspense account items 223 161
399 327
There are no material limitations regarding the availability of cash balances. These are freely available.
With respect to the security relating to the ‘Bank’ balance, see the note on non-current liabilities (16). 66 SnowWorld N.V. Annual Report 2013 / 2014
Group equity (15) For the development of the separate items consolidated within Group equity, see the ‘Consolidated statement of changes in Group equity’.
Paid-up and called-up share capital For an explanation of the paid-up and called-up share capital, see the note on equity in the company financial statements (22).
Option schemes SnowWorld operates two option schemes that could result in a change of control of SnowWorld due to their taking effect at a later date.
The first scheme concerns options on shares vested to Mr W.A. Moerman (CFO), whereby SnowWorld grants an irrevocable and non-transferable right for a term of five years starting on 1 December 2013 to acquire full and unencumbered ownership of shares with a nominal value of € 3.75 at an exercise price of € 8 per share. This option concerns 147,508 shares. Delivery may be made by purchase or issue. In the event of repayment of capital (capital reduction), special dividend distributions (dividend not charged to earnings) and/or a share split, the option will be adjusted in accordance with generally accepted standards in such cases. The shares acquired on the basis of the option agreement will have all the same rights associated with them as the ordinary shares already in issue.
The option may be exercised in five equal annual steps from 1 December 2013. The option may be exercised in full or in part during the term to maturity. If the option is not exercised or not fully exercised within the term to maturity, it will lapse legally after expiration of the term to maturity. If the option is fully exercised within the term to maturity, the share ownership of the existing shareholders will be diluted by approximately 4.8%.
The costs related to the option for the 2013/2014 financial year of € 111 are recognised under wages and salaries in the income statement.
The second scheme concerns an option on shares vested to Value8 N.V. whereby SnowWorld grants an irrevocable and non-transferable right for a term of five years starting on 1 December 2013 to acquire full and unencumbered ownership of shares with a nominal value of € 3.75 at an exercise price of € 8 per share. This option concerns 5.0% of the issued shares on the date of exercise. Also in the event that SnowWorld issues shares due to the exercise of the option, after such issue Value8 N.V. will acquire 5.0% of the then outstanding capital. Delivery may be made by purchase or issue. In the event of repayment of capital (capital reduction), special dividend distributions (dividend not charged to earnings) and/or a share split, the option will be adjusted in accordance with generally accepted standards in such cases. The shares acquired on the basis of the option agreement will have all the same rights associated with them as the ordinary shares already in issue.
The option may be exercised in full or in part during the term to maturity. If the option is not exercised or not fully exercised within the term to maturity, it will lapse legally after expiration of the term to maturity. Value8 N.V. will then no longer have any rights with respect to the option. If the option is fully exercised within the term to maturity, the share ownership of the existing shareholders will be diluted by 5.0%.
The costs associated with the option in the 2013/2014 financial year amount to € 370. € 106 of this amount is recognised in Group equity, with the remaining € 264 recognised under other operating expenses in the income statement.
The fair value of both options has been calculated by an expert using the ‘Black-Scholes-Merton’ formula. SnowWorld N.V. Annual Report 2013 / 2014 67
The variables in this formula are as follows: Moerman Value8
Underlying value € 8 € 8 Strike price € 8 € 8 Implied volatility 30% 35% Risk-free interest rate 0.3% 0.6% Time to maturity (in years) 3.4 5.0 Expected dividend yield 2.5% 4.0%
The implied volatility is based on the observed median daily price of the share over a historical period equal to the expected life against a select group of companies considered to be comparable to SnowWorld.
The risk-free interest rate is based on the average effective yield of German government bonds during a term equal to the life of the options.
The costs of equity are determined using the Capital Asset Pricing Model. The costs of equity are established at 14.5%.
Share premium reserve As a result of the share issue of 753,255 shares at an issue price of € 8 on 19 February 2014 and taking account of transaction costs, the share premium reserve has risen by € 2,653 to € 12,687.
Hedge reserve The hedge reserve concerns the valuation of the interest-rate swap under non-current liabilities. The revaluation takes account of the effect of taxation on the equity and result by the formation of a provision for deferred taxation charged to the hedge reserve. See the note on taxation.
Earnings per share The company presents its earnings per share and total result per share on the basis of the issued share capital.
Earnings per share is calculated by dividing the result after tax attributable to shareholders in the company by the weighted average number of ordinary shares in issue during the reporting period and multiplied by the exchange ratio established in the takeover agreement. The total result per share is calculated by dividing the total result attributable to shareholders in the company by the weighted average number of ordinary shares in issue during the reporting period and multiplied by the exchange ratio established in the takeover agreement.
The average number of outstanding shares of SnowWorld N.V. in the 2013/2014 financial year is 2,587,265. This calculation is based on the number of shares issued in the share issue. The average number of outstanding shares whereby account is taken of the dilution effect of the options in the 2013/2014 financial year is 2,607,805. The average number of outstanding shares in the 2012/2013 financial year is 55,229,079. This is based on the average number of outstanding shares of SnowWorld Leisure N.V. and is converted into the number of outstanding shares of SnowWorld N.V. according to an exchange ratio established in the takeover agreement. The exchange ratio established in the takeover agreement is 22:1.
A note on the potential dilution for existing shareholders is included above. 68 SnowWorld N.V. Annual Report 2013 / 2014
Non-current liabilities (16)
2013/2014 Interest % > 5 years > 1 year Total
Credit institutions 5.5 13,437 16,955 30,392 Interest-rate swap* – 4,140 – 4,140 Loan Whitecourt Sarl 6.0 – 358 358 Loans shareholder 5.3 148 3,400 3,548 Financial leasing obligations 4.5 – 843 843 Discount received in advance – – 65 65
17,725 21,621 39,346
2012/2013 Interest % > 5 years > 1 year Total
Credit institutions 5.2 19,486 18,955 38,441 Interest-rate swap* – 3,865 – 3,865 Loan Whitecourt Sarl 6.0 – 448 448 Loan shareholder 6.0 212 400 612 Financial leasing obligations 4.7 – 1,032 1,032 Discount received in advance – – 132 132
23,563 20,967 44,530
*) A breakdown of the interest-rate swap has been omitted since this cannot be reliably established.
Non-current liabilities with a remaining term to maturity of less than one year (including the repayment obligation for the coming year), are recognised under current liabilities.
The maturity dates of the mandatory interest payments and current liabilities as at 30 September 2014 can be shown as follows:
< 1 year > 1 year > 5 years Total
Interest obligations 1,055 2,496 550 4,101 Current liabilities 4,275 – – 4,275 Interest-rate swap 988 2,736 813 4,537
For an explanation of the interest-rate risk profile of the non-current liabilities at variable interest rates and debts to credit institutions and the measurement risk profile of the interest-rate swap in the event of increases or decreases in interest rates, see the note on financial income and expenses (7). SnowWorld N.V. Annual Report 2013 / 2014 69
Credit institutions SnowWorld Leisure N.V. renewed its credit facility with ABN AMRO Bank N.V. in March 2014.
Firstly, SnowWorld Leisure N.V. has a current account facility available of € 29,875 as at 30 September 2014. The repayment for this in the coming financial year is € 3,000. For the 2015/2016 financial year, the repayment is € 3,438. From 1 January 2017 the annual repayment will be € 3,500. The interest (including liquidity premium) is 2.1% above the 1-month Euribor rate.
Secondly, SnowWorld Leisure N.V. has a 4-year loan on a roll-over basis of € 4,063 as at 30 September 2014. The repayment for this in the coming financial year is € 500. The remaining € 3,000 will be repaid in full as at 1 January 2017. The interest (including liquidity premium) is 5.0% above the 1-month Euribor rate.
The security provided for these two facilities is as follows: d A bank mortgage, ranked first, of € 79,400 on the unencumbered property subject to registration: Buytenparklaan 30, 2717 AX Zoetermeer, The Netherlands, section C number 5654 and Witte Wereld 1, 6372 VG Landgraaf, The Netherlands, section C numbers 896, 906 and 907 (partially). d Pledge of all assets with the exception of a number of pistenbullies, various fitness equipment, a vehicle, a tracked dumper truck and part of the Outdoor Park. d Subordination of the receivable of Whitecourt Sarl on the company of € 477. d Subordination of the receivable of J.H.M. Hendriks Beheermaatschappij B.V. on the company of € 600.
The credit facility with ABN AMRO Bank N.V. includes three financial ratios that have to be met at each year-end. These are: a minimum level of guaranteed assets, a minimum level for the debt service capacity ratio and a maximum level for the net debt/EBITDA ratio. Any consequences of failure to meet these ratios will be developed by the bank at such time as a situation of default exists. SnowWorld Leisure N.V. was in compliance with all ratios at year-end.
The intention of both parties is to hold the credit facility until maturity, which is also reflected in the financial statements.
The Group has concluded an interest-rate swap for a large proportion of its non-current liabilities to credit institutions whereby its interest-rate risk is significantly reduced. The average interest rate (including liquidity premium) payable on the non-current liabilities to credit institutions is 5.5%. For further information, see the note on financial instruments.
Interest-rate swap At year-end the Group has a contract with respect to an interest-rate swap with an underlying nominal value of € 27,600 (2012/2013: € 30,800). Under this contract, the Group receives the market interest rate equal to Euribor and pays a fixed rate of interest of 3.8% (2012/2013: 3.8%) on the nominal amount. The interest-rate swap serves as a hedge of the interest-rate risk that the Group is exposed to on its long-term loans. The contract has a remaining term to maturity of 8.5 years (2012/2013: 9.5 years). The realised results of the interest-rate swap are recognised in the income statement. The market value of the interest-rate swap as at 30 September 2014 was € 4,140 negative (2012/2013: € 3,865 negative).
Loan Whitecourt Sarl The loan from Whitecourt Sarl concerns a subordinated loan with an original principal amount of € 597 and subject to interest of 6.0%. The loan is subordinated to the receivables of ABN AMRO Bank N.V. The loan will be repaid in five equal annual instalments commencing on 1 April 2014. The company has the right to repay the loan at an earlier date. 70 SnowWorld N.V. Annual Report 2013 / 2014
Loan(s) shareholder There are two loans from the shareholder. The first is a subordinated loan from J.H.M. Hendriks Beheermaatschappij B.V. with an original principal amount of € 600 and subject to interest of 6.0%. The loan is subordinated to the receivables of ABN AMRO Bank N.V. The loan will be repaid in six equal annual instalments commencing on 1 October 2014. The company has the right to repay the loan at an earlier date, subject to prior permission from ABN AMRO Bank N.V. The interest on the loan is credited annually. The second is the vendor loan provided by J.H.M. Hendriks Beheermaatschappij B.V. on the occasion of the reverse takeover. This vendor loan with an original principal of € 5,000 has to be repaid by 10 December 2016. The interest due is 1-month Euribor plus a risk surcharge of 5.0%, payable annually in arrears. The lender has been granted a right of pledge on up to 25.0% of the shares of SnowWorld Leisure N.V. as security.
Financial leasing obligations The financial leasing obligations relate to the financing of various assets with a total carrying amount of € 1,081 (2012/2013: € 1,537). The remaining weighted average term to maturity is approximately 2 years (2012/2013: 3 years). The weighted average interest rate is 4.5% (2012/2013: 4.7%).
Discount received in advance A supplier has paid a discount in advance for the funding of the renovation of a food and beverage facility. The Group has undertaken a remaining obligation to purchase amounting to € 3,473 over a remaining term to maturity of at least 1.5 years with an overrun of up to 3.5 years. If this obligation is not met, the discount has to be repaid pro rata. No interest is due.
Current liabilities (17) 2013/2014 2012/2013
Repayment obligation on non-current liabilities 4,275 4,669 Debts to credit institutions 216 280 Payable to suppliers and trading credits 1,420 1,627 Payable to shareholder 67 – Tax and social insurance contributions 842 472 Other payables and accruals 2,317 2,376
9,137 9,424
The analysis of the item ‘Repayment obligation on non-current liabilities’ is as follows:
2013/2014 2012/2013
Credit institutions 3,500 3,995 Loan Whitecourt Sarl 119 149 Loan Heineken – 76 Loan shareholder 100 – Financial leasing obligations 498 399 Discount received in advance 58 50
4,275 4,669
SnowWorld Leisure N.V. has a multi-purpose facility of € 750 at ABN AMRO Bank N.V. as at 30 September 2014. Further details on the security provided are given in the note on non-current liabilities (16).
The ‘Payable to shareholder’ item is subject to 6.0% interest. SnowWorld N.V. Annual Report 2013 / 2014 71
The analysis of the item ‘Tax and social insurance contributions’ is as follows:
2013/2014 2012/2013
Payroll tax and social insurance contributions 191 166 Corporate income tax 618 282 Pensions – 5 Tourist tax 33 19
842 472
The analysis of the item ‘Other payables and accruals’ is as follows:
2013/2014 2012/2013
Expenses due 295 537 Net revenue received in advance 805 788 Interest due 410 360 Reserve for vacation allowance and days 314 264 Net salaries 219 149 Guarantees 112 116 Other liabilities 162 162
2,317 2,376
72 SnowWorld N.V. Annual Report 2013 / 2014
Commitments not appearing in the statement of financial position (in € x 1,000)
Operational lease – Group as lessee The Group has concluded operational lease contracts for vehicles. The future lease payments are specified as follows:
2013/2014 2012/2013 period < 1 year 80 74 1 year > period < 5 years 86 69 period > 5 years – –
Total 166 143
No contractual agreements have been made regarding any options to extend or purchase.
Assets on order At year-end, the Group had assets on order amounting to € 228 that are not shown in the statement of financial position (2012/2013: € 589).
Purchase contracts At the closing date the Group had concluded various purchase contracts for the supply of energy with a term until 31 December 2017 that set a fixed price per kWh of electricity on the basis of estimated consumption. The total contract value over this period is € 3,286. It should be noted that this contract value represents only part of the total energy costs.
Tax group Since 1 October 2014 SnowWorld N.V. is jointly and severally liable for the tax obligations with respect to corporate income tax of its Group companies that form part of the tax group. SnowWorld N.V. Annual Report 2013 / 2014 73
Company income statement
(in € x 1,000)
2013/2014 2012
Share in result of investments (18) 465 – Company result after tax –658 83
Result after tax –193 83
74 SnowWorld N.V. Annual Report 2013 / 2014
Company statement of financial position
(before profit appropriation, in € x 1,000)
Assets 30 September 2014 31 December 2012
Non-current assets
Financial non-current assets (19) • Investments in Group companies 10,530 –
Current assets
Accounts receivable (20) • Receivables on Group companies 129 – • Tax and social insurance contributions 4 81 • Other receivables, accrued income and prepaid expenses 1 94 134 175
Cash and cash equivalents (21) 39 1,232
Total assets 10,703 1,407
SnowWorld N.V. Annual Report 2013 / 2014 75
Equity and liabilities 30 September 2014 31 December 2012
Equity (22) Paid-up and called-up share capital 11,063 1,207 Share premium reserve 11,046 69 Hedge reserve –137 – Other reserves –14,282 – Result for the year –193 83 7,497 1,359
Non-current liabilities (23) 3,000 –
Current liabilities (24) Payable to suppliers and trading credits – 9 Other payables and accruals 206 39 206 48
Total equity and liabilities 10,703 1,407
76 SnowWorld N.V. Annual Report 2013 / 2014
Company statement of changes in equity
(in € x 1,000)
Issued Share premium Hedge Other Result for Total capital reserve reserve reserves the year equity
Situation at 1 January 2012 1,207 3,526 – – 177 4,910
Result for the year – – – – 83 83 Processing of result from previous year – – – 177 –177 – Dividend paid in 2012 – –3,457 – –177 – –3,634
Situation at 31 December 2012 1,207 69 – – 83 1,359
Situation at 1 January 2013 1,207 69 – – 83 1,359
Result for the year – – – – –193 –193 Processing of result from previous year – – – 83 –83 – Reverse takeover 7,031 7,969 – –14,817 – 183 Proceeds of share issue 2,825 3,201 – – – 6,026 Costs of share issue – –193 – – – –193 Costs of share options – – – 452 – 452 Movement in valuation interest-rate swap – – –137 – – –137
Situation at 30 September 2014 11,063 11,046 –137 –14,282 –193 7,497
SnowWorld N.V. Annual Report 2013 / 2014 77
Notes to the company income statement
(in € x 1,000)
General The company result for the year does not correspond to the consolidated result due to the recognition of the reverse takeover. The difference can be shown as follows:
2013/2014
Company result after tax –193
Result of SnowWorld Leisure N.V. until date of reverse takeover 452 Negative result of SnowWorld N.V. until date of reverse takeover 127
Consolidated result after tax 386
Share in result of investments (18) 2013/2014 2012
Share in result of SnowWorld Leisure N.V. 465 –
78 SnowWorld N.V. Annual Report 2013 / 2014
Notes to the company statement of financial position
(in € x 1,000)
General The company financial statements are prepared in accordance with the International Financial Reporting Standards as adopted for use within the European Union (EU-IFRS) and with Title 9, Book 2 BW. The accounting policies applied are in accordance with the IFRS in force on 30 September 2014 and rulings of the International Financial Reporting Interpretation Committee (IFRIC). For an explanation of the separate policies for the valuation of assets and liabilities and the determination of the result, see the accounting policies for the consolidated financial statements.
Given the reverse takeover of SnowWorld N.V. (formerly: Fornix BioSciences N.V.) by SnowWorld Leisure N.V. as of 10 December 2013, whereby SnowWorld is actually a continuation of SnowWorld Leisure N.V., it was decided to extend the first company financial year of SnowWorld N.V. from 1 January 2013 to 30 September 2014 (21 months). The consolidated financial statements of SnowWorld N.V. include the company figures of SnowWorld N.V. from the date of the reverse takeover and the consolidated figures of SnowWorld Leisure N.V. from 1 October 2013.
Financial non-current assets (19) 2013/2014 2012
Investment in SnowWorld Leisure N.V. 10,530 –
The development of this item was as follows: SnowWorld Leisure N.V. Carrying amount at 1 January 2012 –
Result from investment –
Carrying amount at 31 December 2012 –
Carrying amount at 1 January 2013 –
Purchase of investment 5,183 Share premium payment 5,000 Movement in equity of investment due to: • Costs of reverse takeover –69 • Interest-rate swap –137 • Costs of employee options 88 Result from investment 465
Carrying amount at 30 September 2014 10,530
Accounts receivable (20) 2013/2014 2012
Receivables on Group companies 129 – Tax and social insurance contributions 4 81 Other receivables, accrued income and prepaid expenses 1 94
134 175
SnowWorld N.V. Annual Report 2013 / 2014 79
The analysis of the item ‘Receivables from Group companies’ is as follows:
2013/2014 2012
Receivables on SnowWorld Leisure N.V. 129 –
The analysis of the item ‘Tax and social insurance contributions’ is as follows:
2013/2014 2012
VAT 4 7 Corporate income tax – 74
4 81
The analysis of the item ‘Other receivables, accrued income and prepaid expenses’ is as follows:
2013/2014 2012
Prepaid costs 1 11 Other receivables – 83
1 94
Cash and cash equivalents (21) 2013/2014 2012
Bank 39 1,232
There are no material limitations regarding the availability of cash balances. These are freely available.
Equity (22) For the development of the separate company items within equity, see the ‘Company statement of changes in equity’.
Paid-up and called-up share capital The authorised share capital of SnowWorld N.V. stands at € 41,192, divided into 10,984,535 shares with a nominal value of € 3.75. There are 2,950,163 shares in issue.
Until 10 December 2013, SnowWorld N.V. (formerly Fornix BioSciences N.V.) had 8,047,688 shares with a nominal value of € 0.15. As a result of a reverse split on 10 December 2013, this is reduced by a factor of 25: 321,908 shares with a nominal value of € 3.75. As a result of the issue of 1,875,000 shares in connection with the reverse takeover of SnowWorld on 10 December 2013 and the share issue of 19 February 2014 (753,255) the number of outstanding shares as at 30 September 2014 was 2,950,163.
80 SnowWorld N.V. Annual Report 2013 / 2014
The authorised share capital together with the issued and fully paid-up capital as at year-end is as follows:
2013/2014 2012 2011
Authorised share capital 41,192 3,900 3,900 Issued and fully paid-up capital 11,063 1,207 1,207
Share premium reserve Due to the issue of 1,875,000 new shares at an issue price of € 8 on 10 December 2013 and the share issue of 753,255 shares at an issue price of € 8 as at 19 February 2014, the share premium reserve has, after deduction of transaction costs, risen by € 10,977 to € 11,046.
Non-current liabilities (23) 2013/2014 Interest % > 5 years > 1 year Total
Loan shareholder 5.1 – 3,000 3,000
Loan shareholder This item concerns the vendor loan provided by J.H.M. Hendriks Beheermaatschappij B.V. on the occasion of the reverse takeover. This vendor loan with an original principal of € 5,000 has to be repaid by 10 December 2016. The interest due is 1-month Euribor plus a risk surcharge of 5.0%, payable annually in arrears. The lender has been granted a right of pledge on up to 25.0% of the shares of SnowWorld Leisure N.V. as security.
Current liabilities (24) 2013/2014 2012
Payable to suppliers and trading credits – 9 Other payables and accruals 206 39
206 48
The analysis of the item ‘Other payables and accruals’ is as follows:
2013/2014 2012
Expenses due 63 39 Interest due 143 –
206 39
SnowWorld N.V. Annual Report 2013 / 2014 81
Commitments not appearing in the statement of financial position
There are no commitments not appearing in the statement of financial position.
Zoetermeer, The Netherlands, 14 January 2015
Executive Board of SnowWorld N.V. Supervisory Board J.H.M. Hendriks A.J. Bakker B.K. Mentel P.P.F. de Vries 82 SnowWorld N.V. Annual Report 2013 / 2014
Other information
Articles of Association rules governing profit appropriation In accordance with Article 28.2 of the Articles of Association, the result as established in the adopted income statement with notes is at the disposal of the General Meeting of Shareholders.
Proposed profit appropriation for 2013/2014 The result for the 2013/2014 financial year is presented as unappropriated, in anticipation of the resolution of the General Meeting of Shareholders. It is proposed that the loss should be deducted from the other reserves.
Subsequent events There are no events after the closing date to report. SnowWorld N.V. Annual Report 2013 / 2014 83
Independent auditor’s report on financial statements
To: the shareholders and Supervisory Board of SnowWorld N.V.
Report on the Audit of the Financial Statements 2013/2014
Our opinion We have audited the accompanying financial statements 2013/2014 of SnowWorld N.V., based in Zoetermeer.
In our opinion, the financial statements give a true and fair view of the financial position of SnowWorld N.V. on 30 September 2014 its financial and its cash flows for the period 1 October 2013 to 30 September 2014 in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRS) and Part 9 of Book 2 of the Dutch Civil Code (Burgerlijk Wetboek, or ‘BW’).
The financial statements comprise: 1. The statement of financial position as at 30 September 2014; 2. The following statements for the period 1 October 2013 to 30 September 2014: income statement, statement of comprehensive income, changes in equity and the cash flow for the year then ended; and 3. The notes comprising a summary of the significant accounting policies and other explanatory information.
Basis for our opinion We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the ‘Our responsibilities for the audit of the financial statements’ section of our report.
We are independent of SnowWorld N.V. in accordance with the relevant Dutch ethical requirements as included in the ‘Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO)’ and other relevant independence regulations in the Netherlands. Furthermore we have complied with ‘Verordening op de gedrags- en beroepsregels accountants (VGBA)’.
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Materiality Misstatements can arise from fraud or error and will be considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users on the basis of these financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.
Based on our professional judgment we determined the materiality for the financial statements as a whole at € 193,000. We have selected revenue as the benchmark for the determination of the materiality, since this item is most appropriate to the business of SnowWorld N.V. We have determined the materiality for this year at 0.75% of the revenue, instead of the 1% used in the previous year. This lower level of materiality was chosen as a result of the reversed listing of SnowWorld N.V. and the larger group of stakeholders. We also took account of misstatements and/ or potential misstatements that in our opinion could be material for the users of the financial statements on qualitative reasons.
We agreed with the Supervisory Board that misstatements in excess of € 10,000 which are identified during the audit, would be reported to them, as well as smaller misstatements that in our view must be reported on qualitative grounds. 84 SnowWorld N.V. Annual Report 2013 / 2014
Scope of the Group audit SnowWorld N.V. is at the head of a group of entities, consisting of SnowWorld N.V., SnowWorld Leisure N.V. and SnowWorld International B.V. The financial information of this group is included in the financial statements of SnowWorld N.V.
The group audit mainly focused on SnowWorld Leisure N.V. and the assets in production at SnowWorld International B.V. SnowWorld Leisure N.V. is a significant part of the Group, since all activities are carried out by this company. The assets in production at SnowWorld International B.V. are significant due to the size of this item. We conducted all the audit procedures ourselves.
By implementing the procedures above, we have been able to obtain sufficient and appropriate audit evidence about the group’s financial information to provide an opinion about the financial statements 2013/2014.
Our key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements. We have communicated the key audit matters to the Supervisory Board. The key audit matters are not a comprehensive reflection of all matters discussed.
These matters were addressed in the context of our audit on the financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters.
Recognition of reverse takeover SnowWorld N.V. has issued shares after a reverse takeover. Subsequently a share issue took place. The associated costs are recognized partly directly in equity and partly in the income statement. SnowWorld N.V. was assisted by an external adviser with respect to the treatment and attribution of these costs.
Our audit procedures included determining that the reverse takeover is recognized correctly. Our audit procedures included the use of work by experts working for BDO to assist us in this assessment.
The disclosure by SnowWorld N.V. on the recognition of the reverse takeover is provided on page 16 of the Report of the Executive Board and on page 49 of the financial statements.
Valuation of land and buildings SnowWorld N.V. measures its land and buildings at historical cost. Given their value of € 49 million, the land and buildings are material to our audit. The Executive Board has taken the view that no additional write-down is needed on the basis of valuations. The valuations were carried out by an external valuer engaged by SnowWorld N.V. and are based on assumptions influenced by expected future economic conditions.
Our audit procedures included establishing the independence and expertise of the expert engaged by SnowWorld N.V., as well as establishing the reliability of the valuations made. Our procedures in this respect included an assessment of the principles used and the results of the valuations.
The disclosure from SnowWorld N.V. on its land and buildings is provided in note 10 to the financial statements.
Assets in production The item assets in production concerns capitalized costs relating to the preparation of new branches in Spain and France and the addition of a third slope to the complex in Zoetermeer. We have also paid attention to the disclosures of SnowWorld N.V. regarding the assumptions used for the valuation and probability that these projects will be completed. We have also evaluated whether the disclosures are adequate and sufficiently substantiated. Furthermore, we assessed whether the substantiation provided gives sufficient information on the choice of assumptions and the valuation.
The disclosure from SnowWorld N.V. on its assets in production is provided on page 23 of the Report of the Executive Board and in note 10 to the financial statements. SnowWorld N.V. Annual Report 2013 / 2014 85
Valuation of goodwill SnowWorld N.V. is obliged to test the valuation of goodwill each year for impairment. This annual impairment test was material for our audit, because the estimation process is complex and subjective, and is based on assumptions. These assumptions are influenced by expected future economic conditions.
We also paid attention to the disclosures by the Executive Board of SnowWorld N.V. on the key assumptions with respect to the determination of the recoverable value of the goodwill, such as the cash-flow forecasts and the discount rate used. We also tested whether these disclosures were adequate and provided sufficient information regarding the choice of assumptions, and the sensitivity of the assumptions to the valuation.
The disclosure from SnowWorld N.V. on the goodwill is provided in note 9 to the financial statements and specifically states that minor changes to the key assumptions could in the future lead to an impairment.
Valuation of option schemes SnowWorld N.V. has two option schemes. The options vested under these option schemes are recognized in the statement of financial position. The valuation of the options is determined by an external expert engaged by SnowWorld N.V. using the ‘Black-Scholes-Merton’ model.
Our audit procedures accordingly included the use of work carried out by a valuation expert affiliated to BDO to assist us in our assessment of the assumptions and methodologies used by SnowWorld N.V.
The disclosure in note 15 on the option schemes states how the measurement of the options is determined and the sensitivity of the principles applied to the measurement of the options.
Responsibilities of the Executive Board and the Supervisory Board for the financial statements The Executive Board is responsible for the preparation and fair presentation of the financial statements in accordance with EU-IFRS and for the preparation of the report of the Executive Board in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the Executive Board is responsible for such internal controls as the Executive Board determines is necessary to enable the preparation of financial statements that are free from material misstatement whether due to fraud or error.
In preparing the financial statements, the Executive Board is responsible for assessing the company’s ability to continue as a going concern. Based on the financial reporting frameworks mentioned, the Executive Board should prepare the financial statements using the going concern basis of accounting unless the Executive Board either intends to liquidate the company or cease operations or has no realistic alternative but to do so. The Executive Board should disclose events and circumstances that may cast significant doubt on the company’s ability to continue as a going concern.
The Supervisory Board is responsible for overseeing the company’s financial reporting process.
Our responsibilities for the audit of the financial statements Our objective is to plan and perform the audit assignment in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we may not have detected all errors and fraud.
We have exercised professional judgment and have maintained professional skepticism throughout the audit, in accordance with the Dutch Standards on Auditing, ethical requirements and independence requirements. 86 SnowWorld N.V. Annual Report 2013 / 2014
Our audit included e.g.: d Identifying and assessing the risks of material misstatements of the financial statements, whether due to fraud or error, designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; d Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control; d Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Executive Board; d Concluding on the appropriateness of the Executive Board’s use of the going concern basis of accounting, and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern; d Evaluating the overall presentation, structure and content of the financial statements, including the disclosures; and d Evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with the Supervisory Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant findings in the internal control that we identify during our audit.
We provide the Supervisory Board with a statement that we have complied with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that reasonably be thought to bear on our independence and where applicable, related safeguards.
From the matters communicated with the Supervisory Board, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, not communicating the matter is in the public interest.
Report on other legal and regulatory requirements
Report of the Executive Board and other information Pursuant to legal requirements under Section 2:393 sub 5 at e and f of the Dutch Civil Code (concerning our obligation to report about the report of the Executive Board and other data), we declare that: d We have no deficiencies to report as a result of our examination whether the report of the Executive Board, to the extent we can assess, has been prepared in accordance with Part 9 of Book 2 of this Code, and whether the information as required under Section 2:392 sub 1 at b-h has been annexed. d Further we report that the report of the Executive Board, to the extent we can assess, is consistent with the financial statements as required by Section 2:391 sub 4 of the Dutch Civil Code. SnowWorld N.V. Annual Report 2013 / 2014 87
Engagement We were engaged by the Supervisory Board as auditor of SnowWorld N.V. on 10 December 2013, as of the audit for year 2013/2014 and have operated as statutory auditor since that date.
Rotterdam, 14 January 2015
BDO Audit & Assurance B.V. On behalf of, signed J.C. Jelgerhuis Swildens RA 88 SnowWorld N.V. Annual Report 2013 / 2014
Locations
SnowWorld Zoetermeer Buytenparklaan 30 2717 AX Zoetermeer The Netherlands T: +31 (0) 79 3 202 202 [email protected]
SnowWorld Landgraaf Witte Wereld 1 6372 VG Landgraaf The Netherlands T: +31 (0) 45 54 70 700 [email protected] www.snowworld.com
Colophon
Final editing SnowWorld N.V.
Text & advice d Boogaard Communications Consultancy d SnowWorld N.V.
Design & production C&F Report
Translation C&F Report
Photography SnowWorld N.V.
This annual report is an English translation of the original Dutch publication. In the event of textual inconsistencies between the English and the Dutch version, the latter shall prevail.
SnowWorld Landgraaf SnowWorld Zoetermeer Witte Wereld 1 Buytenparklaan 30 6372 VG Landgraaf 2717 AX Zoetermeer The Netherlands The Netherlands T: +31 (0)45 5 470 700 T: +31 (0)79 3 202 202 [email protected] [email protected]