2011 Annual Report Swiss-based Highlight Group Highlight Communications AG Annual Report 2011 is one of the most successful media stocks listed on the German capital market. Its unique selling proposition is its broad product portfolio. Highlight Communications AG at a glance (TCHF) 2011 2010 Consolidated Total assets 499,182 525,569 balance sheet Film assets 154,555 175,801 Cash and cash equivalents 140,711 166,039 Financial liabilities 204,207 251,391 Equity attributable to the shareholders 82,746 67,621 Consolidated Sales 383,452 434,562 income statement Profi t from continuing operations 39,702 56,120 Net profi t (Highlight shareholders) 31,610 36,172 Earnings per share (CHF) 0.69 0.78 Earnings per share (EUR) 0.56 0.57 Consolidated Cash fl ow from operating activities 114,724 175,313 statement of cash flows Cash fl ow for investing activities –76,619 –111,552 thereof payments for fi lm assets –77,544 –106,844 Cash fl ow for fi nancing activities –59,818 –75,810 thereof dividend payments –9,722 –2,005 Highlight Communications AG Cash fl ow for the reporting period –22,143 –12,049 Netzibodenstr. 23b · 4133 Pratteln BL, Switzerland Phone +41 (0)61- 816 96 96 · Fax +41 (0)61- 816 67 67 Personnel Headcount as of December 31 733 787 [email protected] · www.highlight-communications.ch 2011 Annual Report Swiss-based Highlight Group Highlight Communications AG Annual Report 2011 is one of the most successful media stocks listed on the German capital market. Its unique selling proposition is its broad product portfolio. Highlight Communications AG at a glance (TCHF) 2011 2010 Consolidated Total assets 499,182 525,569 balance sheet Film assets 154,555 175,801 Cash and cash equivalents 140,711 166,039 Financial liabilities 204,207 251,391 Equity attributable to the shareholders 82,746 67,621 Consolidated Sales 383,452 434,562 income statement Profi t from continuing operations 39,702 56,120 Net profi t (Highlight shareholders) 31,610 36,172 Earnings per share (CHF) 0.69 0.78 Earnings per share (EUR) 0.56 0.57 Consolidated Cash fl ow from operating activities 114,724 175,313 statement of cash flows Cash fl ow for investing activities –76,619 –111,552 thereof payments for fi lm assets –77,544 –106,844 Cash fl ow for fi nancing activities –59,818 –75,810 thereof dividend payments –9,722 –2,005 Highlight Communications AG Cash fl ow for the reporting period –22,143 –12,049 Netzibodenstr. 23b · 4133 Pratteln BL, Switzerland Phone +41 (0)61- 816 96 96 · Fax +41 (0)61- 816 67 67 Personnel Headcount as of December 31 733 787 [email protected] · www.highlight-communications.ch The companies of the The Highlight spectrum ranges from Events Highlight Group design, produce and market top feature fi lms and 2012 Film events and premium formats TV formats, high-selling DVD and Cannes Film Festival May 16 – 27 in the areas of fi lm, sports and music Blu-ray releases, European premium football Locarno Film Festival August 1 – 11 Venice Film Festival August 29 – September 8 that are known worldwide. to traditional music events. Toronto Film Festival September 6 – 16 Sports- and Event-Marketing UEFA Europa League fi nal May 9 Highlight Communications AG, Pratteln, Switzerland Members of the Highlight Group UEFA Champions League fi nal May 19 Film Sports- and Event-Marketing Eurovision Song Contest, semifi nals May 22 and 24 Eurovision Song Contest, fi nal May 26 100100 % 100 % 100 % Cinema Home entertainment Football Vienna Philharmonic’s Summer Night Concert June 7 Highlight subsidiary Constantin The Highlight Group has its own The TEAM Group is one of the Film AG is Germany’s leading producer distribution organization for the best world’s leading agencies in the Constantin Film AG Highlight Communications Team Holding AG Investor Relations MUNICH, GERMANY (Deutschland) GmbH LUCERNE, SWITZERLAND and distributor of theatrical fi lms. possible exploitation of DVD/Blu-ray global marketing of international MUNICH, GERMANY It brought two of the six most popular rights of theatrical fi lms. Distribution major events. It markets exclusively Interim reports May/August/November German productions of 2011 into in Switzerland and Austria is performed the “UEFA Champions League”, Subsidiaries of T. E . A . M. Te l e v i s i o n E v e n t cinemas: “Wickie auf grosser Fahrt“ by the Rainbow Home Entertainment the “UEFA Europa League” and the Annual General Meeting June 1 Constantin Film AG Rainbow Home Entertainment AG And Media Marketing AG and “The Three Musketeers“. subsidiaries. “UEFA Super Cup”. German Equity Forum November 12 – 14 PRATTELN, SWITZERLAND LUCERNE, SWITZERLAND Constantin Film Schweiz AG Highlight Communications BASEL, SWITZERLAND Rainbow Home Team Football Marketing AG Television (Deutschland) GmbH cooperates with Music Entertainment GmbH LUCERNE, SWITZERLAND Some of Constantin Film’s subsidiaries Paramount Home Entertainment to Other well-known projects handled VIENNA, AUSTRIA produce very successful TV formats cover the German market. by the TEAM Group include the marke- on behalf of major TV stations at home ting of the “Eurovision Song Contest” and abroad: daily shows, primetime The bestsellers of 2011 were and a marketing cooperation with the shows, crime series and TV movies/ “Resident Evil: Afterlife”, Vienna Philharmonic Orchestra. mini series. “Step Up 3 – Make Your Move” and As part of this cooperation, it markets “Animals United”. the orchestra’s “New Year’s Day Concert” and the “Summer Night Concert”. The companies of the The Highlight spectrum ranges from Events Highlight Group design, produce and market top feature fi lms and 2012 Film events and premium formats TV formats, high-selling DVD and Cannes Film Festival May 16 – 27 in the areas of fi lm, sports and music Blu-ray releases, European premium football Locarno Film Festival August 1 – 11 Venice Film Festival August 29 – September 8 that are known worldwide. to traditional music events. Toronto Film Festival September 6 – 16 Sports- and Event-Marketing UEFA Europa League fi nal May 9 Highlight Communications AG, Pratteln, Switzerland Members of the Highlight Group UEFA Champions League fi nal May 19 Film Sports- and Event-Marketing Eurovision Song Contest, semifi nals May 22 and 24 Eurovision Song Contest, fi nal May 26 100100 % 100 % 100 % Cinema Home entertainment Football Vienna Philharmonic’s Summer Night Concert June 7 Highlight subsidiary Constantin The Highlight Group has its own The TEAM Group is one of the Film AG is Germany’s leading producer distribution organization for the best world’s leading agencies in the Constantin Film AG Highlight Communications Team Holding AG Investor Relations MUNICH, GERMANY (Deutschland) GmbH LUCERNE, SWITZERLAND and distributor of theatrical fi lms. possible exploitation of DVD/Blu-ray global marketing of international MUNICH, GERMANY It brought two of the six most popular rights of theatrical fi lms. Distribution major events. It markets exclusively Interim reports May/August/November German productions of 2011 into in Switzerland and Austria is performed the “UEFA Champions League”, Subsidiaries of T. E . A . M. Te l e v i s i o n E v e n t cinemas: “Wickie auf grosser Fahrt“ by the Rainbow Home Entertainment the “UEFA Europa League” and the Annual General Meeting June 1 Constantin Film AG Rainbow Home Entertainment AG And Media Marketing AG and “The Three Musketeers“. subsidiaries. “UEFA Super Cup”. German Equity Forum November 12 – 14 PRATTELN, SWITZERLAND LUCERNE, SWITZERLAND Constantin Film Schweiz AG Highlight Communications BASEL, SWITZERLAND Rainbow Home Team Football Marketing AG Television (Deutschland) GmbH cooperates with Music Entertainment GmbH LUCERNE, SWITZERLAND Some of Constantin Film’s subsidiaries Paramount Home Entertainment to Other well-known projects handled VIENNA, AUSTRIA produce very successful TV formats cover the German market. by the TEAM Group include the marke- on behalf of major TV stations at home ting of the “Eurovision Song Contest” and abroad: daily shows, primetime The bestsellers of 2011 were and a marketing cooperation with the shows, crime series and TV movies/ “Resident Evil: Afterlife”, Vienna Philharmonic Orchestra. mini series. “Step Up 3 – Make Your Move” and As part of this cooperation, it markets “Animals United”. the orchestra’s “New Year’s Day Concert” and the “Summer Night Concert”. CONTENTS FOREWORD BY THE CHAIRMAN 2 MEMBERS OF THE BOARD OF DIRECTORS 7 CORPORATE GOVERNANCE 9 HIGHLIGHT STOCK 20 REPORT ON THE HIGHLIGHT GROUP’S SITUATION 26 Business and general conditions 28 Report on business performance and the situation in the FILM SEGMENT 34 Report on business performance and the situation in the SPORTS- AND EVENT-MARKETING SEGMENT 44 Report on business performance and the situation in the OTHER BUSINESS ACTIVITIES SEGMENT 50 Result of operations, net assets and fi nancial situation of the Highlight Group 54 Personnel report 58 Events after the balance sheet date 58 Risk report 59 Report on opportunities 64 Forecast 65 CONSOLIDATED FINANCIAL STATEMENTS 70 Consolidated balance sheet 72 Consolidated income statement 74 Consolidated statement of comprehensive income/loss 75 Consolidated statement of changes in equity 76 Consolidated statement of cash fl ows 78 Notes to the consolidated fi nancial statements 80 REPORT OF THE STATUTORY AUDITOR 152 FINANCIAL STATEMENTS 155 Balance sheet 156 Income statement 158 Notes to the fi nancial statements 159 Proposal for the appropriation of retained earnings and the legal reserves from capital contributions 165 REPORT OF THE STATUTORY AUDITOR 166 EVENTS 2012 (back inside cover) 1 Foreword by the Chairman The Highlight Group further shored up its operating position as one of the leading media groups in the Film and Sports- and Event-Marketing areas in fi scal year 2011. 2 Red carpet in Munich: The stars of “Wickie auf grosser Fahrt” celebrated the fi lm’s world premiere with more than 1,500 fans.