2 SnowWorld at a glance
3 Key developments 2014/2015 4 Multi-year overview
6 Foreword
8 Composition of the Supervisory Board and Executive Board
10 Strategy
11 Shareholder information
14 Report of the Supervisory Board 16 Report of the Executive Board 30 Risk management
32 Corporate Governance 35 Executive Board declaration 37 Financial statements 81 Other information 87 Locations 87 Colophon
SnowWorld at a glance
SnowWorld, with its indoor skiing facilities, is one of the leading companies in the industry worldwide.
SnowWorld has achieved rapid growth in the Netherlands since its establishment in 1996. The strategy is aimed at both further optimising the current ski resorts and rolling out the proven successful concept more widely in Europe. SnowWorld was listed on the NYSE Euronext Amsterdam in December 2013 in order to finance this strategy.
SnowWorld has 233 employees (FTE) and achieved revenue of more than € 25 million and net operating profit of € 2.3 million in the 2014/2015 financial year.
Profile
SnowWorld owns and operates two indoor ski resorts in the Netherlands. They are located in Landgraaf and Zoetermeer and have a total snow surface of approximately 50,000 m².
In addition to the various ski slopes, both ski resorts feature a range of food and beverage facilities and meeting rooms. Winter sports stores and health clubs also form part of the SnowWorld concept. The ski resort in Landgraaf furthermore comprises a four-star hotel with 100 rooms and an Outdoor Park.
1996
2001
2002
2003
2007
2008
2012
2013
2014
Establishment of SnowWorld by Koos Hendriks Opening of Zoetermeer location with two 160-metre ski slopesOpening of Landgraaf location with two ski slopes of 500 metres and 100 metres First indoor FIS World Cup in Landgraaf
Issue of shares Opening of third
ski slope (210 metres) in Zoetermeer
Key developments 2014/2015
Strategic
Obtaining building permit for the planned extension of the third slope in Zoetermeer
Adjustment look-and-feel, investment in new equipment and new corporate identity for the fitness activities Realisation of new outdoor terrace (+/- 700 m²) in Zoetermeer
Commissioning investment in new cooling system in Zoetermeer Feasibility study further development of Wilhelminaberg in Landgraaf
Developments in Paris and Barcelona awaiting completion of the zoning plan procedures Financial
Operating EBITDA increased by 3.2% from € 8.2 million to € 8.5 million
Net revenue of € 25.4 million virtually the same as last financial year (€ 25.8 million)
Strong rise in net operating profit by 31.6% from € 1.8 million to € 2.3 million
Increase in net profit per share from € 0.68 to € 0.79
The operating cash flow increased by 4.2% to € 5.7 million
Improved solvency; equity surged considerably by 39.2% to € 10.4 million
Guarantee capital rose from 15.4% to 20.2%
Interest-bearing debt (excluding interest-rate swap) fell by € 3.4 million (9.4%) to € 36.0 million
Proposal first dividend payment in history of € 0.18 per share
Multi-year overview
(consolidated figures as at 30 September)
1
Results
(in € x 1,000) 2014/2015 2013/2014 2013/2014 2012/2013 2011/2012 2010/2011
Net revenue 25,397 25,759 25,759 25,378 25,944 25,951
In % compared to previous year –1% 2% 2% –2% 0% –1%
EBITDA 8,468 8,207 6,770 8,542 8,756 9,313
In % compared to previous year 3% –4% –21% –2% –6% –8%
Operating result (EBIT) 5,059 4,745 3,308 4,619 4,052 4,558
In % compared to previous year 7% 3% –28% 14% –11% 26%
Result after tax 2,326 1,767 386 1,710 1,084 1,377
In % compared to previous year 32% 3% –77% 58% –21% 104%
Cash flow
(in € x 1,000) 2014/2015 2013/2014 2013/2014 2012/2013 2011/2012 2010/2011
Operating activities 5,659 5,432 5,237 5,921 5,790 6,509
Investment activities –2,321 –1,410 –178 –1,107 –4,811 –1,981
Financing activities –2,012 –3,539 –4,923 –4,825 –988 –4,489
Net cash flow 1,326 483 136 –11 –9 39
Personnel
(in € x 1,000) 2014/2015 2013/2014 2012/2013 2011/2012 2010/2011
Number of employees (FTE) 233 241 238 247 246
In % compared to previous year -3% 1% –4% 0% –1%
Employee expenses 7,775 7,995 7,720 7,615 7,504
In % compared to previous year -3% 4% 1% 1% 1%
Net revenue per employee 109 107 107 105 105
In % compared to previous year 2% 0% 2% 0% 0%
Employee expenses per employee 33 33 32 31 31
In % compared to previous year 0% 3% 5% 1% 3%
Employee expenses as % of net revenue 31% 31% 30% 29% 29%
In % compared to previous year –1% 3% 3% 1% 2%
Statement of financial position data
(in € x 1,000) 2014/2015 2013/2014 2012/2013 2011/2012 2010/2011 Capital use Non-current assets 53,039 54,281 56,202 59,502 59,478 Working capital –3,235 –3,279 –3,150 –2,943 –3,395 49,804 51,002 53,052 56,559 56,083 Finance Group equity 10,438 7,497 3,913 6,956 6,688 Non-current liabilities 40,833 43,621 49,199 48,957 48,858Receivable from/payable to participants 42 67 –13 704 604
Current liabilities to banks –1,509 –183 –47 –58 –67
49,804 51,002 53,052 56,559 56,083
Net investment 2,321 1,523 1,127 4,811 1,981
Depreciation –3,409 –3,462 –3,923 –4,704 –4,755
Interest-bearing debt as % of capital use 79% 85% 93% 88% 88%
Solvency 19% 13% 7% 11% 11%
Per share
(in euros) 2014/2015 2013/2014 2013/2014 2012/2013 2011/2012 2010/2011
Earnings per share 0.79 0.68 0.15 0.56 0.29 0.37
Group equity per share 3.55 3.20 2.54 2.09 1.89 1.82
Cash flow from operating activities per share 1.93 2.10 2.02 1.92 1.57 1.77
Foreword
Where the previous reporting year was characterised by our flotation and issue of new shares, this year we have been able to fully concentrate on operations and the further implementation of our strategy.
Increased result
By tightly controlling costs, SnowWorld’s result has increased over the past year. The EBITDA increased by 3.2% to € 8.5 million. In addition, the net operating result rose by 31.6% to € 2.3 million. We were able to perform the operation with less people meaning we were able to reduce employee expenses. We were also able to save on our marketing strategy by shifting from ‘print’ to ‘online’. Improvement in financial position
SnowWorld’s financial position greatly improved due to the strong operational results and related cash flow. Solvency rose from 13% to 19% and interest-bearing liabilities dropped by € 3.4 million to € 36 million (excluding interest swap).
Strategy
SnowWorld’s strategy is based on two pillars. The first is the continuous improvement and development of our two existing locations and the second is the realisation of new locations.
We are delighted that after many years of efforts we have obtained the environmental permit for the extension of the existing third slope in Zoetermeer. We are still awaiting the formal proceedings before the Council of State, but we view them with confidence. We are assuming that we can realise the extension in 2016, so that the results will be seen with effect of the 2016/2017 financial year. Extensive talks are being held with ABN AMRO Bank with regard to the financing of this project.
Outlook
We have a positive outlook for the 2015/2016 financial year. Consumer confidence has increased in the past year and the economy is picking up. With our efficiently set up operation, we expect a higher result after tax for the 2015/2016 financial year. I would like to thank our employees for their commitment over the past year. They make SnowWorld a success. With each other, we try to surpass the expectations of our customers every day. That is the basis of our success.
Supervisory Board
Supervisory Directors are selected and appointed based on a 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
Chairman of the Supervisory Board of Transavia Airlines B.V. Chairman of the Supervisory Board of GVB Holding N.V.
Composition of the Supervisory Board and Executive Board
Information on the management as at 1 October 2015
The management of SnowWorld is entrusted to the Executive Board whose statutory members are appointed and dismissed by the Supervisory Board. The non-statutory members are appointed and dismissed in accordance with Dutch (labour) law.
Auxiliary positions at organisations
NBTC Holland Marketing Foundation (Chairman); Jumping Amsterdam Foundation (Chairman);
Member of the Commissie van Beroep van de Stichting Garantiefonds Reisgelden and the Stichting Calamiteitenfonds Reizen;
Dutch Guide Dog Foundation; Amsterdam Museum Foundation;
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
Managing Director of the Mentelity Foundation; Snowboarding promoter for the Paralympic Games; Guest Speaker;
Author.
P.P.F. (Peter Paul) de Vries (1967)
Member
Year of appointment: 2015 End of current term: 2019
Chairman of the Board Value8 N.V.
Auxiliary positions
Member of the Supervisory Board of Euronext Amsterdam N.V.; Director of Sucraf N.V. (Belgium);
Director of IEX Group N.V.
Auxiliary positions at organisations
Member of the Recommendations Committee for the foundation Stichting Juliana Kinderziekenhuis
Remuneration
The Chairman of the Supervisory Board receives remuneration of € 20,000 per annum. The other members of the Supervisory Board receive remuneration of € 15,000 per annum. Value8 N.V., of which Mr de Vries is CEO, has an equity interest of 15% in SnowWorld N.V. Value8 N.V. also has an option to purchase shares. For a detailed description of the share option, please see the shareholder information on pages 11 to 13 of this annual report. The other supervisory directors had no equity interest in the company.
Remuneration
SnowWorld’s remuneration policy for its board members is aimed at attracting, motivating and retaining qualified board members who have experience in the leisure industry. The total remuneration 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 € 283,640 (originally € 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 € 133,676 per year. Mr W.A. Moerman participates in the SnowWorld pension scheme. SnowWorld pays the related pension premium.
SnowWorld has made a vehicle available to both members of the Executive Board. No other fixed allowances are provided. Mr J.H.M. Hendriks is majority shareholder of SnowWorld and Mr W.A. Moerman has been granted an option to acquire shares in SnowWorld. Please refer to the Shareholder information on page 11 of this annual report for more information on this matter. Wim Moerman and Koos Hendriks (from left to right)
Mr W.A. Moerman also served on the Executive Board in the position of Chief Financial Officer (CFO) during the financial year under review.
J.H.M. (Koos) Hendriks (1949)
Chief Executive Officer
Mr J.H.M. Hendriks has a long track record in the winter sport sector and has led SnowWorld’s activities without interruption since 1996.
Former activities
1980 – 2001 Duijvestein Wintersport, owner 1974 – 1979 Various sports stores, owner W.A. (Wim) Moerman (1972)
Chief Financial Officer
Mr W.A. Moerman has fulfilled the position of CFO at SnowWorld since November 2007.
Former activities
1990 – 2007 Ernst & Young Accountants, Auditor
Auxiliary positions
Member of the Board of Coöperatieve Vereniging Notarishuis U.A. in Rotterdam
Executive Board
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 new locations in Paris and Barcelona. Based on the general course of affairs, we expect that we will not be able to open our first foreign location any earlier than the fourth quarter of 2018. SnowWorld critically assesses the existing indoor ski resorts that 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 SnowWorld formula so that it can contribute to SnowWorld’s earnings per share.
Furthermore, SnowWorld offers consultancy work for the development of new indoor ski resorts. This means it is close to the market and has the possibility of participating in new developments at an early stage.
Financing strategy
SnowWorld’s strategy is aimed at ensuring that each investment helps create shareholder value. The financing strategy for the intended new locations is to have approximately 60% loan capital and 40% equity, whereby a local partner injects approximately half of the equity and SnowWorld the other half. Due to the combination of the expected returns on the investment and an attractive mix of financing, new locations are intended to make a substantial contribution to the growth in earnings per share. A potential share issue by SnowWorld will be kept as limited as possible in order to minimise dilution for shareholders.
General
The activities of SnowWorld consist of operating two indoor ski resorts. These resorts are stand-alone winter sport centres where guests can enjoy a combination of activities in an Alpine ambience. The various slopes are covered with excellent snow and are suitable for both novice and advanced skiers and snowboarders. A challenging fun park is also part of the offering. The ski school provides lessons and courses at all levels.
In addition to the slopes, both ski resorts offer a selection of food and beverage facilities ranging from après ski bars to self-service and à la carte restaurants. The various rooms can be used for meetings or other business packages.
Both ski resorts also feature a modern health club and a Duijvestein winter sport store.
SnowWorld Landgraaf furthermore has a four-star hotel with 100 rooms and 420 beds and an Outdoor Park. This 25,000-square metre Outdoor Park provides a unique offering and is one of the largest of its kind in Europe.
SnowWorld has formulated a strategy that is aimed at creating value for its shareholders through its welcoming and inviting sport experience.
SnowWorld’s strategy is aimed first and foremost at the continual optimisation of the two existing indoor ski resorts. The strategy also focuses on opening new SnowWorld locations.
Optimising existing indoor ski resorts
Optimising the existing ski resorts entails adding activities that strengthen the traditionally less busy summer season, expanding the existing resorts and further optimising the internal processes. The plan to lengthen the third slope at the Zoetermeer location fits in with this strategy. This extension, which we expect will be realised next year, 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.
This also includes the investments in the health clubs in both Zoetermeer and Landgraaf this reporting year. This investment further improves the quality of the product, which in turn means that the number of members is expected to grow.
In addition, SnowWorld is examining the feasibility of the further development of its direct surroundings in Landgraaf.
Shareholder information
Course of number of outstanding shares
At the end of the 2013/2014 financial year, the number of outstanding shares was 2,950,163 with a nominal value of € 3.75 per share. During the 2014/2015 financial year no mutations occurred in the number of outstanding shares. However, the nominal value per share was reduced to € 2.00 per share by an amendment to the Articles of Association. At the end of the 2014/2015 financial year, the number of outstanding shares was 2,950,163 with a nominal value of € 2.00 per share.
SnowWorld holds 11,640 shares in its own capital. Preventing misuse of inside information
As a listed company, SnowWorld N.V. has made an arrangement to prevent the use of inside information by our supervisory directors, directors and employees, as well as other ‘insiders’. The legal provisions in force in the Netherlands in the area of inside information and market manipulation have been brought together in the Financial Supervision Act. We have drawn up regulations in accordance with this Act. The persons whom this applies to have agreed in writing to act according to these rules in relation to information in their possession. Mr R.A.G. Piket (controller) acts as compliance officer, and ensures correct compliance with the legislation and regulations in the area of inside information. Major Holdings Disclosure Act
Pursuant to the Major Holdings Disclosure Act the shareholders of a Dutch listed company are obliged to inform the Netherlands Authority for the Financial Markets if they hold an equity interest in the share capital of that company of more than 3%. The following shareholders have reported that (on 1 October 2015) they had an interest of more than 3% in the share capital of SnowWorld N.V.:
d J.H.M. Hendriks Beheermaatschappij B.V. (68%); d Value8 N.V. (15%); and
d J.P. Visser (5%). Capital structure
SnowWorld N.V. is a public limited company incorporated under Dutch law.
SnowWorld shares have been listed on NYSE Euronext Amsterdam since 10 December 2013 and are followed by analysts from SNS Bank. SNS Bank also acts as liquidity provider.
The public limited company SnowWorld has one class of issued shares. The same rights and obligations attach to each share and the shares carry no special rights of control. In addition SnowWorld applies no restrictions of voting rights, except for any restrictions prescribed by law. No depositary receipts are issued for the shares and there are no other protective measures. SnowWorld shares are freely transferable.
There are no agreements with any shareholder(s) that may provide cause for limiting the transfer of shares or of depositary receipts for shares issued with its cooperation or the transfer of voting rights.
The major shareholders referred to in the section ‘Major Holdings Disclosure Act’ that have reported their interest in the share capital of SnowWorld to the Netherlands Authority for the Financial Markets (AFM) in accordance with the Major Holdings Disclosure Act hold around 88% of the shares. Accordingly, the number of freely tradable shares amounts to around 354,000.
The SnowWorld share price dropped during the 2014/2015 financial year. On 1 October 2014 the price was € 8.00 per share, while at the end of the 2014/2015 financial year the price was € 7.00 per share.
Share price development of SnowWorld (in euros)
be adapted in accordance with the generally accepted rules for doing so. The shares that are acquired pursuant to the option agreement will carry all rights attached to the other ordinary shares already in issue at that time. The option is exercisable in 5 equal annual steps as from 1 December 2013. The option can be exercised in full or in part during the term. If the option has not been exercised (in full) during the term concerned, it will expire by operation of law after the end of the term. If the option is exercised in full during the term, the shareholding of the existing shareholders will be diluted by around 4.8%.
Mr J.H.M. Hendriks (CEO) holds 68% of the issued capital of SnowWorld N.V. through his company, J.H.M. Hendriks Beheermaatschappij B.V.
Option scheme for Value8
In addition to Mr W.A. Moerman (CFO), Value8 N.V. likewise obtained, as part of the flotation of SnowWorld, an option to acquire shares in the capital of the company. SnowWorld thereby grants the irrevocable and non-transferable right to acquire, during a term of 5 years from 1 December 2013, shares in full and unencumbered ownership at an exercise price of € 8.00 per share with a nominal value of € 2.00. The option relates to 5% of the shares in issue on the exercise date. Even if SnowWorld proceeds to issue shares for the exercise of the option, after that issue Value8 N.V. will still acquire 5% of the issued capital at that time by exercising its option. In the event of a repayment of capital (capital reduction), special dividend distributions (dividends not charged to profit) and/or share splits, the option will be adapted in accordance with the generally accepted rules for doing so. The shares that are acquired pursuant to the option agreement will carry all rights attached to the other ordinary shares already in issue at that time. The option can be exercised in full or in part during the term. If the option has not been exercised (in full) during the term concerned, it will expire by operation of law after the end of the term. Value8 N.V. will then no longer be able to derive any rights from the option. If the option is exercised in full during the term, the shareholding of the existing shareholders will be diluted by 5.0%.
Organisational structure
SnowWorld has one 100%-owned subsidiary, SnowWorld Leisure N.V. established in Zoetermeer, which in turn holds 100% of the shares in SnowWorld International B.V., likewise established in Zoetermeer.
Amendment to the Articles of Association
On 12 March 2015, the General Meeting of Shareholders agreed to an amendment to the Articles of Association, which refers to a capital reduction by means of the adjustment of the nominal value per share of € 3.75 to € 2.00. This amendment to the Articles of Association aims to reduce the subscribed capital and increase the freely distributable reserves so that the payment of dividend in accordance with the formulated dividend policy is possible. Furthermore, the adjustment of the number of ordinary shares in the share capital was agreed in the same meeting so this is now a round figure of € 20,000,000. The amendment to the Articles of Association was effected on 23 July 2015.
Issue and acquisition of shares (in the company’s own capital)
In accordance with the Articles of Association of the company, shares are issued pursuant to a resolution of the General Meeting of Shareholders. On 12 March 2015, the General Meeting of Shareholders extended the authorisation of the Executive Board of the company by a period of 18 months (period ends on 10 December 2016), to issue up to 15% of the issued capital, which included an authorisation to limit or exclude pre-emptive rights. No use was made of this authorisation.
The acquisition by the company of shares in its capital that have not been paid up is void. The company may acquire shares in its own capital or depositary receipts for them in order to transfer them to employees of the company or of a group company pursuant to a scheme applicable to them. The acquisition of shares in its own capital will be effected following a decision by the Executive Board requiring the approval of the Supervisory Board. Option scheme and shareholdings of employees
and members of the Executive Board
SnowWorld does not have a scheme granting rights to employees to take or acquire shares in the capital of the company.
However, Mr W.A. Moerman (CFO) obtained an option to acquire shares in the capital of the company. SnowWorld thereby grants the irrevocable and non-transferable right to acquire, during a term of 5 years from 1 December 2013, shares in full and unencumbered ownership at an exercise price of € 8.00 per share with a nominal value of € 2.00. The option relates to 147,508 shares. The transfer can be effected by purchase or issue. In the event of a repayment of capital (capital reduction), special dividend distributions (dividends not charged to profit) and/or share splits, the option will
Contact
SnowWorld sets store by a transparent dialogue with shareholders, investors, analysts and the financial press. As a company that was recently listed on the stock exchange, SnowWorld would like to hear your views on this annual report and the investor relations policy.
We invite you to inform us of your views by sending an e-mail for the attention of Mr W.A. Moerman, CFO, to the following e-mail address: [email protected].
You can also reach us at: SnowWorld Zoetermeer Buytenparklaan 30 2717 AX Zoetermeer The Netherlands T: +31 (0) 79 3 202 202 www.snowworld.com [email protected] Dividend policy
The proposed dividend policy was accepted at the General Meeting of Shareholders on 12 March 2015. This policy means that with effect of the 2014/2015 financial year SnowWorld N.V. will pay out a dividend payout ratio of approximately 30% to 50% of the result after tax. There is a possibility of proposing an optional dividend (cash dividend or stock dividend). Please see page 19 of this annual report for the proposal to be made to the General Meeting of Shareholders on 11 March 2016.
Financial calendar
Report of the Supervisory Board
Supervisory Directors are selected and appointed based on a profile for members of the Supervisory Board. In accordance with the Dutch Management and Supervision Act and Book 2 of the Dutch Civil Code, the company pursues a policy whereby at least 30% of the Executive Board plus the Supervisory Board is comprised of women.
Activities
The Supervisory Board held two plenary meetings with the Executive Board and the chairman had one progress meeting with the Executive Board during the financial year. A meeting was also held with Value8 N.V. in order to evaluate the reverse takeover and the share issue. In addition to the Supervisory Board’s periodic meetings with the Executive Board, there were also two informal meetings to prepare the General Meeting of Shareholders. As well as during those meetings, the Supervisory Board and Executive Board were in regular contact by telephone or e-mail.
The Supervisory Board did not hold any formal consultations without the Executive Board being present.
The Supervisory Board has the following topics as set agenda points for its meetings with the Executive Board: the development of the financial results and the progress being made on the projects being carried out within the framework of the strategy. The current market developments are also discussed within this context. The Supervisory Board furthermore devoted extensive attention to the following topics in the 2014/2015 financial year: further improving the debt position, the dividend policy, the interim figures, the organisational structure and the replacement of the cooling system in Zoetermeer.
The Supervisory Board closely follows the plans relating to the company’s strategy in general and the accountability for the related risks in particular. Further information on SnowWorld’s risk management is provided on pages 30 en 31 of this annual report. The structure and operation of the related internal risk management and control systems have been discussed with the Supervisory Board.
General
We are pleased to provide you with the Annual Report 2014/2015 that has been drawn up by the Executive Board. This annual report includes the financial statements that have been audited by BDO Audit & Assurance B.V. and discussed with the Executive Board during its meeting on 5 January 2016 that was attended by the external auditor. The statement by the independent auditor is included in this annual report in the ‘Other information’ section. We are of the opinion that this annual report more than fulfils the transparency requirements and that it forms a good basis for the Supervisory Board’s accountability for its supervision.
We propose that the General Meeting of Shareholders:
d Adopt the financial statements, which include the proposal for profit appropriation.
d Discharge the Executive Board from liability for their management in the 2014/2015 financial year.
d Discharge the Supervisory Board from liability for their supervision of the Executive Board in the 2014/2015 financial year.
Composition of the Executive Board
The Executive Board of SnowWorld was comprised in the financial year 2014/2015 of Mr J.H.M. Hendriks in the position of Chief Executive Officer (CEO) and the role of statutory director under the Articles of Association.
Mr W.A. Moerman also served on the Executive Board in the position of Chief Financial Officer (CFO) during the financial year under review.
Composition of the Supervisory Board
At the start of the reporting year, the Supervisory Board consisted of Mr A.J. Bakker and Ms B.K. Mentel. As of 6 January 2015, Mr P.P.F. de Vries also forms part of the Supervisory Board.
During the reporting year, talks were held with the external auditor about the audit approach, the findings as a result of the interim audit and the findings as a result of the balance sheet audit. In addition, the external auditor was present at the General Meeting of Shareholders and also gave an explanation of the work he has carried out and his findings.
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 32 to 34 of this annual report. The Supervisory Board ensured that the Code was applied within the company during the financial year.
In the opinion of the Supervisory Board, the company has fulfilled that which is stated in the Code with respect to the independence of the Supervisory Directors in the financial year.
The Supervisory Board wishes to thank the Executive Board and all the company’s employees for the tremendous dedication they have demonstrated in the 2014/2015 financial year and wish to compliment them on the achieved results in the year under review.
Zoetermeer, the Netherlands, 13 January 2016 The Supervisory Board
A.J. Bakker, chairman B.K. Mentel
Amsterdam Utrecht Rotterdam Zoetermeer Landgraaf The Hague Düsseldorf Cologne Liège Maastricht Landg Landg La La dgraafndgg Düsseldorf Cologne Liège Maastricht sterdamerdam Amsterdam Utrecht Rotterdam Zoetermeer
The Hagague
Report of the Executive Board
General developments
Where in the previous reporting year a lot of time was spent on the flotation and issue of new shares with all the pertaining obligations, this reporting year SnowWorld has again been able to focus entirely on the operations and the implementation of its strategy.
Despite the number of ski passes sold being lower, SnowWorld has achieved better results, both in terms of EBITDA (+ 3.0%), EBIT (+ 7.0%) and the net operating result (+ 32.0%).
An important pillar of SnowWorld’s strategy is strengthening the two existing locations. We are therefore delighted that in September 2015 the Mayor and Aldermen of Zoetermeer granted the environmental permit allowing for the realisation of the extension of the existing third slope at SnowWorld Zoetermeer. In the reporting year, SnowWorld has invested heavily in the Zoetermeer location. The look and feel of the fitness and wellness centre is brand new, a new outdoor terrace of +/-700 m² was created at the front of the building and a decision was made to fully replace the almost 20-year-old cooling system.
In Landgraaf, SnowWorld is working together with the municipality on the elaboration of a feasibility study for the further development of the Wilhelminaberg. This is the mountain that SnowWorld Landgraaf is located against. SnowWorld could build a tower on top of the mountain that would not only serve as a landmark for SnowWorld but for the entire region. Part of this study includes the plan to fit the roof of SnowWorld Landgraaf with solar panels. Limited progress was made with regard to the second pillar of SnowWorld’s strategy, creating additional shareholder value by adding new branches, in the reporting year. In both Barcelona and Paris the zoning plan procedures are currently delayed because of elections.
Market position
Indoor skiing
There are approximately 60 indoor ski resorts worldwide. A large proportion of these ski resorts is concentrated in Western Europe in countries including the Netherlands, the United Kingdom, Germany and Belgium.
There are seven indoor ski resorts in the Netherlands, which means there is relatively a large number of these facilities in the country.
SnowWorld has two indoor ski resorts and is market leader in Europe in terms of snow surface, visitor numbers, returns and reputation among international athletes.
This leading position has been realised since 1996 through the focus on hospitality, the quality of the product, such as the snow 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 part in the success.
Approximately twenty million people live within a 1 to 1.5-hour drive from the two locations. The visitors to the location in Zoetermeer are primarily Dutch. The location in Landgraaf does, however, attract not only Dutch but also Belgian (approximately 30.0%) and German (approximately 10.0%) visitors due to its geographic situation.
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 make SnowWorld Landgraaf attractive for ski and snowboard athletes from around the world.
Zoetermeer Landgraaf
Snow surface (m2) 14,400 35,750
Number of slopes 3 5
Longest slope (m) 210 520
Number of lifts 5 7
Number of hospitality facilities 5 9 Surface of hospitality facilities (m2) 3,500 5,000
Number of hotel beds – 420
Surface of health club (m2) 2,900 1,650 SnowWorld operates in the relatively stable indoor skiing market. The Netherlands has had approximately one million skiers/ snowboarders for years (source: Dutch Ski Association). The number of skiers/snowboarders in the rest of Europe is also relatively stable. SnowWorld competes with five other indoor ski resorts that have real snow in the Netherlands and to a lesser degree with indoor ski resorts in West Germany and Belgium. In addition to the indoor ski resorts, SnowWorld experiences competition from dry slopes and ski simulators, of which there are around 15 and 65 respectively in the Netherlands.
SnowWorld is not aware of any concrete plans to build new indoor ski resorts in the Netherlands, Belgium and Germany.
The revenue performance of both the various food and beverage facilities at both indoor ski resorts and the hotel in Landgraaf is closely linked to the development of the number of ski slope visitors. The different food and beverage facilities at both indoor ski resorts face only limited competition from other food and beverage facilities in Zoetermeer and Landgraaf.
Fitness and wellness
SnowWorld is furthermore active in the market for the operation 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 health club in Landgraaf, both centres also focus on a different local target group. SnowWorld faces primarily competition from local fitness centres.
SnowWorld has decided to profile itself even more clearly at the top of the market in the reporting year. The SnowWorld fitness and wellness centres have been converted into health clubs. Health Club Zoetermeer has a completely new look and feel and the latest state-of-the-art cardio Technogym equipment with a new members following system has been purchased. In Landgraaf the look and feel has also been adapted and new equipment with the Technogym members following system has been purchased. At the same time, the subscription structure for both health clubs has been simplified. Outdoor Park
Swot analysis
SnowWorld is and will remain critical with respect to its own performance, strategy and the ensuing opportunities and potential risks (please also refer to page 30 and 31 of this report for information on risk management). SnowWorld uses instruments including a strengths/weakness analysis in order to remain successful in the long term as well (please refer to the diagram below).
Financial developments
Evaluation perspectives 2014/2015
The forecast of the profit development 2014/2015 which we expressed in our previous annual report and in the various press releases over the last financial year, namely the fact that we had a positive outlook and expected a higher operational result than in the 2013/2014 financial year, has been realised.
Revenue and gross margin
SnowWorld’s revenue in the 2014/2015 financial year (1 October 2014 through 30 September 2015) compared to the 2013/2014 financial year dropped fractionally from € 25.8 million to € 25.4 million. Gross margin also declined fractionally to an amount of € 22.9 million (2013/2014: € 23.3 million). The decrease in gross margin is attributable primarily to a lower margin on the ski activities. On the other hand, the gross margin on the hotel activities has increased considerably.
Strengths
Owner and operator of Europe’s largest indoor ski resorts and one of the market leaders worldwide.
Extensive knowledge and many years of experience in the field of developing, building and operating indoor ski resorts. A proven welcoming and inviting leisure concept consisting
primarily of skiing and food and beverage facilities. Access to capital markets.
Opportunities
Growth through opening new locations.
Growth in revenue from consultancy activities based on existing knowledge.
More efficient use of the facilities during the traditionally less busy summer season.
Weaknesses
The management’s limited track record with international expansion.
Relatively high capital requirements. Leisure depends on economic conditions.
Threats
The opening of other indoor ski resorts or leisure activities in the vicinity of SnowWorld.
Change in market conditions in the areas in which SnowWorld is expanding.
(in € x 1,000) 2014/2015 2013/2014 Difference
Revenue Cost price
Gross
margin Revenue Cost price
Gross margin gross margin Ski 13,133 661 12,472 13,766 748 13,018 –4.2% Hospitality 7,507 2,386 5,121 7,510 2,397 5,113 0.2% Fitness 1,607 5 1,602 1,617 9 1,608 –0.4% Hotel 1,837 71 1,766 1,609 69 1,540 14.7% Outdoor 533 – 533 530 – 530 0.6% Other 780 – 780 727 – 727 7.3% Gross profit 25,397 3,123 22,274 25,759 3,223 22,536 –1.2%
Other operating income 646 744 –13.2%
Gross margin 22,920 23,280 –1.5%
Zoetermeer 9,779 1,307 8,472 9,895 1,390 8,505 –0.4%
Landgraaf 15,618 1,816 13,802 15,864 1,833 14,031 –1.6%
Gross profit 25,397 3,123 22,274 25,759 3,223 22,536 –1.2%
Other operating income 646 744 –13.2%
Gross margin 22,920 23,280 –1.5%
Revenue from skiing activities encompasses both the proceeds of the ski passes sold and the revenue from lessons and skiing and snowboarding equipment rental. The number of ski passes sold decreased by 6.9% in the last financial year to 443,600. This also meant a decrease in revenue from equipment rental. The decrease in the number of ski passes sold was slightly greater in Landgraaf than in Zoetermeer. This also explains the stronger decrease in gross profit in Landgraaf compared to Zoetermeer.
The average food and beverage spending per ski pass sold increased by 7.4% in the past financial year. This is primarily attributable to a change in the product range.
The number of members of the health clubs remained stable at 3,600 members in the past financial year. The revenue from fitness and wellness activities is almost equal to that of the previous financial year.
The hotel occupancy rate in 2014/2015 compared to 2013/2014 increased by 6.5% to 62.1%. Also the average room price
increased by 2.7%. This accounts for the increased gross profit for the hotel’s activities.
The number of visitors and consequently the revenue are virtually the same as a year earlier during the third full year of the operation of the Outdoor Park.
The first six months of the financial year (October through March) are the most important by far from a financial perspective for SnowWorld. Around 70.0% of the annual revenue is realised during these months. The number of ski slope visitors is considerably lower in the second half of the year. Important activities during these traditionally less busy summer months are the training sessions for numerous (international) athletes in Landgraaf, the operation of the Outdoor Park in Landgraaf and summer camps in Zoetermeer.
The reverse takeover of 10 December 2013 is processed in the 2013/2014 figures. This has had a once-only effect on the result which is shown here below as follows:
(in € x 1,000) Operating result Costs of reverse Result
2014/2015 2013/2014 takeover 2013/2014
Net revenue 25,397 25,759 – 25,759
Gross margin 22,920 23,280 – 23,280
EBITDA 8,468 8,207 1,437 6,770
Operating result (EBIT) 5,059 4,745 1,437 3,308
1 5 4 4 2 1 3 12 2 6 5 6 9 7 1 4 133 11 3 8 10 1 1 2 3 4 5 2 3 4 5 6 7 8 9 10 11 12 13
EBITDA and EBIT
The operating EBITDA 2014/2015 increased by € 0.3 million (3.2%) compared to 2013/2014. This increase is largely the result of lower operating expenses at € 0.7 million (3.6%). In particular, lower employee expenses and cost of sales are the cause. Employee expenses compared to the 2013/2014 financial year dropped by € 0.2 million (2.8%) due to the decrease in the number of employees. A change in the policy pursued meant the cost of sales compared to the 2013/2014 financial year dropped by € 0.4 million (36.8%).
EBIT nonetheless rose by 6.6% to € 5.1 million also as a result of lower depreciation.
Tax burden
The tax burden in the 2014/2015 financial year is 24.5% and exhibits no particularities. In the 2013/2014 financial year the tax burden was as high as 62.3%. This is due to the fact that a large proportion of the once-only costs connected with the flotation were not deductible for tax purposes. When corrected for this effect, the tax burden in 2013/2014 was 32.8%.
Result after tax
The operating result after tax compared to the 2013/2014 financial year increased by € 0.6 million (31.6%) and amounts to € 2.3 million. The operational net profit per share rose by 16.2% to € 0.79.
Growth in earnings per share
The average number of outstanding shares in SnowWorld N.V. in the financial year 2014/2015 was 2,937,523 (2013/2014: 2,587,265). Net operating profit per share, excluding the effects of the flotation for the 2014/2015 financial year was € 0.79 (in the 2013/2014 financial year € 0.68), which equals an increase of € 0.11 (16.2%) per share. Operating cash flow per share amounted to € 1.93 per share. Group equity per share amounted to € 3.55 at the end of the 2014/2015 financial year, an increase compared to the previous financial year of € 0.35 (10.9%). When the group equity was calculated, the ‘hidden reserves’, if any, understood in the valuation of buildings and sites were not taken into account.
Investments
The investments for the 2014/2015 financial year amount to € 2.3 million. This includes prepayments on the replacement of the cooling system at Zoetermeer of € 0.7 million, the investment in the health club at Zoetermeer, the construction of an outdoor terrace at Zoetermeer and an overhaul of part of the cooling system and some of the ski lifts in Landgraaf. The investments are under the level of the depreciation at € 3.4 million.
The investment in the replacement of the cooling system in Zoetermeer is estimated to be about € 1.8 million. The new cooling system is expected to be put into use in the course of the 2015/2016 financial year.
Operating cash flow
The operating cash flow increased by 4.2% in the past financial year to € 5.7 million (2013/2014 € 5.4 million excluding the once-only costs of the reverse takeover). This increase was primarily the result of the higher EBITDA in the 2014/2015 financial year. Solvency
Equity amounted to € 10.4 million at the end of the 2014/2015 financial year (year-end 2013/ 2014: € 7.4 million). The increase of € 3.0 million (39.2%) is the result of the achieved net operating profit for the financial year (€ 2.3 million), an addition to the other reserves of the costs of a share option and the mutation in the valuation of the interest swap. Per share the equity amounts to € 3.55 at the end of the financial year.
Due to the increase in equity the solvency at the end of the financial year rises to 18.5% (year-end 2013/2014: 13.4%). Guarantee capital increased to 20.2% as at 30 September 2015.
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 € 81.0 million as at 30 September 2015. After deduction of the cumulative depreciation of € 33.9 million, the remaining carrying amount of the land and buildings stands at € 47.1 million. This involves the valuation based on the historical cost price. The current value of the land and buildings, according to a calculation based on the cash value of estimated future cash flows, amounts to € 69.6 million. This amount is € 22.5 million higher than the valuation based on the historical cost price. For more information, please refer to page 59 of this annual report.
Financing
SnowWorld Leisure N.V. has a credit arrangement with ABN AMRO bank. This arrangement is the main source of financing for SnowWorld. Ratios have been agreed with the bank with respect to a minimum level of guaranteed assets and a maximum total net debt/EBITDA ratio and a minimum debt service capacity ratio (DSCR). The credit arrangement contains a schedule for the next few years to raise the ratios at the level of SnowWorld Leisure N.V. up to the next level: a minimum guarantee capital of 30.0%, a maximum total net debt/EBITDA ratio of 2.5 and minimum Debt service capacity ratio (DSCR) of 1.0. At the end of the 2014/2015 financial year SnowWorld complies with the ratios agreed for this year.
SnowWorld’s total interest-bearing debt (excluding the interest-rate swap) decreased by more than € 3.4 million to € 36.0 million in the financial year 2014/2015 (2013/2014: € 39.4 million).
Optional dividend
The combination of improved results and consolidation of the financial position offers the possibility of paying out a dividend for the first time in SnowWorld’s listed existence. A proposal will be made to the General Meeting of Shareholders to be held on 11 March 2016 to pay out an optional dividend of € 0.18 per share. This proposed dividend implies a pay-out percentage of 22.8%. Shareholders will be given the choice of receiving the dividend in cash or in shares. They can choose between € 0.18 cash or 1 new share for every 35 existing shares. Major shareholders, holding 88.0% of the shares together, have already indicated that they will opt for the stock dividend. In the long term, SnowWorld’s dividend policy provides for a pay out of 30.0 to 50.0%. The intention is to increase the pay-out percentage next year.
Events after the balance sheet date
At the end of October 2015 proceedings were brought at the Council of State with the purpose of annulling the zoning plan modified by the municipality of Zoetermeer and the environmental permit granted to SnowWorld allowing for the extension of the third slope at Zoetermeer. SnowWorld views the proceedings with confidence. SnowWorld does not consider an impairment for the costs incurred for the development of the plans necessary. There are no further events after the balance sheet date that materially affect the financial statements.
Progress on new construction projects
SnowWorld is currently developing four construction projects. These entail replacing the cooling system at its Zoetermeer location, lengthening the third slope at the location in Zoetermeer and the developments of new locations in Paris and Barcelona. Replacement cooling system Zoetermeer
Lengthening the third slope in Zoetermeer
The current third slope in Zoetermeer is 210 metres in length. SnowWorld plans to lengthen it to 300 metres. The objective of lengthening the slope is two-fold: to increase the number of visitors and to extend the average amount of time visitors spend at the ski resort.
In September 2015, the Municipal Executive of Zoetermeer granted the environmental permit for lengthening the third slope. Meanwhile, the Buytenpark Quality Team has objected to this permit being issued and the amendment of the zoning plan at the Council of State. SnowWorld views the proceedings with confidence. SnowWorld expects to commence construction in the year 2016, after which the extended slope will open in September 2016. The estimated investment, including the costs incurred in the past, amounts to approximately € 10.0 million. Extensive talks have been going on with ABN AMRO for the financing of this project. SnowWorld expects the investment to provide a substantial contribution to SnowWorld Zoetermeer’s EBITDA.
Paris
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 snowboarders live than in the whole of the Netherlands. The planned indoor ski resort is a copy of the operational SnowWorld concept in Landgraaf (ski resort including hotel and Outdoor Park). Agreements have been made with important and well-versed business partners such as Bouygues and SKISET. The location for the envisioned indoor ski resort is Elancourt, a suburb of Paris within the agglomeration of Saint Quentin and Yvelines.
In the reporting year, the procedure for amending the zoning plan was commenced. The Mayor of Elancourt suspended this procedure for political reasons related to upcoming elections until further notice. Once this procedure is completed, the building permit can be obtained quickly since the preparatory work for it has already been completed.
Based on the current planning SnowWorld Paris could open in September 2018. Based on an estimated investment of approximately € 55.0 million and a well-considered financing mix, it is expected to make a positive contribution to the earnings per share.
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. The planned concept includes, in addition to two ski slopes, two ice skating rings and a hotel with 200 rooms. The planned location for SnowWorld Barcelona is near the port area. A LNG terminal is located in this area that currently ‘dumps’ most of its available cooling output into the Mediterranean Sea. Part of this cooling output will be made available to SnowWorld, which means it will not have to produce its own cooling energy.
Currently the procedure for adjustment of the zoning plan is ongoing. This procedure has been temporarily halted however in the run-up to the May 2015 elections. SnowWorld is now working on a lobby to the new Mayor of Barcelona to show that it is a very good project for the city of Barcelona. As soon as the Mayor is behind the plan, the zoning plan procedure can be completed. The application for the building permit has to be prepared subsequently. Based on the current planning SnowWorld Barcelona would also be able to open its doors in September 2018.
Based on an investment of approximately € 45.0 million and a well-considered financing mix, SnowWorld Barcelona is expected to contribute positively to the earnings per share.
The planning of the development of Paris and Barcelona is currently running parallel. SnowWorld will not, however, build two locations simultaneously. Given the size of the projects, the Executive Board of SnowWorld is opting for sequential development. A delay may arise with one of the projects that will cause it to fall behind the other project. If this does not occur, the Executive Board of SnowWorld will make a choice together with the Supervisory Board as to which project will be carried out first.
With respect to the project in Barcelona, talks regarding the project are already underway with interested banks and local investors. For more information concerning the planned structure of the financing, please refer to page 10 of this annual report.
Organisation and employees
General
SnowWorld has a decentralised organisational structure. The locations in Landgraaf and Zoetermeer are stand-alone ski resorts that are led by location managers. These location managers, together with their management teams, are responsible for their own activities and results. Marketing and sales and other support services such as human resources, accounting and IT are coordinated centrally.
SnowWorld attaches a great deal of importance to the further development of the organisation and its employees’ talents in order to continually improve all aspects of the services. There is also a focus on ensuring sufficient development at the management level, which includes the location managers, with the objective of further reducing the dependence on the key officers (Mr J.H.M. Hendriks and Mr W.A. Moerman). There are (internal) education and training programmes at lower levels in the organisation, for example for employees who have just joined the company.
Corporate social responsibility
Corporate social responsibility forms an integral part of SnowWorld’s day-to-day activities. This corporate social responsibility spans numerous aspects of the business operations, such as caring for the environment, which includes saving energy, and social aspects such as sponsoring athletes and offering possibilities for people with a disability to participate in sports and offering sustainably produced food.
SnowWorld is aware of its responsibility vis-à-vis the environment. This involves both the daily consumption of gas, water and electricity, waste flows and the use of coolants.
Electricity consumption
SnowWorld is constantly looking for new possibilities for saving energy. This year a number of measures were taken that lead to lower consumption. In Landgraaf adjustments were made to the cooling system, which lead to considerable savings in electricity consumption. New dishwashers were put into use in both Zoetermeer and Landgraaf. Compared to the old installations these consume much less electricity, water and detergent. In Zoetermeer all lighting in the car park has been replaced with LED lighting. The new Technogym cardio equipment put into use in the health club in Zoetermeer in December 2014 returns electricity back to the grid if in use.
The planned investment in a new cooling system in Zoetermeer is going to contribute significantly to corporate social responsibility. This system not only ensures a saving on the consumption of electricity but the coolant R22 is also not used in this system. The released heat produced when producing the cold for the slopes can be used to heat the restaurants and rooms. In Landgraaf, this technique has been used to heat the hotel for years.
SnowWorld already uses LED lighting in its restaurants, rooms and its car park where possible. The results of the tests that have been carried 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 closely tracking these developments.
The potential for installing solar panels on the roofs of the SnowWorld locations is also being studied. The roofs of the slopes in Landgraaf are particularly well-positioned for this form of energy generation. A concrete project is currently being worked out. The energy that SnowWorld uses is generated sustainably using water, wind or biomass.
Waste flows
SnowWorld’s business activities generate various waste flows. This involves primarily waste from the restaurants. SnowWorld separates waste into paper, glass, (frying) oil, food waste and residual waste. Number of employees
SnowWorld had an average of 233 FTEs in the 2014/2015 financial year, compared to 241 in the 2013/2014 financial year. In view of the strongly fluctuating seasonal pattern, more than 800 people work at SnowWorld’s locations during peak periods. Based on the total number of employees in December 2014, 37.1% of the employees have a permanent employment contract and 62.9% have a temporary contract. 56.3% of the employees are men and 43.7% are women. Absenteeism at SnowWorld was somewhat higher at 2.8% than in the 2013/2014 financial year at 2.4%, but is still very low compared to the average percentage in the Netherlands.
The average number of employees (in FTEs) per activity:
2014/2015 2013/2014 Ski 79 83 Hospitality 73 76 Fitness 24 21 Outdoor 6 6 Other 51 55 Total 233 241
The average number of employees per location:
2014/2015 2013/2014
Zoetermeer 104 107
Landgraaf 129 134
Total 233 241
Terms of employment
The employees of SnowWorld do not fall under a Collective Labour Agreement. SnowWorld has its own terms of employment package and pension scheme. The terms of employment include a provision allowing employees to use the fitness and health clubs. SnowWorld encourages them to use these facilities. SnowWorld does not have a Works Council.
Company safety
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 has commissioned the replacement of the R22 cooling system. The new system will be suitable for the use of less environmentally harmful ammonia. Measures have been taken in order to ensure the continuity of cold production in the event of a disaster until the new system is put into use.
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 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.
SnowWorld also sponsors a number of top athletes and sporting talents, including:
Dimi de Jong; Floor van Ameyde; Michelle Dekker; Joey van Noort; Milina van Unnik; and Steve Krijbolder.
Contact with local residents
The indoor ski resort in Landgraaf is located directly on the edge of a residential area. SnowWorld remains in periodic contact with representatives of the neighbourhood. The purpose of these contacts is to inform each other about developments and to prevent any potential nuisance as much as possible.
Sports and exercise
SnowWorld’s core activities are aimed at sports and exercise. Within this framework, SnowWorld conducts an active policy designed to enthuse young people to enjoy skiing or snowboarding at SnowWorld. Numerous schoolchildren are given the opportunity to become acquainted with snow sports at sharply reduced rates every year. Children are also encouraged to take up sports and exercise during birthday parties or summer camps that are led by professionals.
Internships
SnowWorld provides many 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.
Sustainably produced food
Action plans 2015/2016
Strategic
Realisation lengthening third slope in Zoetermeer
Further development of new projects in Paris and Barcelona Completion of feasibility study development of Wilhelminaberg
Landgraaf. Financial
Implementing dividend policy. Operational
‘Road to Pyeongchang’, where the Winter Olympics will be held in 2018, in October-November 2015, comprising:
• The International Paralympic Committee Alpine Skiing (IPCAS) race
• EC slopestyle (European championship for a snowboard discipline)
• National championship alpine skiing • FIS competition snowboard alpine • French indoor youth championship
Carrying out the construction of the cooling system in Zoetermeer.
Outlook
We have a positive outlook for the year 2015/2016. Consumer confidence has increased in the past year and the economy is picking up. With our efficiently set up operation, we expect a higher result after tax for the 2015/2016 financial year.
Furthermore, SnowWorld expects to maintain an investment level in the coming financial year in terms of regular replacement investments that corresponds with the average of the last couple of financial years. In addition, approximately € 1.1 million will be invested in the construction of the new cooling system in Zoetermeer and the bulk of the investment is expected to be in the lengthening of the third slope in Zoetermeer at € 10.0 million in the coming financial year.
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.
d Financing. SnowWorld Leisure N.V. has entered into a credit
agreement with ABN AMRO. The facility entails obligations in terms of repayments and interest payments. It also includes ratios with regard to a minimum level of guaranteed assets, a maximum level for the net debt/EBITDA ratio and a minimum level for the debt service capacity ratio (DSCR). SnowWorld monitors these ratios on a monthly basis. SnowWorld complies with these ratios. Any consequences of a failure to meet these ratios will be decided on by the bank at such time as a situation of default exists.
d Interest rates. The interest-bearing debts comprise mainly
debts to credit institutions. These debts to credit institutions carry a variable interest rate, consisting of a 1-month Euribor rate increased by a fixed interest surcharge. An interest-rate swap has been concluded to mitigate interest rate risks, and therefore the interest on a significant part of the interest-bearing debt is fixed. The policy is not to trade in financial derivatives but to use them only to hedge risks.
d Laws and regulations. The activities of SnowWorld are affected
by numerous laws and regulations, for instance concerning the flotation of SnowWorld, but also the granting of permits and regulations in the field of safety and fire safety. Changes in tax laws, for instance with regard to VAT or social security charges, can immediately affect SnowWorld’s results. SnowWorld has various sources of information that provide it with early notification of significant changes in laws and regulations so that, where possible, suitable measures can be taken. No (potential) changes in laws and regulations are currently known that could materially affect SnowWorld’s results. d Environment. The commercial operation of indoor ski resorts
involves environmental risks. These mainly concern the use of coolants for cooling the ski slopes. Owing to changes in laws and regulations the topping up of R22, the coolant used at the Zoetermeer location, is no longer permitted with effect from 1 January 2015. The Executive Board of SnowWorld has commissioned replacement of the system in Zoetermeer for the use of a different coolant. The new cooling system is expected to be put into operation in spring 2016. Measures have been put in place for the intervening period to ensure the continuity of the cooling output. SnowWorld has concluded a multi-year maintenance agreement with a specialised cooling maintenance company that safeguards that the systems will permanently be in optimum condition so that the environmental risks are minimised.
SnowWorld’s risk management and control system is designed to provide insight into the degree to which the strategic and operational objectives can be achieved, the financial reporting is reliable and the relevant laws and regulations are complied with. Doing business intrinsically means incurring risks but the policy is designed to prevent or otherwise mitigate them, and to do so in relation to the likelihood that the risks will materialise and to the associated impact.
The current risk management and control system can be described as follows, in outline: the revenue of each location is reported on a daily basis and the various other performance indicators are reported on a weekly basis, including the development of the liquidity premium (hours worked and average hourly wages) in relation to the revenue, the (forecast of the) hotel occupancy, changes in the numbers of members of the health clubs as well as the packages booked and outstanding offers. The results achieved are reported on a monthly basis and discussed with the location managers by the Executive Board. If necessary the forecast for the full year is adjusted.
The Executive Board of SnowWorld reports the key performance indicators to the Supervisory Board on a monthly basis. Every quarter, the Executive Board presents a financial report with notes and forecasts to the Supervisory Board. The Executive Board exemplifies the budget at least once a year. The Supervisory Board meets at least four times a year to discuss matters including the submitted reports.
Every year the external auditor reviews, insofar as relevant for the audit of the financial statements, the design, existence and effective operation of the risk management and control system and reports his findings thereon to the Executive Board and the Supervisory Board. The report for 2014/2015 comprises findings that indicate not so much serious shortcomings as recommendations for improvements. The recommendations have been followed up where possible.
The risks arising from the strategy, financial reporting, operations and compliance, in relation to the company’s objectives, are continually identified and analysed and if necessary controls are implemented to limit the risks. This is documented in a risk monitoring instrument and discussed with the Supervisory Board by the Executive Board. The principal risks are:
