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BUSINESS COMBINATIONS
Acquisition of the Spanish cinemas Abaco Cinebox and
Abaco Alcobendas
On 1 April and 11 June 2014 the Group acquired control of
the Spanish cinemas Abaco Cinebox (Alicante) and Abaco
Alcobendas (Madrid), the two largest cinemas of the
former Spanish cinema group Abaco Cinebox. Kinepolis
targets a recovery of its historic visitor numbers in Spain
and thus a better coverage of its general operating costs.
Agreement was reached with the liquidators on the sale of
both cinemas, for € 1.1 million. The transactions were
ratified by the competent judical authorities. Furthermore,
the Group entered into new lease agreements with the
property owners of these cinemas, the conditions of which
are linked to visitor numbers. In 2013 the two cinemas
together welcomed 926 000 visitors. In the future
Kinepolis aims to achieve an EBITDA contribution of € 1 to
€ 1.5 per visitor for these leased cinemas.
The inclusion of the Spanish cinemas Abaco Cinebox
(Alicante) and Abaco Alcobendas (Madrid) in the consolida-
tion scope of the Group in April 2014 (Kinepolis Plaza
Mar 2) and June 2014 (Kinepolis Alcobendas), the dates on
which control was acquired, resulted in a goodwill of
€ 0.5 million. The origin of this goodwill is the targeted
visitor potential of both cinemas.
The transaction costs linked to this acquisition were
€ 0.2 million and were recognized in profit and loss as part
of the administrative costs.
Since the inclusion of the two cinemas in the consolidation
scope, they have contributed € 4.3 million to revenue and
€ 0.1 million to the result of the Group. If the acquisition
had occured on 1 January 2014, management estimates
that the consolidated revenue would have been
€ 265.2 million and the consolidated result of 2014 would
have amounted to € 35.2 million.
Acquisition of the Dutch Wolff Bioscopen group
On 22 July 2014 the Group acquired 100% of the shares of the
Wolff Bioscopen group. Kinepolis acquired nine cinemas in the
Netherlands (Huizen, Groningen, two sites in Enschede,
Rotterdam, Nieuwegein and three sites in Utrecht). Kinepolis
also acquired two new construction projects, one multiplex in
Utrecht and one multiplex in Dordrecht. The Wolff group is
also active as a film programmer and purchasing center for
third party cinemas, a business that has also been acquired.
By acquiring Wolff Bioscopen the Group added a new country
to its existing portfolio of cinemas in Belgium, France, Spain,
Switzerland and Poland.
The Wolff cinemas in operation at year-end welcomed
1.6 million visitors in 2013. The cinemas are leased from third
parties. In 2013 all Wolff cinemas together generated a
normalized EBITDA of € 2.1 million.
A fixed consideration of € 10.6 million was paid for the
existing Wolff cinemas, the film programming and purchasing
centre activities and the projects in progress in Utrecht and
Dordrecht. The value of this amount remains subject to
change because a number of price adjustments at acquisition
date could not be fully determined yet. The initial accounting
for this business combination has therefore not yet been
completed.
The contract also stipulated a number of contingent consider-
ations, depending on the following factors:
★
★
Whether or not the new-build project in Utrecht will be
completed;
★
★
Whether or not an amended planning permission will be
obtained for the new construction project in Utrecht;
★
★
The actual number of visitors of the new cinema in
Utrecht, three years after opening;
★
★
Whether or not the leases of the existing cinemas in
Utrecht, Nieuwegein and Rotterdam are cancelled by the
owner within a given term.
Goodwill per cash generating unit
IN ’000 €
2013
2014
Belgium
6 586
6 586
France
3 299
3 299
Spain
2 374
2 858
The Netherlands
16 871
Poland
6 502
6 502
TOTAL
18 761
36 116
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05 / FINANCIAL REPORT
KINEPOLIS GROUP
ANNUAL REPORT 2014