REAL CLUB CELTA DE VIGO, S.A.D. 2017/2018 Season...sports and commercial complex by Real Club Celta...

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REAL CLUB CELTA DE VIGO, S.A.D. 2017/2018 Season

Transcript of REAL CLUB CELTA DE VIGO, S.A.D. 2017/2018 Season...sports and commercial complex by Real Club Celta...

REAL CLUB CELTA DE VIGO, S.A.D.

2017/2018 Season

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INDEX

1. Financial Report 2017/2018 Season,

2. Audit Report and Annual Accounts 2017/2018 Season,

3. Annual Accounts at 30 June 2018:

a. Balance Sheet at 30 June 2018 and at 30 June 2017,

b. Profit and Loss Account at 30 June 2018 and 30 June 2017,

c. Statement of Changes in Net Worth at 30 June 2018 and 30

June 2017,

d. Cash Flow Statement at 30 June 2018 and 30 June 2017,

e. Annual Report at 30 June 2018.

4. Management Report at 30 June 2018.

REAL CLUB CELTA DE VIGO, S.A.D.

Financial Report

2017/2018 Season

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INDEX

1. BRIEF INTRODUCTION. ______________________________________________________ 5

2. EVOLUTION AND STRATEGY OF THE COMPANY. _________________________________ 7

2.1. RECAPITALISATION OF THE COMPANY. ________________________________________ 8

2.2. STRATEGIC INVESTMENT PLAN. _______________________________________________ 9

2.3. BRAND POSITIONING AND GLOBALISATION ____________________________________ 11

3. INCOME. ________________________________________________________________ 12

4. OPERATING EFFICIENCY. ___________________________________________________ 14

5. RATIOS. _________________________________________________________________ 16

a. Economic profitability. _________________________________________________________ 16

b. Financial Profitability. __________________________________________________________ 17

c. Debt. ________________________________________________________________________ 18

d. Guarantee or total solvency. _____________________________________________________ 19

e. Liquidity. _____________________________________________________________________ 20

f. Working capital. _______________________________________________________________ 21

6. EXTERNAL VISIBILITY. ______________________________________________________ 23

7. QUALITY MANAGEMENT. __________________________________________________ 24

8. ANNEXES: _______________________________________________________________ 26

a. Balance Sheet. ________________________________________________________________ 26

b. Profit and Loss Account. ________________________________________________________ 28

c. Budget for the 2017/2018 Season. ________________________________________________ 29

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1. BRIEF INTRODUCTION.

In the 2017/2018 season, the company has continued to post good Financial Results achieved over

the last few years, and in this season in particular with pre-Corporation Tax profits of over 17

million euros, giving a net profit of 12,975,079.43 euros for the period.

These good results also offer very good Financial Profitability (20.23%) and Economic Profitability

(15.16%) ratios and are well above the average for the sector in which the company operates,

validating its greater efficiency compared to the rest of companies.

The profit figure for the last 5 seasons is almost 66 million euros net.

The company has opted not to distribute profits, meaning that the figure of Net Worth has grown

significantly with an accumulated rate of 490% for the last 5 seasons, exceeding 70 million euros in

June 2018, with a share capital figure of 3.7 million euros.

One of the consequences of this is that already in the 2016/2017 season, the capitalisation ratio of

the club (Net Worth/Total Liabilities) exceeded 50%, offering a solid and consistent wealth profile

with which to embark on new projects. At June 2018 the capitalisation ratio is 61.88%.

It is these positive results and the capitalisation thereof that makes it possible to implement the

Strategic Investment Plan that the company has been developing in all areas of the club, both

sporting and non-sporting. The accumulated investment figure for the last 5 years is in excess of 85

million euros, 27.5 million euros in the 2017/2018 season, of which in the last year 83.92%

correspond to the purchase of players, maintaining the cycle of the company and increasing the

valuation of its assets.

While it is true that, although the market value of our playing staff in the 2017/2018 season, was in

excess of 100 million euros, the same on the balance sheet totalled 34 million euros, a significantly

lower valuation given that, among other things, it does not include the players of the “academy”,

renowned in Spain and around Europe.

We would also make special mention of the inauguration in March 2018 of A Sede, the new

building, situated in the centre of Vigo, owned by Real Club Celta, also home to its registered seat

and offices, with a variety of businesses already fully up and running: health clinic, restaurant, multi-

brand shop, multi-purpose hall, gastrobar and residence for underage players.

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This season we also chose what the architectural project for the new sports village will be,

commissioned to Estudio Irisarri-Piñera, SLNEP. And in January 2018 the agreement with the

common land association was signed, establishing the basis for the operation to acquire the land on

which the new sports complex is to be developed.

As for the level of Debt, which makes it possible to measure the degree of dependence or

independence of the company according to its financial resources and its greater or lesser degree of

financial autonomy, the total ratio is less than 1, with the main sources of financing being the

company's own equity, which entails minimising the financial expense of the same.

In addition to this, the club offers a very solid image of Solvency, because its total assets are 2.62

times its liabilities, with a positive Working Capital of more than 22 million euros, at closing June

2018.

All these number confirm Real Club Celta's status as a “rara avis” in Spanish football as far as

its economic and financial area is concerned, being one of the few First Division clubs

without a net debt and with the best efficiency ratios.

All of these circumstances are encouraging and act as leverage enabling us to continue embarking on

projects that help the club grow in all areas with the necessary financial solidity.

Conscious of the growth and complication of the business, we have also established the objective of

standardising work processes and working in a total quality environment. In this regard, in the

formulation of the annual accounts of last season, we obtained the ISO 9001:2015 certificate in

the Finance Department, which was extended on the date of formulation of these annual accounts to

the same department of group company Afouteza e Corazón, S.L.U. which operates different areas

of business.

In conclusion, we highlight that all these achievements stimulate and motivate us to continue working

on the growth and constant improvement of the club, with the idea of ensuring the stability and

future growth of the RCCelta project in a solvent manner.

Next season, we will be working with a prudent budget which, at the date of formulation of these

annual accounts and management report has already been improved in terms of expected income in

some areas, so as to guarantee progress in financial terms on the projects the club currently has

underway.

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2. EVOLUTION AND STRATEGY OF THE COMPANY.

Real Club Celta de Vigo, S.A.D. has consistently posted positive financial returns over the last 5 years, as

can be seen from the following chart:

These profits represent an accumulated total of over 65 million euros and have been capitalised in full,

without a distribution of dividends, enabling the company to assume ambitious future challenges, with the

solvency necessary to do so successfully.

On an operational level, the company is working to a Strategic Plan which focuses on three areas:

• Capitalisation of the company,

• Strategic Investment Plan, and

• Brand positioning and globalisation.

5.231 14.8469.850

23.070

12.975

5.231

20.078

29.928

52.998

65.973

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

S 2013/2014 S 2014/2015 S 2015/2016 S2016/2017 S2017/2018

thousand € Season and Accumulated Results

Result for the season Accumulated results

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2.1. CAPITALISATION OF THE COMPANY.

The Net Worth of a company represents the equity of the same and offers a measurement of the

value of a company in accounting terms.

In the case of Real Club Celta de Vigo, S.A.D., the ongoing generation of profits over the last few

seasons and the constant policy of not distributing dividends, has allowed the company to be

capitalised, with the net worth at 30 June 2018 reaching 70,146,270.96 euros.

In the last 5 years net worth has increased by 490%.

The recapitalisation of the company means that it is more solvent and also has greater financial

autonomy as its dependence on both long- and short-term external financing is reduced, being able

to use its equity to reach the targets set.

11.895.181

27.015.356

35.969.342

58.105.028

70.146.271

0

20.000.000

40.000.000

60.000.000

80.000.000

100.000.000

120.000.000

S 2013/2014 S 2014/2015 S 2015/2016 S 2016/2017 T 2017/2018

Net Worth

Total Assets (TA) Total Liabilities (TL) Net Worth = TA-TL

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If we analyse the capitalisation ratio (Net Worth / Net Worth and Total Liabilities), we can see that

both RCCelta and La Liga are in a period of financial equilibrium after leaving behind the situation of

imbalance experienced in past seasons.

2.2. STRATEGIC INVESTMENT PLAN.

Like any other company, public limited sports companies need to invest in order to maintain their

business cycle.

Celta's vision is that of a global company, and as such its investments have been made

simultaneously in all areas of the club.

The accumulated total figure of investment for the last 5 seasons exceeds 75 million euros and has

involved both tangible and intangible fixed assets.

12,43%

8,80%

22,61%

14,00%

38,00%

17,00%

45,95%

23,70%

56,57%

23,50%

61,88%

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

70,00%

RCCELTA AVERAGE

Capitalisation Ration Comparison (NW/(NW+TL))

S 2012/13 S 2013/14 S 2014/15 S 2015/16 S 2016/17 S 2017/18

Source: Financial-Economic Report on Professional Football 2017 (LaLiga)

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As we are a public limited sports company, the majority of the investments made are related to the

purchase of players, which together with what the Club's own academy, renowned in Spain and

Europe, produces, makes it possible to maintain and significantly increase the valuation of these

assets.

In the 2017/2018 season, the market value of the players exceeded 100 million euros, while in the

2018/2019 season the market value of the players is in excess of 142 million euros, which gave a

significantly lower value in the Balance Sheet of the company (34 million at June 2018); this is

significant and was highlighted by the auditors in their report as the value of academy players is

zero, because there is no purchase price involved.

At present, the Real Club Celta de Vigo, S.A.D. Strategic Investment Plan focuses on three

objectives:

1.849.756

12.894.360

32.743.538

47.910.042

75.442.785

0

10.000.000

20.000.000

30.000.000

40.000.000

50.000.000

60.000.000

70.000.000

80.000.000

S 2013/2014 S 2014/2015 S 2015/2016 S 2016/2017 S 2017/2018

Investments by Season

Investment in players Plaza B investment

Tangible fixed asset investment Accumulated ADDITIONS

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• Business Center, for which we have already destined over 7 million euros to the

purchase and refurbishment of the building on Calle del Príncipe and currently the

company's corporate and tax domicile, known as A Sede, in which several business not

directly related to the activity of the Sports public limited company are operating: a

restaurant, health clinic, multi-brand store, multi-purpose hall, gastrobar and residence for

underage players.

• Sports village project, in relation to which, on 18 January 2018, an agreement was signed

between the Communal Land Association of the Parish of Pereiras (Mos) and the company

establishing the basis for the operation of agreed acquisition in the context of an

expropriation procedure on the "Montes de Pereiras" estate for the development of a

sports and commercial complex by Real Club Celta de Vigo, S.A.D.

Moreover, the assignment of the in rem surface rights is agreed between the Communal

Land Association of the Parish of Pereiras (Mos) and the company, in relation to the

“Montes de Pereiras” estate, exclusively for the construction of buildings and facilities

whose main and/or auxiliary function is the practice of sporting activities linked to the

corporate object of the company.

• Football stadium, currently being refurbished.

2.3. BRAND POSITIONING AND GLOBALISATION

Real Club Celta is much more than a football team, as a public limited sports company it aspires to

attain sporting excellence with social commitment thanks to its Foundation and a brand image and

positioning that is increasingly global.

In addition to these 3 lines of work, in recent years the company has devoted part of its effort to

reducing its debt and, in particular, the INSOLVENCY DEBT. It was on 4 July 2008, following a far-

reaching accounting review that the company declared itself insolvent, with the amount of the

insolvency debt, according to the report by the receivers, at 67,520,637.12 euros.

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Since approval of the proposed arrangement by Commercial Court No. 1 in Pontevedra, on 20 July

2009, the company has not only duly complied with the schedule of insolvency debt payments, it has

even accelerated compliance with the same.

The amount of the insolvency debt, at 30 June 2018, totals 367,252.86 euros and corresponds to

subordinated debt that will be cancelled in the next two seasons.

3. INCOME.

The company's income currently comes from the following business areas:

• Audio-visual,

• Advertising and Marketing,

• Season Ticket Holders and Ticket Office, and

• Sales of Players.

In addition to the extraordinary income shown under the heading of “Other results” of the profit

and loss account.

The company has been achieving a constant increase in its total turnover, particularly in the

2017/2018 Season with an increase of 75.56%, on the previous season, due to income from ticket

sales and season ticket holders due to participation in the UEFA Europa League.

The following table contains a breakdown of the income obtained in the last 5 seasons:

Description Insolvency debt

amount

Credits with special preference 8,336,503.09

Credits with general preference 19,345,904.67

Ordinary credits 27,511,357.01

Subordinated credits 12,326,872.35

Total insolvency debt

amount 67,520,637.12

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As for future evolution, the company is making a major effort to strengthen the current income

structure on the one hand, so that it has greater independence and autonomy, for which reason it is

investing to diversify and develop new business areas, as well as improving the current structure

with investments in players and improvement projects that make it possible to enhance the

satisfaction of season ticket holders and fans.

The income for the season includes the net turnover which represents 78.10% (77.90% the

previous season), which is the basis for the company's income.

0

10.000.000

20.000.000

30.000.000

40.000.000

50.000.000

60.000.000

70.000.000

80.000.000

S 2012/2013 S 2013/2014 S 2014/2015 S 2015/2016 S 2016/2017 T 2017/2018

Net Turnover

Competition income Season ticket income Broadcast income

Advertising income Marketing income

Income Season 2013/2014

Season

2014/2015

Season

2015/2016

Season

2016/2017

Season

2017/2018

Audio-visual 21,876,937 22,015,971 33,210,759 47,573,750 48,907,931 Advertising and shops 5,439,760 4,969,583 5,743,091 5,808,284 6,116,070 Players 234,807 12,503,815 5,664,465 18,773,509 15.369.729 Season and other tickets 5,226,606 5,230,214 8,061,308 21,407,303 7,046,774 Extraordinary 1,417,256 3,344,426 1,077,129 814,839 213,313 Total Income 34,195,367 48,064,008 53,756,751 94,377,684 77,653,818

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4. OPERATING EFFICIENCY.

Operating efficiency is the most commonly-used indicator to show the future viability of a public

limited sports company or football club. This variable compares the salary costs (expenditure on

playing staff, non-playing staff) incurred by the company with the total income for the season. It is

usually calculated by subtracting from the total income, that derived from player transfers (Adjusted

Operating Efficiency).

The lower the ratio, the more efficient the company.

When the operating efficiency ratio is below 50% the company is deemed to be on the threshold of

excellence. The maximum level recommended by the European Club Association is lower than 70%.

49,33% 50,41% 50,49% 51,34%

45,03%

32,99%

49,09%43,80% 43,36%

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

S 2013/2014 S 2014/2015 S 2015/2016 S 2016/2017 S 2017/2018

Operating Efficiency

La Liga Operating Efficiency= Salary Costs/Total Income

RCCeltaOperating Efficiency= Salary Costs/Total Income

Source: 2017 Professional Football Economic-Financial Report (LaLiga)

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45,05%42,21%

53,98% 53,18% 52,32%

60,75% 61,34%

58,05%59,00%

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

70,00%

S 2013/2014 S 2014/2015 S 2015/2016 S 2016/2017

Adjusted Operating Efficiency

RCCelta Adjusted Operating Efficiency=Salary Costs/(Total Income-player transfer profit)

LaLiga Adjusted Operating Efficiency=Salary Costs/(Total Income-player transfer profit)Source: 2017 Professional Football Economic-Financial Report (LaLiga)

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5. RATIOS.

Ratios, taken by themselves, in isolation, have no informative value and it is necessary to compare

them either with their own evolution over several seasons or with identical ratios in the company's

sector.

It is not just the Board of Directors of a company that is interested in the analysis of the financial

statements of the company, there are other financial agents who also have an interest, such as

shareholders, creditors, financial institutions, other companies in the sector.

The most representative ratios of a company are, among others:

a. Economic profitability.

This is obtained by comparing the profit obtained by the activities performed by the

company before interest and tax and the total amount of capital committed to obtaining it,

that is, the investments made by the company.

Economic profitability measures the degree of efficiency of the company when it comes to

using its economic resources or assets to obtain profits.

It is clearer that the higher the ratio, the better, as it will indicate higher "productivity" of

assets and a more efficient company, while a lower ratio may indicate an excess of

investment (assets) and other causes and, therefore indicate lower "productivity". As such,

it is interesting to compare it with other companies in the sector and contrast its evolution

over time.

The following chart shows a comparison of the economic profitability of RCCelta and the

clubs and SADs in La Liga (LaLiga Santander and LaLiga1|2|3) for the LAST 4 seasons.

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At closing 2017/18 the financial profitability was 15.16%

b. Financial Profitability.

This is obtained by comparing after-tax profits and net worth.

Financial profitability measures a company's capacity to remunerate its shareholders. In this

regard, the companies that assume more risks tend to have higher financial profitability

which serves to offset the investment risk assumed by the owners.

The following chart shows a comparison of the financial profitability of RCCelta and the

clubs and SADs in La Liga (LaLiga Santander and LaLiga1|2|3) for the 2016/2017 season and

the 2015/2016, 2014/2015 and 2013/2014 seasons:

15,61%

6,09%

27,82%

4,67%

16,17%

6,11%

30,04%

5,44%

15,16%

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

35,00%

RCCELTA AVERAGE

Economic Profitability Comparison (PAT/TA)

S 2013/14 S 2014/15 S 2015/16 S 2016/17 S 2017/18

Source: 2017 Professional Football Economic-Financial Report (LaLiga)

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The financial profitability of the company in the 2017/18 season was 20.23%.

c. Debt.

Indebtedness is of major importance when it comes to analysing the financial situation of

the company in the long term. The debt ratio makes it possible to measure the degree of

dependency that a company has according to the origin of the financial resources it uses.

This ratio indicates, in relation to each monetary unit of own funds contributed to the

activity, how much outside resources are used.

One fundamental rule is that the total debts incurred by the company should never exceed

the value of the net worth. According to this, the value of the debt coefficient should never

be more than one, with values of less than one being advisable. The main source of financing

is the net worth, with the total debts of the company on a secondary plane and optimising

the financial expenditure figure.

In view of the chart, the company maintains financial equilibrium.

53,85%

40,70%

76,31%

25,20%

31,28%

18,70%

49,05%

15,32%

20,23%

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

70,00%

80,00%

90,00%

RCCELTA AVERAGE

Financial Profitability Comparison (NP/(average NW))

S2013/14 S 2014/15 S 2015/16 S 2016/17 S 2017/18

Source: 2017 Professional Football Economic-Financial Report (LaLiga)

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d. Guarantee or total solvency.

This measures the capacity of the company as a whole to honour all the obligations

assumed. This financial equilibrium is obtained by comparing assets with the realisation value

against all liabilities, regardless of maturity.

0

3,42

1,63

1,180,77 0,62

0

0,5

1

1,5

2

2,5

3

3,5

4

0 €

10.000.000 €

20.000.000 €

30.000.000 €

40.000.000 €

50.000.000 €

60.000.000 €

70.000.000 €

80.000.000 €

S 2013/2014 S 2014/2015 S 2015/2016 S 2016/2017 S 2017/2018

Debt Ratio

Liabilities (TL) Net Worth (NW) Debt Ratio (TL/NW)

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This ratio indicates the payment security that the company offers its creditors as informs of

what is termed “distance to technical bankruptcy” and its value has to be higher than one,

with a figure of between 1.5 and 2.5 being considered generally appropriate.

The higher the value of the ratio, the greater the guarantee that the company can pay all of

the debts it has incurred.

e. Liquidity.

Liquidity measures a company's capacity to meet its financial obligations, debts or liabilities

in the short term. It shows how may current assets we will have to cover or honour the

possible payables in the short term. The higher the (positive) result, the greater the

company's solvency and capacity to make payment, thus constituting a short-term monetary

guarantee for the company.

1,29

1,61

1,85

2,30

2,62

0,00

0,50

1,00

1,50

2,00

2,50

3,00

0 €

20.000.000 €

40.000.000 €

60.000.000 €

80.000.000 €

100.000.000 €

120.000.000 €

S 2013/2014 S 2014/2015 S 2015/2016 S 2016/2017 T 2017/2018

Guarantee Ratio or Total Solvency

Total Assets Liabilities Guarantee Ratio= TA/TL

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If the ratio is less than 1: this shows that the company has liquidity problems and is possibly

facing difficulties with the obligations assumed in the short term.

If the ratio is higher than 1: it means that current assets are higher than current liabilities,

which in due measure is a sign of health.

f. Working capital.

This is defined as the total permanent financial resources (net worth or equity plus long-

term liabilities or payables) that are invested in current assets, that is, the permanent

resources that the company needs to perform its operational cycle.

The following chart shows how the company's Working Capital has evolved in the last 5

seasons.

This economic indicator offers a guarantee to third parties outside the company in relation

to its capacity to meet its obligations in the short term without causing stress on cash and

banks and is calculated as the difference between Current Assets and Current Liabilities.

0

0,86

1,38

1,03

1,53

1,96

0

0,5

1

1,5

2

2,5

0 €

5.000.000 €

10.000.000 €

15.000.000 €

20.000.000 €

25.000.000 €

30.000.000 €

35.000.000 €

40.000.000 €

45.000.000 €

50.000.000 €

S 2013/2014 S 2014/2015 S 2015/2016 S 2016/2017 T2017/2018

Liquidity Ratio

Current Assets-stock Current Liabilities Liquidity Ratio= (CA-Stock)/CL

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The lower the operating capital, the more complicated the situation, because in order to

meet its short-term commitments, the company must sell all its stock and exercise all its

collection rights, which is not always possible. However, having a positive operating capital

or working capital is a guarantee of the company's stability.

At 30 June 2018, the company's Working Capital is positive, totalling 22,311,631.27 euros.

-1.039.438

6.975.326

828.679

16.481.704

22.311.631

-10.000.000

0

10.000.000

20.000.000

30.000.000

40.000.000

50.000.000

S 2013/2014 S 2014/2015 S 2015/2016 S 2016/2017 S 2017/2018

Working Capital

Current Assets (CA) Current Liabilities (CL) Working Captial =CA-CL

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6. EXTERNAL VISIBILITY.

“Celta, … are the only debt-free First Division clubs.

Celta can boast of healthy accounts and freedom from debt. This would be normal and should be valued

and highlighted by the leaders of Spanish football. But this is not always the case. The Vigo club is one of

just three clubs in Spanish football, in the First Division, without a recognised debt at the end of the 2017-

2018 season. Celta has a surplus of 4,910,000 euros, ... Strangely, it is the more modest, recently promoted

clubs who are less prone to madness …. The report published by Palco 23 describes a worrying panorama

of major debt in Spanish football, above all in the big clubs, that should worry the game's administrators.

The financial management of Celta with Carlos Mouriño as Chairman has always prioritised equilibrium and

financial stability; it was one of the first clubs to apply the salary cap that is not obligatory. This means it has

less of a margin to compete with other clubs, but can boast zero debt, a surplus of 5 million and not

constitute the slightest concern for the LFP, the Spanish Federation, or the High Council for Sports. Celta

does not contribute to the financial sinkhole of Spanish football”.

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7. QUALITY MANAGEMENT.

On 10 July 2018, the certificate of the quality management system in relation to human resources

management was extended, and it certified the quality management system in line with ISO Standard

9001:2015 for the following activities: economic, administrative and financial management. The

provision of administrative, accounting, fiscal, treasury and internal monitoring services and reports

from the financial division both for internal consumption by senior management and the different

business divisions of Real Club Celta de Vigo, S.A.D., as well as for external consumption by other

stakeholders, whether public or private bodies. The management of the human resources of the

organisation.

[Translator's note: The following page contains the certificate from AENOR stating that the Department of

Management and Finance of Real Club Celta de Vigo, S.A.D. had a quality management system in line with

ISO Standard 9001:2015 for the following activities: economic, administrative and financial management.

The provision of administrative, accounting, fiscal, treasury and internal monitoring services and reports from

the financial division both for internal consumption by senior management and the different business

divisions of Real Club Celta de Vigo, S.A.D., as well as for external consumption by other stakeholders,

whether public or private bodies. The management of human resources of the organisation. CL PRINCIPE,

44, 36202 – VIGO (PONTEDEDRA) First issued 20/07/17, modified 10/07/18, expires 20/07/20]

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8. ANNEXES:

a. Balance Sheet.

ASSETS Note 30/06/2018 30/06/2017

A) NON-CURRENT ASSETS 68,195,582.36 55,939,314.87

I. Intangible Fixed Assets 54,080,467.48 45,633,682.41

1. Player acquisition rights 8 34,043,565.98 24,270,243.98

2. Sports competition participation rights 7.1 0.00 66,250.01

4. Rights over assets assigned for use 7.1 20,036,901.50 21,297,188.42

II. Other intangible fixed assets 7.2 144,045.28 99,614.03

III. Tangible Fixed Assets 5 12,307,693.36 8,149,682.19

1. Land and buildings 10,179,092.95 16,699.03

2. Technical facilities and other tangible fixed assets 1,975,626.08 703,067.73

3. Fixed assets under construction and advances 152,974.33 7,429,915.43

V. Long-term investments in group and associate companies 334,610.07 100,000.00

1. Equity instruments 11.4 100,000.00 100,000.00

2. Loans to companies 11.1 234,610.07 0.00

VI. Long-term financial investments 11.1 19,107.48 17,571.86

5. Other financial assets 19,107.48 17,571.86

VII. Deferred tax assets 14 1,309,658.69 1,938,764.38

B) CURRENT ASSETS 45,167,405.57 46,774,984.32

II. Stock 12 279,524.68 468,366.72

1. Comerciales 276,197.78 468,366.72

6. Advances to suppliers 3,326.90 0.00

III. Debtors 16,797,033.26 16,487,769.39

1. Season ticket holder and member quotas 11.1 0.00 549,168.29

b) Season ticket holder and member quotas, short-term 0.00 549,168.29

2. Group entities, debtors 11.1 694,789.00 0.00

3. Sports entities, debtors 11.1 14,611,093.63 14,381,913.89

3. Miscellaneous debtors 11.1 657,741.69 1,057,199.55

4. Staff 11.1 205,261.20 0.00

5. Current tax assets 14 628,147.74 499,487.66

6. Other credits with the Public Administrations 11.1 0.00 0.00

IV. Short-term investments in group and associate companies 11.1 28,764.42 201,022.18

5. Other financial assets 28,764.42 201,022.18

V. Short-term financial investments 11.1 6,000,180.30 180.30

5. Other financial assets 6,000,180.30 180.30

VII. Cash and equivalent liquid assets 11.1 22,061,902.91 29,617,645.73

1. Cash and banks 22,061,902.91 29,617,645.73

TOTAL ASSETS 113,362,987.93 102,714,299.19

BALANCE SHEET AT 30 JUNE 2018 AND 30 JUNE 2017

27

NET WORTH AND LIABILITIES Note 30/06/2018 30/06/2017

A) NET WORTH 70,146,270.96 58,105,028.41

A-1) Net equity 13 55,204,880.85 42,229,801.42

I. Capital 3,770,210.00 3,770,210.00

1. Subscribed capital 3,770,210.00 3,770,210.00

III. Reserves 38,459,591.42 15,390,068.05

1. Legal and statutory 754,042.00 754,042.00

2. Other reserves 32,795,661.24 12,033,090.21

3. Capitalisation reserve 4,909,888.18 2,602,935.84

VII. Results of the financial year 3 12,975,079.43 23,069,523.37

A-3) Subsidies, donations and endowments received 19 14,941,390.11 15,875,226.99

B) NON-CURRENT LIABILITIES 20,360,942.67 14,315,990.44

I. Long-term provisions 0.00 0.00

4. Other provisions 0.00 0.00

II. Long-term debts 11.2 12,596,833.47 4,756,521.25

2. Debts with financial institutions 4,270,833.18 2,461,521.25

3. Debts with sporting entities 7,306,000.29 1,300,000.00

5. Other financial liabilities 1,020,000.00 995,000.00

III. Long-term insolvency debt 2.4; 11.2 & 11.3 367,252.86 540,579.97

V. Long-term debts with group companies 11.2 0.00 3,341,590.90

1. Long-term participating loans 0.00 3,341,590.90

VI. Deferred tax liabilities 14 7,396,856.34 5,502,298.32

VII. Long-term accruals 11.2 0.00 175,000.00

C) CURRENT LIABILITIES 22,855,774.30 30,293,280.34

II. Short-term provisions 16 0.00 1,100,000.00

2. Other provisions 0.00 1,100,000.00

III. Short-term debts 11.2 2,248,796.64 567,275.49

2. Debts with financial institutions 1,054,166.70 275,000.04

5. Other financial liabilities 1,194,629.94 292,275.45

V. Commercial creditors and other accounts payable 11.2 16,628,761.73 16,906,600.09

1. Advances of season ticket holder and member quotas 51,379.97 0.00

1. Debts due to purchases or provision of services 3,373,387.88 3,709,317.18

b) Short-term suppliers 3,373,387.88 3,709,317.18

3. Debts with sporting entities 9,100,820.22 6,811,258.35

4. Staff (outstanding remuneration) 345,223.22 534,255.51

6. Other debts with Public Administrations 14 3,744,621.09 5,823,786.42

6. Client advances 13,329.35 27,982.63

VI. Short-term accruals 11.2 3,978,215.93 11,719,404.76

TOTAL NET WORTH + LIABILITIES 113,362,987.93 102,714,299.19

BALANCE SHEET AT 30 JUNE 2018 AND 30 JUNE 2017

28

b. Profit and Loss Account.

Note 30/06/2018 30/06/2017

1. Net turnover 15.1 62,070,776.12 74,789,336.50

a) Income from competitions 2,324,391.68 16,540,989.77

b) Income from season ticket holders and members 4,722,382.61 4,866,312.95

c) Broadcast income 48,907,931.36 47,573,750.00

d) Advertising income 4,295,380.27 4,333,209.64

d) Marketing and other income 1,820,690.20 1,475,074.14

4. Provisioning -1,359,444.72 -729,649.13

b) Other consumption and external expenses -1,651,121.49 -650,493.18

d) Impairment/Reversion of merchandise, raw materials and other provisioning 12 291,676.77 -79,155.95

5. Other operating income 2,325,343.52 1,913,589.98

a) Ancillary and other current management income 2,122,141.73 1,727,166.75

b) Operating subsidies included in results for the financial year 19 203,201.79 186,423.23

6. Staff expenses -34,462,375.38 -42,689,070.46

a) Playing staff salaries and wages 15.2.b -29,073,516.12 -37,654,116.47

b) Non-playing staff salaries and wages 15.2.a -4,115,929.03 -3,807,407.74

c) Social charges 15.2 -1,272,930.23 -1,227,546.25

7. Other operating expenses -12,659,470.48 -11,675,635.04

a) External services -8,096,474.75 -6,804,893.24

b) Levies -23,035.88 -5,534.84

c) Impairment, losses and variation of provisions for commercial operations 11.1 -8,053.20 -159,798.00

d) Travel -1,262,285.46 -2,001,012.77

e) Player acquisition expenses 15.2.b -1,418,962.91 -1,855,211.83

f) Other current management expenses -1,850,658.28 -849,184.36

8. Amortisation of fixed assets -12,309,298.58 -8,072,029.57

a) Amortisation of player acquisition rights 8 & 15.2.b -10,701,524.40 -6,604,195.49

b) Other amortisation 5; 7.1 & 7.2 -1,607,774.18 -1,467,834.08

9. Application of subsidies of non-financial fixed assets and others 19 1,245,115.80 1,245,115.80

11. Impairment and result of fixed asset sales 12,296,299.15 17,187,605.25

b) Results from transfers and others 5 -7,733.25 0.00

b) Results from the sale of players 8 & 15.4.f 12,304,032.40 17,187,605.25

13. Other results 15.4.d 33,975.56 -1,117,783.54

A.1) OPERATING PROFIT 17,180,920.99 30,851,479.79

14. Financial Income 15.4.e 12,536.66 50,722.45

a) From stakes in equity instruments 15.4.a 8,041.76 0.00

a 1) In group and associated companies 8,041.76 0.00

b) From negotiable securities and other financial instruments 4,494.90 50,722.45

b 2) From third parties 4,494.90 50,722.45

15. Financial expenses 15.4.e -116,062.58 -223,946.50

a) From debts with group and associate companies -52,892.72 -137,330.91

b) From debts with third parties -63,169.86 -86,615.59

17. Exchange differences 15.4.b & 15.4 e -549.62 0.00

A.2) FINANCIAL PROFIT -104,075.54 -173,224.05

A.3) PRE-TAX PROFIT 17,076,845.45 30,678,255.74

20. Profit tax 14 -4,101,766.02 -7,608,732.37

A.4) FINANCIAL YEAR PROFIT FROM ONGOING OPERATIONS 12,975,079.43 23,069,523.37

A.5) FINANCIAL YEAR PROFIT 3 12,975,079.43 23,069,523.37

PROFIT AND LOSS ACCOUNT AT 30 JUNE 2018 AND 30 JUNE 2017

A) OPERACIONES CONTINUADAS

29

c. Budget for the 2017/2018 Season.

PROJECTED BUDGET INCOME AND EXPENDITURE 2018/2019

SEASON

1. Net turnover 60,275,000.00

a) Income from competitions and participation in betting 1,050,000.00

b) Income from season ticket holders and members 4,200,000.00

c) Broadcast income 49,025,000.00

d) Advertising income 6,000,000.00

5. Other operating income 245,608.00

a) Ancillary and other current management income 245,608.00

6. Staff expenses (38,075,000.00)

a) Playing staff salaries and wages (31,875,000.00)

b) Non-playing staff salaries and wages (4,400,000.00)

c) Indemnification, miscellaneous (500,000.00)

d) Social charges (1,300,000.00)

7. Other operating expenses (11,752,000.00)

a) External services (7,035,000.00)

b) Taxes (7,000.00)

d) Travel and organisation of friendlies (1,360,000.00)

d.1) 1st Team Travel (800,000.00)

d.2) Celta B Travel (60,000.00)

d.3) Other travel (300,000.00)

d.4) Friendly expenses (200,000.00)

e) Other current management expenses (3,350,000.00)

8. Amortisation of Fixed Assets (13,245,115.92)

a) Amortisation of fixed assets (500,000.00)

b) Amortisation of players (11,500,000.00)

c) Amortizacion of rights over assets assigned for use (1,245,115.92)

9. Application of subsidies of non-financial fixed assets and others 1,245,115.92

11. Profit from sale of Fixed Assets and Extraordinary Results 9,843,000.00

a) Profit from transfers of players 9,888,000.00

e) Extraordinary expenses (45,000.00)

A.1) OPERATING PROFIT 8,536,608.00

13. Financial expenditure and similar expenses (310,000.00)

14. Exchange rate differences (10,000.00)

A.2) FINANCIAL PROFIT (320,000.00)

A.3) PRE-TAX PROFIT 8,216,608.00

20. Profit tax (2,054,152.00)

A.4) FINANCIAL YEAR PROFT FROM ONGOING OPERATIONS 6,162,456.00

A.5) FINANCIAL YEAR PROFIT 6,162,456.00

21. Results of the year from interrupted ooperations net of tax

A.5) FINANCIAL YEAR PROFIT 6,162,456.00

2018/2019 SEASON BUDGET

A) ONGOING OPERATIONS

30