Annual Report • May 6, 2019
Annual Report
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AEROPORTO G. MARCONI DI BOLOGNA S.P.A.
Consolidated Financial Statements of Aeroporto Guglielmo Marconi di Bologna Group and Financial Statements of Aeroporto G. Marconi di Bologna S.p.A. at December 31, 2018
| Letter from the Chairman…………………………………………………………………………………………………………pag.3 |
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| Ownership of the Parent Company Aeroporto Guglielmo Marconi di Bologna |
S.p.A………………….pag.5 |
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| Board of Directors.……………………………………………………………………………………………………………………pag.6 |
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| Board of Statutory Auditors………………………………………………………………………………………………………pag.7 |
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| Auditing Firm…………………………………………………………………………………………………………………………….pag.7 |
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Directors' Report at 31 December 2018……………………………………………………………………………………..pag.8
| Consolidated financial statements at 31 December 2018………………………………………………………pag.52 |
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| Statement of Consolidated Financial Position……………………………………………………………………………pag.53 |
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| Consolidated Income Statement……………………………………………………………………………………………….pag.54 |
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| Consolidated Statement of Comprehensive Income………………………………………………………………….pag.55 |
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| Consolidated Cash Flow statement……………………………………………………………………………………………pag.56 |
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| Statement of Changes in Consolidated Shareholders' Equity…………………………………………………….pag.57 |
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| Notes to the consolidated financial statements at 31 December 2018………………………………………pag.58 |
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| Statement on the Consolidated Financial Statements pursuant to Article 154 bis of the TUF…. |
pag.128 |
| Auditing firm report………………………………………………………………………………………………………………….pag.129 |
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| Aeroporto G. Marconi di Bologna Spa financial statements at 31 December 2018………………….pag.134 |
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| Statement of Financial Position………………………………………………………………………………………………pag.135 |
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| Income Statement……………………………………………………………………………………………………………………pag.136 |
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| Statement of Comprehensive Income……………………………………………………………………………………pag.137 |
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| Cash Flow Statement ………………………………………………………………………….…………………………………pag.138 |
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| Statement of Changes in Shareholders' Equity………………………………………………………………………pag.139 |
| Notes to the consolidated financial statements at 31 December 2018……………………………………pag.140 |
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| Statement on the Consolidated Financial Statements pursuant to Article 154 bis of the TUF…. |
pag.211 |
| Auditing firm report………………………………………………………………………………………………………………….pag.212 |
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| Report of the Board of Statutory Auditors to the Shareholders' Meeting …………………………………pag.217 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 2
2018 represents the tenth consecutive year of record traffic growth for the Bologna airport with double-digit growth in revenues and earnings.
Passenger numbers grew 3.8% on 2017, totalling 8,506,658, thanks to the introduction of new routes – 114 compared to 106 in 2017 – and more traffic in the legacy segment (+4.3%) and in the low-cost segment (+2.6%).
In particular, legacy traffic saw the introduction of new routes for Athens, Kiev, Tblisi, Vienna and six destinations in Russia, in addition to increased frequencies on some of the major international airlines, among which the fifth daily flight of Lufthansa for Frankfurt, the fourth daily flight of KLM for Amsterdam and the third daily flight of Aeroflot for Moscow.
The low-cost segment witnessed increased operations by the major carriers at the airport, in particular Ryanair, which began connections for Amman, Kaunas and Luton London, continued those for Bratislava, Cologne, Naples and Prague and increased frequencies for Manchester. Vueling also added connections on its Bologna-Barcelona route (from 7 to 12 weekly flights) from May 1, 2018.
In 2018 Ryanair and Wizzair were the leading airlines for passenger numbers, followed by Alitalia, Air France, Lufthansa and British Airways. Overall the total number of airlines operating out of Bologna were 49, four more than in 2017.
Turning to the service quality, in 2018 the general satisfaction index (CSI – Customer Satisfaction Index) increased from 97% to 98.5% - demonstrating excellence despite the pressures on infrastructural capacity from traffic growth, in particular in certain months of the year. The infrastructural development and traffic growth, while maintaining high service quality and environmental and economic sustainability levels, represent the key pillars of the Group's strategy and with a strong focus again in 2018.
Consolidated revenues totalling Euro 114.1 million rose 15.1%, driven by traffic growth positively impacting on revenues from aeronautical services (+5.9%) and revenues from non-aeronautical services (+7.7%).
Consolidated costs rose 16.1% and mainly related to service costs (+7.1%, for higher maintenance costs, snow clearance for the extreme temperatures in 2017-2018 winter and related to traffic), construction service costs (+132.4% in line with the higher revenues from the increase in investments), rental, hire charges and other costs (+5.9% for rise in costs related to traffic) and personnel costs (+1.2% for the higher average workforce of 23 resources – 16 equivalent full-time to cover the needs arising from the areas impacted by the increase in traffic).
Net of revenues and costs from construction services, items related to the infrastructural investments, revenues rose 6.5% and costs 2.1% - demonstrating a positive divergence between revenue growth and the increase in traffic and cost containment.
Given the factors outlined above, Group margins report significant growth: EBITDA amounted to Euro 38.7 million, compared to Euro 34.2 million in 2017 (+13.1%), the operating result amounted to Euro 25.2 million, compared to Euro 22.6 million in 2017 (+11.4%) and the result before taxes amounted to Euro 25 million, compared to Euro 22 million in 2017 (+13.3%).
Aeroporto Guglielmo Marconi di Bologna S.p.A. 3
The consolidated profit grew 10.8%, amounting to Euro 17.9 million compared to Euro 16.2 million in 2017; this result is entirely attributable to the Group following the acquisition from Minority interests of the residual 49% of Tag Bologna Srl in October 2018. Following this operation, the Group has two majority investments, Tag Bologna Srl and Fast Freight Marconi Spa, both held 100%.
The Group Net Financial Position at December 31, 2018 was a cash position of Euro 8 million, compared to Euro 10 million at December 31, 2017. In 2018, investments were financed primarily in infrastructure for Euro 19.5 million, debt repayments totalled Euro 5.8 million and dividends distributed totalled Euro 14.2 million. At December 31, 2018, confirming the solid financial position of the Airport, Consolidated Shareholders' Equity amounted to Euro 173,7 million (Euro 172.3 million at December 2017).
With great satisfaction, I conclude highlighting that Bologna airport has established itself as a strategic asset for the economic development of our region and the upcoming opening of the People Mover directly connected to the Central Train Station will give further impetus to our airport within a connectivity network increasingly based on the cohesion of the various transport systems.
Dear Shareholders, I wish to express my full satisfaction both personally and on behalf of all of the Board of Directors for the strong results achieved in the year just ended, and for which my personal thanks goes to all those who contributed within their respective roles and responsibilities at all company levels.
In the three-year period 2016-2018, the first three years after the Stock Market listing of July 2015, Group EBITDA increased from Euro 28.2 million to Euro 38.7 million (CAGR +17.2%), the operating result rose from Euro 17.3 million to Euro 25.2 million (CAGR +20.8%) and the profit rose from Euro 11.4 million to Euro 17.9 million (CAGR +25.4%), distributing dividends totalling Euro 30.3 million. On the infrastructural investment front (including the renewal of airport infrastructure provision), Group investments totalled Euro 52.7 million.
With full satisfaction both personally and on behalf of all of the Board of Directors, the financial statements of the Parent Company Aeroporto Guglielmo Marconi di Bologna Spa, which we present for your approval, reports a profit of Euro 17,100,845.83, for which the Board of Directors proposes the following allocation:
The Chairman of the Board of Directors
(Enrico Postacchini)
Aeroporto Guglielmo Marconi di Bologna S.p.A. 4
Aeroporto Guglielmo Marconi di Bologna Spa Via Triumvirato, 84 - 40132 Bologna Bologna Economic and Administrative Register No.:268716 Bologna Company Registration Office, Tax and VAT No.: 03145140376 Share capital: Euro 90,314,162.00 fully paid-in
According to the shareholder register and the notices received pursuant to Article 120 of Legislative Decree No. 58/98, the shareholders of the Parent Company, Aeroporto Guglielmo Marconi di Bologna S.p.A., with holdings of more than 5% were as follows at December 31, 2018:
| SHAREHOLDER | % held |
|---|---|
| BOLOGNA CHAMBER OF COMMERCE | 37.53% |
| ATLANTIA S.P.A. (EDIZIONE S.R.L.) | 29.38% |
| F2I FONDI ITALIANI PER LE INFRASTRUTTURE SGR SPA | 9.99% |
The following have been considered in presenting the Parent Company's ownership structure:
Furthermore, on June 5, 2018 the Bologna Chamber of Commerce, Municipality of Bologna, Metropolitan City of Bologna, Region of Emilia-Romagna, Modena Chamber of Commerce, Ferrara Chamber of Commerce, Reggio Emilia Chamber of Commerce and Parma Chamber of Commerce (collectively, the "Public Shareholders") entered into a shareholders' agreement (the "Shareholders' Agreement") governing certain rights and obligations in respect of the shareholder structure and corporate governance of Aeroporto Guglielmo Marconi di Bologna S.p.A.. This Shareholders' Agreement, filed at the Bologna Companies Registration Office on June 8, 2018 and sent to Consob on June 9, 2018, includes provisions on voting and transfer restrictions, binding the following interests at the publication date of the Shareholders' Agreement:
| PUBLIC SHAREHOLDERS | % Share Capital subject to Voting Agreement |
|---|---|
| BOLOGNA CHAMBER OF COMMERCE | 37.53% |
| MUNICIPALITY OF BOLOGNA | 3.88% |
| METROPOLITAN CITY OF BOLOGNA | 2.31% |
| REGION OF EMILIA ROMAGNA | 2.04% |
| MODENA CHAMBER OF COMMERCE | 0.30% |
| FERRARA CHAMBER OF COMMERCE | 0.22% |
| REGGIO EMILIA CHAMBER OF COMMERCE | 0.15% |
| PARMA CHAMBER OF COMMERCE | 0.11% |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 5
| PUBLIC SHAREHOLDERS | % Share Capital subject to Transfer Restriction Agreement |
|---|---|
| BOLOGNA CHAMBER OF COMMERCE | 37.53% |
| MUNICIPALITY OF BOLOGNA | 3.85% |
| METROPOLITAN CITY OF BOLOGNA | 2.30% |
| REGION OF EMILIA ROMAGNA | 2.02% |
| MODENA CHAMBER OF COMMERCE | 0.08% |
| FERRARA CHAMBER OF COMMERCE | 0.06% |
| REGGIO EMILIA CHAMBER OF COMMERCE | 0.04% |
| PARMA CHAMBER OF COMMERCE | 0.03% |
The Board of Directors at the approval date of the Financial Statements at December 31, 2018 comprises:
| Name | Office |
|---|---|
| Enrico Postacchini | Chairman |
| Nazareno Ventola | Chief Executive Officer (*) |
| Sonia Bonfiglioli | Director (A) (B) |
| Giada Grandi | Director |
| Luca Mantecchini | Director (A) |
| Laura Pascotto | Director (A) (B) |
| Giorgio Tabellini | Director |
| Domenico Livio Trombone | Director (B) (**) |
| Marco Troncone | Director (***) |
(A) Member of the Remuneration Committee (Chairman: Luca Mantecchini)
(B) Member of the Control and Risks Committee (Chairperson: Sonia Bonfiglioli)
(*) Chief Executive Officer appointed by the Board of Directors on May 9, 2016. He has also been appointed as Director responsible for the Internal Control and Risk Management System. In addition, he is the General Manager.
(**) On October 30, 2017, the Board of Directors co-opted, in replacement of Director Gabriele Del Torchio who resigned on September 4, 2017, the Director Domenico Livio Trombone. This co-option was ratified by the Shareholders' Meeting of April 24, 2018.
(***) On November 14, 2018, the Board of Directors co-opted the director Marco Troncone in replacement of the director Livio Fenati, who resigned on September 26, 2018. This latter was co-opted by the Board of Directors on January 29, 2018 in replacement of the Director Arturo Albano, who resigned on October 30, 2017.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 6
All the members of the Board of Directors were appointed by the Shareholders' Meeting of April 27, 2016, with the exception of the director Domenico Livio Trombone whose appointment was ratified by the Shareholders' Meeting of April 24, 2018. All directors hold office until the approval date of the financial statements as at December 31, 2018.
The Board of Statutory Auditors, appointed by the Shareholders' Meeting of April 27, 2016 and in office until the approval date of the financial statements as at December 31, 2018 are:
| Name | Office |
|---|---|
| Pietro Floriddia | Chairman |
| Anna Maria Fellegara | Statutory Auditor |
| Matteo Tiezzi | Statutory Auditor |
| Carla Gatti | Alternate Auditor |
| Giovanna Conca | Alternate Auditor |
EY S.p.a. was appointed as the independent audit firm by the Shareholders' Meeting of May 20, 2015 for the financial years 2015-2023.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 7
Directors' Report of the Aeroporto Guglielmo Marconi di Bologna S.p.A. Group for year ended December 31, 2018
Aeroporto Guglielmo Marconi di Bologna S.p.A. 8
| 1 STRATEGIES AND RESULTS 14 1.1 AIR TRANSPORT GENERAL SECTOR AND PERFORMANCE: G. MARCONI AIRPORT OVERVIEW AND POSITIONING 14 1.2 STRATEGIC OBJECTIVES 14 1.3 SHARE PERFORMANCE 15 2. KEY OPERATING RESULTS ANALYSIS 17 2.1 AVIATION STRATEGIC BUSINESS UNIT 17 2.1.1 AVIATION STRATEGIC BUSINESS UNIT: TRAFFIC DATA 17 2.1.2 AVIATION STRATEGIC BUSINESS UNIT: FINANCIAL HIGHLIGHTS 21 2.2 NON-AVIATION STRATEGIC BUSINESS UNIT 23 2.2.1 NON-AVIATION STRATEGIC BUSINESS UNIT: FINANCIAL HIGHLIGHTS 23 3 ANALYSIS OF THE OPERATING RESULTS, FINANCIAL POSITION AND CASH FLOWS:24 3.1 CONSOLIDATED OPERATING RESULTS ANALYSIS 24 3.2 CASH FLOW ANALYSIS 27 3.3 FINANCIAL POSITION ANALYSIS 29 3.4 KEY INDICATORS 30 3.5 INVESTMENTS 31 3.6 PERSONNEL 32 4 MAIN NON-FINANCIAL RESULTS ANALYSIS 34 4.1 THE ENVIRONMENT 34 4.1.1 AIRPORT INFRASTRUCTURE DEVELOPMENT 34 4.2 AIRPORT SECURITY 34 4.3 QUALITY 35 5 REGULATORY FRAMEWORK36 5.1 TARIFF REGULATION 2016-2019 36 5.2 REG. (EC) 139/2014: NEW CERTIFICATION OF ITALIAN AIRPORTS 36 5.3 REGULATIONS ON INCENTIVES AND SUBSIDIES PAID FROM AIRPORTS TO AIRLINES 37 5.4 FIRE PREVENTION FUND 37 5.5 BOARDING FEE MUNICIPAL SURTAX TO BE ALLOCATED TO INPS 38 5.6 THE ADMINISTRATIVE ACCOUNTABILITY OF LEGAL PERSONS 38 5.7 NEW "TERMINAL VALUE" REGULATION 39 |
INTRODUCTION 11 | |
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| 5.8 NON-FINANCIAL INFORMATION REPORT 40 | |
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| 5.9 PRIVACY COMPLIANCE 40 | |
| 5.10 CONTINUITY OF SERVICES PROVIDED BY ALITALIA IN EXTRAORDINARY ADMINISTRATION 40 | |
| 5.11 IRESA 41 | |
| 6 DISPUTES 41 | |
| 7 MAIN RISKS AND UNCERTAINTIES 42 | |
| 8 OPERATING PERFORMANCE OF THE PARENT COMPANY 45 | |
| 8.1 PARENT COMPANY RESULTS 45 | |
| 8.2.1 CASH FLOW STATEMENT OF THE PARENT COMPANY 46 | |
| 8.3 PARENT COMPANY STATEMENT OF FINANCIAL POSITION 47 | |
| 9 STATEMENT OF RECONCILIATION BETWEEN SHAREHOLDERS' EQUITY AND NET RESULT48 | |
| 11 ALTERNATIVE PERFORMANCE INDICATORS 49 | |
| 12 GUARANTEES PROVIDED 49 | |
| 13 TREASURY SHARES IN PORTFOLIO 50 | |
| 14. SHARES HELD BY DIRECTORS AND STATUTORY AUDITORS 50 | |
| 15 SUBSEQUENT EVENTS AND BUSINESS OUTLOOK 50 |
this report, accompanying the Financial Statements of the Aeroporto Guglielmo Marconi di Bologna Spa Group (hereinafter also the "Airport Group" or "Airport") for the year ended December 31, 2018, in presenting the Group's performance indirectly analyses also the performance of the Parent Company, Aeroporto Guglielmo Marconi di Bologna Spa (hereafter AdB or the Parent Company), the holder of the concession for the full management of Bologna Airport, i.e. Full Management Concession No. 98 of July 12, 2004 and subsequent Additional Deeds, approved by Decree of the Ministry of Transport and Infrastructure and of the Economy and Finance No. 7 of March 15, 2006, registered by the Court of Auditors on March 29, 2006 (Reg. 1, File 217) with a term of 40 years starting on December 28, 2004.
The Group's structure at December 31, 2018 and a brief description of the type and businesses of its subsidiaries and associates is presented below:
The amounts in the tables in this Directors' Report are in thousands of Euro, whereas those in the comments are in millions of Euro, unless otherwise indicated. The data is from internal company sources unless otherwise indicated.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 11
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
Airport business may be divided into aviation and non-aviation activities. Aviation activities primarily consist of managing, maintaining and developing airports, which also includes security checks and surveillance, as well as aviation services for passengers, other users and airport operators and marketing activities to develop passenger and cargo traffic. Non-aviation activities primarily consist of developing airport real estate and commercial potential.
Based on the nature of operations, the Group manages the airport through the following Strategic Business Units (SBU's):
The Aviation SBU's main activities involve managing and developing airport infrastructure and in particular of:
Consideration for such services takes the form of airport charges of the following types paid by airlines, airport operators and passengers:
The Aviation SBU's other major revenue sources are:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 12
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The Non-Aviation SBU's main activities relate to parking management, retail sub-concessions, advertising, services for passengers and real estate management.
Bologna airport's directly operated paid parking areas offer approximately 5,400 available car parking spaces, located in three parking areas: the first close to the terminal, the second close to airport grounds and the third located at approx. 1.5 KM away. The airport's increasing popularity in recent years has also driven a number of private companies to enter the market, creating competing parking lots in the vicinity of the airport, with shuttle bus services to the terminal.
Bologna airport's retail offerings include internationally recognised brands with local ties and some of the leading local, domestic and international retail and catering chains. The shopping area extends over approximately 4,500 m² and includes 43 shops. The latest airport upgrade developed the Duty-free areas – one of the SBU's main revenue sources.
Advertising is managed using digital and large-format back-lit displays located in areas of the terminal's interior and exterior where the advertisements are highly visible. Campaigns involving the personalisation of particular areas or furnishings located in the airport are sometimes conducted.
Passenger services include a business lounge operated directly by the Parent Company. The Marconi Business Lounge (MBL) is an exclusive, comfortable environment used mostly by business passengers travelling with the major legacy carriers. In addition, the "You First" service provides arriving and departing passengers with access to exclusive services such as check-in and baggage collection assistance, porterage, gate assistance and priority boarding.
The other services available to passengers include car rentals. Nine rental companies are based at Bologna airport, offering a total of 17 specialised brands and 484 vehicles available at the airport.
Real estate activity is divided into two general areas: sub-concession revenues for aviation-related commercial activities, above all express couriers, and sub-concession revenues for handling services, which are subject to regulated tariffs.
The total commercial premises under sub-concession extend to over 90,000 square metres, of which over 70,000 square metres of offices, warehouses, technical service areas and hangars and approximately 20,000 square metres of outdoor space used for parking operating vehicles, manoeuvring in loading and loading areas and aircraft refuelling vehicle areas.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 13
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
In 2018 the world economy continued to grow, although the outlook for global trade deteriorated. International economic growth is exposed to numerous risk factors: the repercussions of a negative outcome to trade negotiations between the United States and China, the rekindling of financial tensions in emerging nations and the conditions of the United Kingdom's departure from the European Union (Brexit). According to projections published by the OECD last November, in 2018 global economic growth came to 3.7%, with forecast global GDP growth of 3.5% in 2019.
Oil prices have fallen sharply since early October, due above all to supply-side factors, such as the increase in output in the United States, Saudi Arabia and Russia, together with the stability of Iranian exports, following the temporary loosening of the sanctions imposed by the United States.
Economic activity slowed in the Eurozone, due in part to temporary factors, but also to deteriorating expectations amongst businesses and weak foreign demand.
In Italy, after the interruption in the third quarter of the expansionist phase of over three years, following the fall in internal demand, in the final months of 2018 GDP may have declined again. The recovery in exports however continued. According to the estimates of the Bank of Italy in the fourth quarter of 2018, GDP grew 1.0% on an annual basis (Source: Economic Bulletin, Bank of Italy, January 2019).
In this context, global passenger traffic recorded growth of 6.5% in 2018, confirming a positive trend for air traffic. Goods traffic also reports strong global growth with volumes rising 3.5% on 2017.
In Europe, passenger traffic in 2018 grew 6.6% (Source: IATA, Air Passenger Market Analysis, December 2018) - higher than other global regions but a slight slowdown due to uncertainties on future economic developments. There was also moderate growth in European goods traffic (+3.2%) due to the persistent weakness in exports, in particular in Germany.
The Italian market in the same period saw passenger traffic growth of 5.9% (Source: Assaeroporti, December 2018) and the Bologna Airport reported growth of 3.8%.
The Group in 2018 continues to pursue the strategic objectives underlying all operations. The core strategic guidelines are:
The Group seeks to maintain a varied range of flight offerings suited to various types of users by adding to the number of airlines operating out of the airport, while continuing to maintain good margins also on the new traffic generated. In terms of traffic development, the Group targets the adding of routes, with the introduction of new Eastern and long-haul destinations, while boosting frequencies to existing destinations. The Group also focuses on improving airport accessibility, through the development of ground connections and the expansion of its catchment area.
The investments outlined in the Master Plan and Regulatory Agreement are fundamental to the development of the company's business. The strategy in question calls for an efficient use of the existing
Aeroporto Guglielmo Marconi di Bologna S.p.A. 14
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
infrastructure's capacity and modular implementation of new investments to ensure that infrastructure capacity keeps pace with expected traffic development. The passenger terminal expansion project is a key part of the infrastructure development plan, permitting the development of - in particular - the security control areas and the boarding gates, in addition to extending dedicated commercial space.
The Group also plans to develop non-aviation business with the opening of new stores, new car spaces and the extension of the range of services available to passengers.
The Group is focused on ensuring the constant improvement of the services offered to airport users in its fields of operation, both directly and indirectly, while also constantly improving its standards of security, quality and respect for the environment. In order to support and improve all aspects of operations and generate Customer loyalty, the Group considers it key to develop a culture of innovation which revolves around the installation of technology that facilitates greater interaction with passengers and optimises the airport travelling experience.
The Group is committed to all aspects of sustainability, ranging from those of an environmental nature to compliance with ethical and social principles, in view of the important role which Bologna airport plays as a vital hub for the region. The Group also strives to develop those who work at the Airport and build an organisation which responds to the evolving demands of the market and which supports the individual in their work.
The Group has furthermore identified two overarching guidelines to the strategic objectives identified above which are viewed as a touchpoint for company operations:
The Group is focused on consistently improving the financial performance and on ensuring an adequate return for shareholders.
In order to boost company performances, the Group seeks to improve the efficiency and efficacy of its processes and its internal structure through projects which increasingly involve the interested parties.
AdB's shares began trading on the STAR segment of the Milan Stock Exchange on July 14, 2015.
The following graphs present
On December 31, 2018, the official share price was Euro 11.48 per share, resulting in an AdB Group market capitalisation of Euro 415 million at that date.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 15
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
AdB Share performance (01/01/2018-31/12/2018)
Aeroporto Guglielmo Marconi di Bologna S.p.A. 16
Aeroporto Marconi di Bologna for the tenth consecutive year delivered record traffic numbers: in 2018, 8,506,658 passengers passed through the airport, including transits and General Aviation - up 3.8% on 2017.
Movements (-0.2) dropped slightly, while tonnage (+3.0%) rose due to the increased size of legacy carrier aircraft. This performance was supported by the introduction of new destinations and the development of existing routes. The average load factor also grew strongly, from 80.9% in 2017 to 81.3% in 2018, as a result of the passenger number increase outstripping the additional number of seats offered.
| 2018 | 2017 | % Change | |
|---|---|---|---|
| Passengers | 8,506,658 | 8,198,102 | 3.8% |
| Movements | 71,503 | 71,631 | -0.2% |
| Tonnage | 4,690,629 | 4,555,794 | 3.0% |
| Cargo | 52,681,291 | 56,132,109 | -6.1% |
Data includes General Aviation and transits
Note: the General Aviation figures were recalculated considering only paying traffic
Passenger traffic growth stems from the development of both of the key components - legacy traffic and low-cost traffic.
Legacy traffic was up 4.3% in passenger volume terms in 2018, thanks to the introduction of new routes and additional flights to some hubs by the main international carriers. In particular, new flights have been introduced to Athens (Aegean Airlines, with three weekly flights from May 18), to Kiev (Ernst Airlines, with three weekly flights from June 23) to Tbilisi (Georgian Airlines with two weekly flights), to Vienna (Laudamotion with four weekly flights) and to six Russian destinations (Ural Airlines, with a weekly flight from April 7).
In addition, among the additional flights introduced we report the fifth daily flight to Frankfurt operated by Lufthansa, the fourth daily flight to Amsterdam operated by KLM, and the third daily flight to Moscow operated by Aeroflot.
Ongoing investment by the low-cost carriers at the airport continued, with Ryanair extending its operations (continuing also during Summer 2018 the Winter 2017/2018 connections introduced to Bratislava, Cologne, Naples and Prague). We also report the introduction of new routes from Winter 2018/2019 for Amman, Kaunas and London Luton. Flights also increased to Manchester and Vueling added connections on its Bologna-Barcelona route (from 7 to 12 weekly flights) from May 1, 2018.
In 2018, the low-cost component grew 2.6% overall.
Finally, charter segment traffic increased (+51.3% on 2017) thanks to a recovery in flights to Egypt. The contribution of this segment to overall airport traffic remained however marginal.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 17
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
| Passenger traffic breakdown | 2018 | % of total | 2017 | % of total | % Change |
|---|---|---|---|---|---|
| Legacy | 3,590,506 | 42.2% | 3,442,366 | 42.0% | 4.3% |
| Low cost | 4,791,541 | 56.3% | 4,668,359 | 56.9% | 2.6% |
| Charter | 107,335 | 1.3% | 70,929 | 0.9% | 51.3% |
| Transits | 10,098 | 0.1% | 8,218 | 0.1% | 22.9% |
| Total Commercial Aviation | 8,499,480 | 99.9% | 8,189,872 | 99.9% | 3.8% |
| General Aviation | 7,178 | 0.1% | 8,230 | 0.1% | -12.8% |
| Total | 8,506,658 | 100.0% | 8,198,102 | 100.0% | 3.8% |
Bologna airport had an increasingly international profile: passengers travelling on international flights accounted for 76.8% of the total in 2018 (76.3% in 2017).
| Passenger traffic breakdown | 2018 | 2017 | % Change |
|---|---|---|---|
| EU | 7,286,888 | 7,104,021 | 2.6% |
| Non-EU | 1,212,592 | 1,085,851 | 11.7% |
| Total Commercial Aviation | 8,499,480 | 8,189,872 | 3.8% |
| General Aviation | 7,178 | 8,230 | -12.8% |
| Total | 8,506,658 | 8,198,102 | 3.8% |
23.2% of Bologna passenger traffic is domestic, while Spain (with 14.2%) was confirmed as the second largest contributor to passenger numbers. Germany with 8.9% and the UK with 8.7% follow.
| Passenger traffic by country | 2018 | % of total | 2017 | % of total | % Change |
|---|---|---|---|---|---|
| Italy | 1,975,283 | 23.2% | 1,939,900 | 23.7% | 1.8% |
| Spain | 1,209,422 | 14.2% | 1,183,542 | 14.4% | 2.2% |
| Germany | 758,830 | 8.9% | 820,552 | 10.0% | -7.5% |
| UK | 739,794 | 8.7% | 686,517 | 8.4% | 7.8% |
| France | 460,835 | 5.4% | 455,428 | 5.6% | 1.2% |
| Romania | 443,173 | 5.2% | 468,191 | 5.7% | -5.3% |
| Netherlands | 319,006 | 3.8% | 293,034 | 3.6% | 8.9% |
| Turkey | 274,003 | 3.2% | 267,537 | 3.3% | 2.4% |
| Greece | 239,999 | 2.8% | 209,926 | 2.6% | 14.3% |
| Poland | 194,023 | 2.3% | 193,447 | 2.4% | 0.3% |
| Other | 1,892,290 | 22.2% | 1,680,028 | 20.5% | 12.6% |
| Total | 8,506,658 | 100.0% | 8,198,102 | 100.0% | 3.8% |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 18
The network of destinations served by the airports provides an indicator of traffic solidity. In 2018, 114 destinations were directly reachable from Bologna.
| Destinations reachable from Bologna Airport |
2018 | 2017 | Change |
|---|---|---|---|
| Destinations (airports) connected directly | 114 | 106 | 8 |
In terms of individual routes, Catania maintained its top ranking in terms of passengers, followed by Frankfurt, Barcelona, Paris CDG, Madrid, London LHR and Palermo. In 2018 we highlight in particular the strong increase in traffic on the routes Catania, Barcelona, London LHR and Rome FCO.
The main destinations again reflect the solidity of the traffic mix as at the same time acting as hubs for the traditional carriers and point to point destinations of the low-cost carriers.
| Main passenger traffic routes* | 2018 | 2017 | % Change |
|---|---|---|---|
| Catania | 396,028 | 361,724 | 9.5% |
| Barcelona | 340,319 | 293,617 | 15.9% |
| Frankfurt | 302,331 | 308,324 | -1.9% |
| Paris CDG | 298,649 | 287,581 | 3.8% |
| Rome FCO | 295,576 | 235,872 | 25.3% |
| London LHR | 293,385 | 271,425 | 8.1% |
| Palermo | 286,436 | 270,643 | 5.8% |
| Madrid | 285,421 | 286,895 | -0.5% |
| Amsterdam | 226,935 | 200,341 | 13.3% |
| London STN | 221,658 | 224,195 | -1.1% |
Passenger traffic including transits
The network comprising the main airlines present at the airport has substantially consolidated over recent years.
| Number of carriers | 2018 | 2017 | Change |
|---|---|---|---|
| Airlines | 49 | 45 | +4 |
Analysing airline performances, Ryanair was the largest airline with 44.9% of traffic and passenger growth of 2.7%. Wizz Air was again in second place, moving over 8,000 passengers more than 2017 (+1.7%). We indicate, in addition, the strong performances of the main legacy carriers at the airport and in particular Alitalia (+36.3%) and KLM (+13.1%), which confirms therefore the broad and diversified range of carriers present.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 19
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
| Passenger traffic by airline | 2018 | % of total | 2017 | % of total | % Change |
|---|---|---|---|---|---|
| Ryanair | 3,817,483 | 44.9% | 3,716,869 | 45.3% | 2.7% |
| Wizz Air | 487,101 | 5.7% | 479,081 | 5.8% | 1.7% |
| Alitalia | 466,981 | 5.5% | 342,608 | 4.2% | 36.3% |
| Lufthansa | 302,430 | 3.6% | 308,499 | 3.8% | -2.0% |
| Air France | 298,089 | 3.5% | 287,324 | 3.5% | 3.7% |
| British Airways | 293,593 | 3.5% | 271,910 | 3.3% | 8.0% |
| KLM | 225,750 | 2.7% | 199,690 | 2.4% | 13.1% |
| Air Dolomiti | 215,954 | 2.5% | 209,964 | 2.6% | 2.9% |
| Blue Panorama | 196,068 | 2.3% | 163,234 | 2.0% | 20.1% |
| Turkish Airlines | 183,785 | 2.2% | 178,581 | 2.2% | 2.9% |
| Other | 2,019,424 | 23.7% | 2,040,342 | 24.9% | -1.0% |
| Total | 8,506,658 | 100.0% | 8,198,102 | 100.0% | 3.8% |
For the IATA Winter 2018/2019 season, the main operational changes were:
New connections:
Frequency increases:
New connections operated by Ryanair:
Frequency decreases:
– Naples operated by Ryanair with the reduction from 7 to 5 weekly flights.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 20
| (in KG) | 2018 | 2017 | % Change |
|---|---|---|---|
| Air cargo of which | 40,539,918 | 41,985,870 | -3.4% |
| Cargo | 40,474,560 | 41,861,100 | -3.3% |
| 65,358 | 124,770 | -47.6% | |
| Road cargo | 12,141,373 | 14,146,239 | -14.2% |
| Total | 52,681,291 | 56,132,109 | -6.1% |
Cargo traffic in 2018 totalled 52,681,291 kg, down 6.1% on 2017. This follows in particular an absence of extraordinary volumes, evident in the comparative period.
| in thousands of Euro | for the year ended 31.12.2018 | for the year ended 31.12.2017 | Change | % Change |
|---|---|---|---|---|
| Passenger Revenues | 53,331 | 50,887 | 2,444 | 4.8% |
| Carrier Revenues | 22,563 | 22,511 | 52 | 0.2% |
| Airport Operator Revenues | 3,494 | 3,317 | 177 | 5.3% |
| Traffic Incentives | (23,389) | (23,575) | 186 | -0.8% |
| Construction Service Revenues | 13,143 | 5,229 | 7,914 | 151.3% |
| Other revenues | 1,406 | 1,442 | (36) | -2.5% |
| Aeronautical and FSC Revenue Reduction | (10) | (259) | 249 | -96.1% |
| Total AVIATION SBU Revenues | 70,538 | 59,552 | 10,986 | 18.4% |
The Aviation Strategic Business Unit's revenues consist of fees paid by users (passengers and airlines) and airport operators for the use of the infrastructure and services provided on an exclusive basis by the Group for landing, take-off, lighting, aircraft parking and passenger and cargo operations, in addition to centralised infrastructure and exclusive-use premises.
Given the public utility aspect of airport services, airport charges are regulated by both national and EU legislation. The new regulations and implementation measures – including the models approved by the Transport Regulation Authority – require that changes to the system or amount of airport fees be made with the consent, on the one hand, of the airport manager, and of the airport's users on the other.
The increase in 2018 compared to 2017 is due to a number of factors, including the differing increase in the main drivers of traffic and construction service revenues.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 21
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
Group revenues from the Aviation Strategic Business Unit were overall up 18.4% on 2017. The individual accounts broke down as follows:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 22
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change | % Change |
|---|---|---|---|---|
| Retail and Advertising | 14,625 | 13,218 | 1,407 | 10.6% |
| Parking | 15,946 | 15,095 | 851 | 5.6% |
| Real Estate | 2,393 | 2,305 | 88 | 3.8% |
| Passenger services | 5,609 | 5,086 | 523 | 10.3% |
| Construction Service Revenues | 2,507 | 1,506 | 1,001 | 66.5% |
| Other revenues | 2,474 | 2,437 | 37 | 1.5% |
| Non-Aeronautical and FSC Revenue Reduction | 0 | (53) | 53 | n.a. |
| Total NON-AVIATION SBU Revenues | 43,554 | 39,594 | 3,960 | 10.0% |
Total non-aviation business revenues in 2018 rose 10%, with all the revenue items increasing. The individual areas performed as follows.
Contributing to the growth of 10.6% on 2017 was both the retail segment, principally the strong performance of Food&Beverage, and the advertising segment due to the good performance of sales by the sub-agencies of advertising spaces.
Parking revenues grew 5.6% on the previous year, due to the increase in passenger numbers and the conversion of most of this growth, the slight increase in certain tariffs and the return of car spaces from the People Mover site.
This segment expanded 3.8%, due to the leasing of a number of buildings located off airport grounds which produced effects only for a part of the previous year, and the renegotiation of contracts at the end of 2017.
In 2018 passenger services were up 10.3% on 2017, mainly due to premium (lounge and accessory services) and self-hire services, whose performance is outlined below.
This business grew on the basis of increased passenger numbers which reflect also the gaining popularity of directly managed lounges and those managed through specialised airport lounge channels.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 23
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
shall prevail.
2018 featured the effects of the new contractual agreement with all the car hire companies in 2017 which substantially modified some of the most important parameters adopted for the calculation of the royalties. Revenue growth was also driven by the availability of new spaces for the commercial offices in the premium category, particularly requested by the market, and the renegotiation of rents.
This item's growth (66.5%) relates to increased investment in the business unit over the previous year.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change | % Change |
|---|---|---|---|---|
| Revenues from aeronautical services | 56,342 | 53,212 | 3,130 | 5.9% |
| Revenues from non-aeronautical services | 41,160 | 38,222 | 2,938 | 7.7% |
| Revenues from construction services | 15,650 | 6,735 | 8,915 | 132.4% |
| Other operating revenues and income | 940 | 977 | (37) | -3.8% |
| REVENUES | 114,092 | 99,146 | 14,946 | 15.1% |
| Consumables and goods | (1,952) | (1,852) | (100) | 5.4% |
| Service costs | (20,030) | (18,694) | (1,336) | 7.1% |
| Construction service costs | (14,905) | (6,414) | (8,491) | 132.4% |
| Leases, rentals and other costs | (8,123) | (7,668) | (455) | 5.9% |
| Other operating expenses | (3,210) | (3,465) | 255 | -7.4% |
| Personnel costs | (27,154) | (26,832) | (322) | 1.2% |
| COSTS | (75,374) | (64,925) | (10,449) | 16.1% |
| EBITDA | 38,718 | 34,221 | 4,497 | 13.1% |
| Amortisation of concession rights | (5,857) | (5,749) | (108) | 1.9% |
| Amortisation of other intangible assets | (1,323) | (989) | (334) | 33.8% |
| Depreciation of tangible assets | (2,219) | (2,085) | (134) | 6.4% |
| AMORTISATION, DEPRECIATION AND WRITE-DOWNS | (9,399) | (8,823) | (576) | 6.5% |
| Provisions for doubtful accounts | (64) | 12 | (76) | n.a. |
| Provisions for renewal of airport infrastructure | (3,752) | (2,544) | (1,208) | 47.5% |
| Provisions for other risks and charges | (291) | (240) | (51) | 21.3% |
| PROVISIONS FOR RISKS AND CHARGES | (4,107) | (2,772) | (1,335) | 48.2% |
| TOTAL COSTS | (88,880) | (76,520) | (12,360) | 16.2% |
| OPERATING RESULT | 25,212 | 22,626 | 2,586 | 11.4% |
| Financial income | 384 | 274 | 110 | 40.1% |
| Financial expenses | (620) | (852) | 232 | -27.2% |
| RESULT BEFORE TAXES | 24,976 | 22,048 | 2,928 | 13.3% |
| TAXES FOR THE YEAR | (7,049) | (5,865) | (1,184) | 20.2% |
| PROFIT (LOSS) FOR THE YEAR | 17,927 | 16,183 | 1,744 | 10.8% |
| Profit (Loss) for the year - Minority interests | 0 | 214 | (214) | -100.0% |
| Profit (Loss) for the year – Group | 17,927 | 15,969 | 1,958 | 12.3% |
A consolidated profit of Euro 17.9 million was reported in 2018, up 10.8% on 2017.
This result derives from a series of actions driven by operational activities of the Group in recent years i.e. the development of the connections network and the increase of the traffic served, the maintenance of the offer mix and the strong effect deriving from the passenger growth on all the principal business
Aeroporto Guglielmo Marconi di Bologna S.p.A. 24
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
components. In addition, the development of the managed traffic units to maximise the impact also on the non-aviation component and the closer focus on operating costs, whose numbers bore out the measures undertaken.
Operating revenues overall grew 15.1%. Specifically:
revenues from aeronautical services were up 5.9%, mainly due to improved traffic and the tariff update;
revenues from non-aeronautical services rose 7.7% due to the good performance of all category components, as outlined in the relative section;
revenues from construction services increased 132.4% following the rolling out of investments regarding concession rights:
Costs overall rose 16.1% on 2017.
These break down as follows:
Reference should be made to the personnel costs section of this report for further details.
The EBITDA totalled Euro 38.7 million, increasing 13.1% on 2017.
Depreciation and amortisation increased 6.5% due to more assets coming on stream and new Group investments; the increase in provisions (48.2%) is mainly due to higher provisions for the renewal of airport infrastructure provision deriving from the higher utilisation in the year following the important interventions on the runway undertaken during the closure of the airport in September 2018 in addition to the updating of the scheduled interventions for the next ten years.
The Operating Result was Euro 25.2 million, compared to Euro 22.6 million in 2017 (+11.4%).
Net financial expenses amounted to Euro 0.2 million compared to net expenses of Euro 0.6 million in 2017. The improvement is due the effect of interest rates on higher financial income from the discounting of provisions and to the reduction in bank interest charges on the basis of a lower debt and the review of the financial conditions applied to the loan maturing in 2024, agreed on April 6, 2017.
The result before tax totalled Euro 25 million compared to Euro 22 million in 2017 (+13.3%).
Aeroporto Guglielmo Marconi di Bologna S.p.A. 25
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
Taxes for the year of Euro 7 million compared to Euro 5.9 million, with the increase substantially owing to the higher result before taxes, in addition to the absence of fiscal benefits related to research and development investments.
The rates utilised for the calculation of deferred taxes, which reflect the expected rates on the basis of national legislation in force, are the following:
Following that outlined above the profit, entirely attributable to the Group, reported consolidated profit of Euro 17.9 million, up 1.74 million (+10.8%) on the previous year.
The adjusted EBITDA of construction services and of the non-recurring components is presented below:
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change | % Change |
|---|---|---|---|---|
| Revenues from aeronautical services | 56,342 | 53,212 | 3,130 | 5.9% |
| Revenues from non-aeronautical services | 41,160 | 38,222 | 2,938 | 7.7% |
| Other operating revenues and income | 940 | 977 | (37) | -3.8% |
| ADJUSTED REVENUES | 98,442 | 92,411 | 6,031 | 6.5% |
| Consumables and goods | (1,952) | (1,852) | (100) | 5.4% |
| Service costs | (20,030) | (19,413) | (617) | 3.2% |
| Leases, rentals and other costs | (8,123) | (7,668) | (455) | 5.9% |
| Other operating expenses | (3,210) | (3,465) | 255 | -7.4% |
| Personnel costs | (27,154) | (26,832) | (322) | 1.2% |
| ADJUSTED COSTS | (60,469) | (59,230) | (1,239) | 2.1% |
| ADJUSTED GROSS OPERATING PROFIT (ADJUSTED EBITDA) | 37,973 | 33,181 | 4,792 | 14.4% |
| Revenues from construction services | 15,650 | 6,735 | 8,915 | 132.4% |
| Construction service costs | (14,905) | (6,414) | (8,491) | 132.4% |
| Construction Services Margin | 745 | 321 | 424 | 132.1% |
| Utilities - "One-off" system charges | 0 | 719 | (719) | n.a. |
| GROSS OPERATING PROFIT (EBITDA) | 38,718 | 34,221 | 4,497 | 13.1% |
As presented in the table, excluding revenues and costs from construction services and the reversal of "one-off" system charges in the previous year, against revenue growth of 6.5%, costs increases were contained to 2.1%, resulting in an adjusted EBITDA of Euro 38 million, +14.4% on 2017.
The "one off" system charges were isolated from the account "service costs" for a better comparison of the figures between the two years and which refer to system charges relating to the AdB co-generation plant, recorded in the 2016 Financial Statements and reversed in 2017, as not due.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 26
The consolidated cash flow statement, indicating cash flows generated/absorbed from operating, investing and financing activities, is summarised below for the financial years 2018 and 2017:
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Cash flow generated / (absorbed) by operating activities before working capital changes |
38,066 | 34,351 | 3,715 |
| Cash flow generated / (absorbed) by net operating activities | 30,342 | 25,275 | 5,067 |
| Cash flow generated / (absorbed) by investment activities | (10,806) | (13,349) | 2,543 |
| Cash flow generated / (absorbed) by financing activities | (19,983) | (15,827) | (4,156) |
| Change in closing cash flow | (447) | (3,901) | 3,454 |
| Cash and cash equivalents at beginning of year | 16,209 | 20,110 | (3,901) |
| Change in closing cash flow | (447) | (3,901) | 3,454 |
| Cash and cash equivalents at end of the year | 15,762 | 16,209 | (447) |
Cash flows generated by net operating activities amount to Euro 30.3 million, increasing Euro 5.1 million on 2017 due to:
Investment activities absorbed cash of Euro 10.8 million compared to Euro 13.3 million in 2017 as follows:
Finally, financing activities absorbed cash of Euro 20 million (Euro 15.8 million in 2017), due to the payment of dividends of Euro 14.2 million (Euro 10 million in 2017) and the settlement of loan instalments maturing in the period (Euro 5.8 million in both periods).
In summary, operating activities generated in the year of Euro 30.3 million (cash flow from net operating activities), which together with the divestment of temporary liquidity of Euro 10.7 million, for a total of Euro 41 million, was utilised as follows:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 27
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
• Euro 2.4 million of equity investments;
with reduction of final cash equal to Euro 0.4 million.
The Group net financial position for 2018 against 2017 is presented below.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change | |
|---|---|---|---|---|
| A | Cash | 27 | 27 | 0 |
| B | Other cash equivalents | 15,735 | 16,182 | (447) |
| C | Securities held for trading | 0 | 0 | 0 |
| D | Liquidity (A+B+C) | 15,762 | 16,209 | (447) |
| E | Current financial receivables | 13,449 | 20,617 | (7,168) |
| F | Current bank debt | (43) | (54) | 11 |
| G | Current portion of non-current debt | (4,433) | (5,807) | 1,374 |
| H | Other current financial debt | (2,050) | (1,806) | (244) |
| I | Current financial debt (F+G+H) | (6,526) | (7,667) | 1,141 |
| J | Current net financial position (I-E-D) | 22,685 | 29,159 | (6,474) |
| K | Non-current bank debt | (14,690) | (19,109) | 4,419 |
| L | Bonds issued | 0 | 0 | 0 |
| M | Other non-current liabilities | 0 | 0 | 0 |
| N | Non-current financial debt (K+L+M) | (14,690) | (19,109) | 4,419 |
| O | Net Financial Position (J+N) | 7,995 | 10,050 | (2,055) |
The Group Net Financial Position at December 31, 2018 was Euro 8 million compared to Euro 10 million at December 31, 2017.
The decrease is due to the lower total liquidity on the one hand (the accounts D+E, equal to Euro 29.2 million compared to Euro 36.8 million at December 31, 2017, decreasing Euro 7.6 million), partially offset by the similar fall in total financial debt (accounts I + N, equal to Euro 21.2 million compared to Euro 26.8 million at December 31, 2017, decreasing Euro 5.6 million), principally due to the repayment of loans.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 28
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The Group financial position, classified according to "sources" and "uses", is presented below for the twoyear period 2017-2018:
| USES | As at 31.12.2018 | As at 31.12.2017 | Change in Absolute value |
% Change |
|---|---|---|---|---|
| Trade receivables | 14,272 | 13,220 | 1,052 | 8% |
| Tax receivables | 161 | 334 | (173) | -51.8% |
| Other Receivables | 4,500 | 3,854 | 646 | 16.8% |
| Inventories | 594 | 538 | 56 | 10.4% |
| Sub-total | 19,527 | 17,946 | 1,581 | 8.8% |
| Trade payables | (19,011) | (16,208) | (2,803) | 17.3% |
| Tax payables | (2,123) | (1,671) | (452) | 27.0% |
| Other payables | (24,244) | (22,503) | (1,741) | 7.7% |
| Sub-total | (45,378) | (40,382) | (4,996) | 12.4% |
| Assets held-for-sale | 0 | 117 | (117) | -100.0% |
| Net operating working capital | (25,851) | (22,319) | (3,532) | 15.8% |
| Fixed assets | 188,218 | 177,709 | 10,509 | 5.9% |
| Deferred tax assets | 6,108 | 6,799 | (691) | -10.2% |
| Other non-current assets | 17,712 | 21,367 | (3,655) | -17.1% |
| Total fixed assets | 212,038 | 205,875 | 6,163 | 3.0% |
| Provisions for risks, charges & severance | (17,848) | (18,743) | 895 | -4.8% |
| Deferred tax liabilities | (2,456) | (2,371) | (85) | 3.6% |
| Other non-current liabilities | (168) | (169) | 1 | -0.6% |
| Sub-total | (20,472) | (21,283) | 811 | -3.8% |
| Fixed Operating Capital | 191,566 | 184,592 | 6,974 | 3.8% |
| Total Uses | 165,715 | 162,272 | 3,443 | 2.1% |
| SOURCES | As at 31.12.2018 | As at 31.12.2017 | Change in Absolute value |
% Change |
|---|---|---|---|---|
| Net financial position | 7,995 | 10,050 | (2,055) | -20.4% |
| Share Capital | (90,314) | (90,314) | 0 | 0.0% |
| Reserves | (65,469) | (65,218) | (251) | 0.4% |
| Profit for the year | (17,927) | (15,969) | (1,958) | 12.3% |
| Group Shareholders' equity | (173,710) | (171,501) | (2,209) | 1.3% |
| Minority Interests | 0 | (821) | 821 | -100.0% |
| Total Shareholders' Equity | (173,710) | (172,322) | (1,388) | 0.8% |
| Total sources | (165,715) | (162,272) | (3,443) | 2.1% |
The Group statement of financial position shows an increase in operating net working capital compared to the end of 2017 (+Euro 3.5 million from Euro 22.3 million to Euro 25.9 million), mainly due to the increase in trade payables, tax payables and other liabilities. The former items increased due to higher purchases and investments and not related to longer payments terms which, on the contrary, decreased from 91 to
Aeroporto Guglielmo Marconi di Bologna S.p.A. 29
88 average days. The increase in "other payables" is mainly related to the boarding fee municipal surtax and the Fire Prevention Service fee.
Operating fixed capital reports an increase on December 31, 2017 (+Euro 7 million from Euro 184.6 million to Euro 191.6 million), mainly due to investments in the period which were higher than the fall in "other non-current assets" as a result of the upcoming maturity of short-term liquidity with the consequent reclassification to current assets and/or collection.
At December 31, 2018, Consolidated Shareholders' Equity was Euro 173.7 million (Euro 172.3 million at December 31, 2017): in addition to the net result, the movement reflects the distribution of dividends approved by the Parent Company's Shareholders' Meeting of April 28, 2018 of Euro 14.2 million. The Group Shareholders' Equity is of the same amount given the absence, at December 31, 2018, of minority shareholders due to the acquisition by the Parent Company of the residual 49% of Tag Bologna Srl in October 2018.
The key consolidated financial indicators for the two-year period are presented below.
| KEY INDICATORS | 2018 | 2017 | AVERAGE | |
|---|---|---|---|---|
| ROE | (Net Result/ Average Net Equity) |
|||
| 10.4% | 9.6% | 10.0% | ||
| ROI | Adjusted Operating Result/ | |||
| Average Net Capital Employed | 14.9% | 13.5% | 14.2% | |
| ROS | Adjusted Operating Result/ | |||
| Adjusted revenues | 24.9% | 23.4% | 24.1% | |
| ROCE | Adjusted Operating Result/ | |||
| Net Capital Employed | 14.8% | 13.3% | 14.0% | |
| ROD financial | Financial expenses on financial debt/ | |||
| Bank payables | 2.8% | 2.6% | 2.7% | |
| Debt ratio | Financial expenses on financial debt/ | |||
| Adjusted EBITDA | 1.4% | 2.0% | 1.7% | |
| Liquidity ratio | Current assets and assets held-for-sale | |||
| Current Liabilities | 0.90 | 1.06 | 0.98 | |
| Enlarged Solvency Margin | (Net equity+Non-current liability)/ | |||
| Non-current assets | 0.97 | 1.02 | 1.00 | |
| Financial independence | Net Equity/ | |||
| Total Assets | 0.67 | 0.66 | 0.66 |
| DSO and DPO | 2018 | 2017 | Change | |
|---|---|---|---|---|
| Aeroporto Guglielmo Marconi di Bologna S.p.A. | 30 |
| Days sales outstanding | 41 | 42 | (1) |
|---|---|---|---|
| Days payable outstanding | 88 | 91 | (4) |
Good credit control by the Group permits particularly contained average collection days and decreasing despite the increase in revenues. The average days payable of Group suppliers also decreased.
Investments totalled Euro 19.5 million in 2018, of which approx. Euro 7.8 million for the execution of the Masterplan and Euro 11.6 million on airport operations.
The main investments concluded in 2018 related to:
Furthermore, in terms of other investments in airport operations, the following work was carried out to improve the service offered to passengers and increase the efficiency of company processes:
Among the principal works not yet completed at December 31 ,2018 we report:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 31
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The total works for the realisation of the renewal and maintenance cycle of the airport infrastructure and plant under concession at December 31, 2018 amounts to Euro 4.5 million, of which Euro 0.4 million for landside interventions, Euro 3.3 million for airside interventions and Euro 0.8 million for plant interventions.
In particular, we report the renewal of a section of the runway and the extraordinary maintenance of the taxiway during the days of airport closure, in addition to miscellaneous works, including the renewal of the terminal roofing and of the cargo building, and the upgrading of the toilet facilities at the Marconi Business Lounge.
| for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change | % Change | |
|---|---|---|---|---|
| Full Time Equivalent average workforce | 464 | 448 | 16 | 4% |
| Executives | 10 | 10 | 0 | 0% |
| Managers | 30 | 29 | 1 | 3% |
| White-collar | 328 | 317 | 11 | 3% |
| Blue-collar | 96 | 92 | 4 | 4% |
| for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change | % Change | |
|---|---|---|---|---|
| Average workforce | 515 | 492 | 23 | 5% |
| Executives | 10 | 10 | 0 | 0% |
| Managers | 30 | 29 | 1 | 3% |
| White-collar | 373 | 357 | 16 | 4% |
| Blue-collar | 102 | 96 | 6 | 6% |
Source: Company workings
The increase in the workforce of 16 full-time equivalent employees compared to 2017 is mainly due to the hiring of security and operating area personnel in line with the increase in traffic.
| for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change | % Change | |
|---|---|---|---|---|
| Personnel costs | 27,154 | 26,832 | 322 | 1.2% |
Source: Company workings
The increase in personnel costs of 1.2% is mainly due to the expanded workforce as described above, in part offset by the recourse to temporary staff; in addition to normal salary increases.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 32
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The company has applied since 2014 an agreement negotiated with the trade unions for the introduction of flexible benefits. In view of the conclusion of this agreement at the end of 2017 and the new welfare legislation approved at national level in 2017, the company sought at the beginning of the year to sign a new agreement regarding these benefits.
During the first half of 2018, a supplementary Result-based bonus agreement was in addition signed.
The Municipality of Bologna, the Metropolitan City and the Trade Unions requested the Company, as the Airport Manager, to promote the signing of a protocol of understanding in relation to tender biding with the Trade Unions. On September 27, 2018 an understanding was reached with the objective to promote the full regularity of the working conditions, safety and legality within the various activities undertaken at Bologna airport and the setting up some monitoring instruments for the tender biding processes. A large part of these matters is already outlined in the Ethics Code of the Company and regard the conduct and operational instructions of line and staff functions.
Training in 2018 concerned:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 33
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The Group remains focused on all major environmental issues, from its impact on air quality, to noise pollution, energy conservation and alternative energy.
During 2018, the company introduced its new air-quality monitoring system and relative monthly analysis of the data, with publication on the internet site. In addition, during the year, the company was involved in the activity relating to the verification of the non-applicability to the Environmental Impact Evaluation (VIA) of the Master Plan as indicated in greater detail below.
In 2018 the process continued for the approval of the updating of the Masterplan with the issue of the opinion of the non-applicability to the Environmental Impact Evaluation (VIA) by the Environment Ministry on November 26. The review of the Masterplan is particularly based on a new philosophy for the development of the airport and the current land side area, in addition to expansion over the period until 2030. The current airport will expand both airside (departures lounge in the first expansion phase) and land side (new frontage, new arrivals area and new roadways in the second phase).
In the first half of 2018, the design of the first phase of the existing airport's extension concluded; in the second half of the year the project was reviewed by ENAC for the subsequent approval in early 2019. This project is one of the main components of the Masterplan and involves an expansion of over 24,000 sq./m. of the current departures lounge, with a new pier and new central area available to all passengers, alongside new commercial spaces.
During 2018, a new edition of the Airport Manual was published and the safety policy of the airport was updated in order to create an efficient balance between two objectives: reinforce the safety level through the promotion of reporting activities and at the same time install a blame/no blame culture aimed at the deontological responsibility of the operators.
In addition, during the year the Safety and Compliance Monitoring Management System undertook over 90 internal and external audits, prepared a definitive policy for the management of the changes of an operational, organisational and infrastructural nature and a new hazard log was implemented which saw the active involvement of all Post Holders.
Finally, in addition to the ordinary safety activity, frequent meetings were held (safety meetings) with operators involved in airside activities, educational videos continued on the most critical operational security issues and airside safety was increased through 22 direct inspections.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
During 2018, the Parent Company undertook initiatives to improve the Passenger Experience through the reduction of the queueing times, more efficient communication and a better passenger approach in the control phase.
From February 2017 the surveillance and patrolling service became part of the activities of the airport manager, as required by legislation. Therefore, a Central Coordination command centre was set up 24/24 by a Security Supervisor with responsibility for security on airport grounds through a CCTV system and through an access control system. A patrolling service was also introduced on the airport grounds which was undertaken by an independent control service. In 2018 a radar control system was installed on the airport perimeter, integrated to the current control platform on CCTV.
The service quality, in terms of regulatory of the service, hospitality, communication and information, represents a key strategic objective of the Parent Company. The service quality integrates a strong focus on passengers' needs with a vision open to new trends in the industry, with the objective to offer the passenger airport infrastructure and services which will render a satisfactory travel experience.
In order to guarantee a good level of the service quality and of the infrastructures, Bologna Airport constantly monitors performances, accompanied by a regular comparison with other airport operators.
The quality performance of Bologna Airport in 2018 was positive, as illustrated by the increase in the satisfaction of passengers compared to 2017 on several fronts. However, there were small signs of a slowdown in some indicators - mainly related to infrastructure capacity and comfort. This decline was however moderate and against generally very good performance levels - signs of an ability to manage difficult situations which has emerged in some periods of the year, in particular due to pressures on traffic. The general satisfaction index rose to 98.5% and parallel rises in satisfaction were seen in airport
cleanliness, the cleanliness and functionality of the bathrooms and the regularity and rapidity of the service. In relation to the quality of services provided, the waiting time for security controls and check-in decreased
on 2017, reporting a significant turnaround despite the increase in traffic. The waiting time for baggage delivery confirmed the upward trend both for first and last bags: the Manager is undertaking corrective measures to monitor and inform the handlers which directly manage the baggage reclaim service.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 35
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
| Key Quality Indicators | 2018 | 2017 | |
|---|---|---|---|
| Overall satisfaction | % of satisfied passengers | 98.5% | 97% |
| Service regularity and speed | % of satisfied passengers | 97.5% | 97% |
| General cleaning level perception | % of satisfied passengers | 98.6% | 97.3% |
| Toilet cleanliness and functionality level perception |
% of satisfied passengers | 96.0% | 93.2% |
| Check-in queue waiting | Time in 90% of cases | 16'09'' | 18'22'' |
| Waiting time for baggage screening control |
Time in 90% of cases | 5'56'' | 6'22'' |
| First/last bag return time from aircraft | First bag (time in 90% of cases) | 25' | 24' |
| block-on (from system) | Last bag (time in 90% of cases) | 33' | 31' |
The satisfaction results of the ASQ - Airport Service Quality - programme of ACI World were positive. The 2018 general satisfaction index was 3.77 (in line with 2017 of 3.79) and was driven by the very good results for the information service, security controls and airport personnel.
In accordance with the current regulatory framework and the tariff models created by the Airport Regulation Authority ("ART"), in 2015 AdB launched and successfully completed the tariff-setting process for the period 2016-2019, closely coordinated and supervised by the said Authority.
In October 2018, in accordance with the Authority's Model, consultation was conducted with the airlines and the adjusted tariff levels are applicable from January 1, 2019.
ART with motion No. 92/2017 approved the new tariff Models, based on which the company will define the tariffs for the four-year period 2020-2023, commencing the relative consultation in 2019. With motion No. 84/2018, ART subsequently commenced a review procedure of the airport fee regulation models approved with Motion No. 92/2017, procedure still in course.
The European Commission, with Regulation (EC) 139 of February 12, 2014, entering into force on March 6, 2014, adopted the enacting regulation of Regulation (EC) No. 216/2008. This new regulation was the basis for the conversion of the airport certificate of the Parent Company in 2017, with the objective to maintain a high and uniform level of civil aviation security in Europe, in accordance with the requisites outlined in the European regulation and European Security Aviation Agency (EASA) rules. In particular, the Airport Manager, in the gradual configuration as the "Airport Authority", was assigned: the responsibility of the functioning of the airport and new and more stringent duties in relation to coordination and control of public and private parties, as well as training of airport personnel, in relation to maintaining continuous operating safety levels (so-called " Continuous Safety").
Aeroporto Guglielmo Marconi di Bologna S.p.A. 36
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
Decree-Law No. 145/2013, known as the "Destination Italy Act", introduced rules for incentives, subsidies and all other forms of payment from airport managers for airlines in support of the launch and development of routes intended to meet and promote demand in the affected user catchment areas. In particular, Article 13, paragraphs 14 and 15, of the said Decree, as amended by the conversion law, Law No. 9 of February 21, 2014, provided that the Ministry of Infrastructure and Transport (hereinafter the "MIT") was to issue specific implementing guidelines, in consultation with ART and the Italian Civil Aviation Authority ("ENAC").
On August 11, 2016, the MIT thus issued a ministerial decree adopting "Guidelines for incentives for the launch and development of routes by airlines...", effectively repealing the previous guidelines of October 2, 2014 and replacing the previous rules with comprehensive new regulations on the subject, applicable solely to incentives of public origin, requesting to specify if the MEO test was undertaken or otherwise.
On a regulatory level a new communication obligation was introduced by the Italian Airport Regulation Authority (ART) relating to the incentives granted by the airport managers in favour of airline carriers. This obligation, which requires an annual detailed communication by carrier, in particular, was enacted with ART motion No. 92/2017 on approval of the current tariff Models which will be applied also to AdB in the determination of the next tariff period (2020-2023).
The Parent Company since 2002 publishes a traffic development policy on its website regarding the incentive plan, with the aim of ensuring fair, transparent and non-discriminatory access, and thereby ensuring the broadest possible participation.
Article 1, paragraph 1328, of Law No. 296 of December 27, 2006 (2007 Finance Law) requires the payment by Italian airport management companies of an amount, to be calculated proportionally to its airline traffic, in order to lower the cost to the State for the provision of fire prevention services (so-called Fire Prevention Fund). This purpose was modified by Article 4, paragraph 3-bis of Law Decree No. 185/2008, entering into force on January 29, 2009, which separated the relationship between those required to fund the so-called Fire Prevention Fund and the benefit deriving from the activity financed, allocating the Fund to differing purposes than its original scope related to airport fire prevention services.
Following the entry into force, from January 1, 2016 of Article 1, paragraph 478, of Law No. 208 of December 28, 2015 implementing "Provisions for the drawing up of annual and multi-year budgets of the State" (2016 Stability Law), the Legislature, through Law Decree No. 159 of October 1, 2007 converted with modifications by Law No. 222 of November 29, 2007, introduced the qualification of "payments", with reference to the contributions allocated to the Fire Prevention Fund. This latter was subject to a constitution legality opinion, following the deferral by the Court of Cassation, through reasoned ordinance issued on December 28, 2016. From July 26, 2018, as per Article 30 of Law No. 87 of 1953, the challenged provision of Article 1, paragraph 478 of Law No. 208 of December 28, 2015, declared illegal, with the Constitutional Court order No. 167/2018, may no longer be applied.
Within the judicial framework we must also mention the important judgement of the Court of Cassation of February 1, 2019, No. 3162, which outlines a definitive framework encompassing the complex Fire Prevention Fund, in which the following was definitively ascertained and declared:
the nature of the tax contribution to be paid;
the competent tax jurisdiction.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
This pronouncement of the Cassation recalls, in addition, with particular importance from a general judicial principle viewpoint, the ruling handed down by the Rome Provincial Tax Commission No. 10137/51/14, which ascertained the "non-obligation to pay the tax from 2009, due to the non-applicability of its original legislative purpose as per Article 4, paragraph 3-bis of Legislative Decree No. 185 of 2008". For further details, reference should be made to the Disputes section.
Through inter-ministerial Decree No. 357 of October 29, 2015, the Ministry for Infrastructure and Transport, together with the Ministry for the Economy and Finance, established the new further boarding fee municipal surtax (as per Article 2, paragraph 11 of Law No. 350 of December 24, 2003), allocated to finance the charge deriving from the application of the provisions of paragraph 21 of Article 13 of Law Decree No. 145/2013, converted, with modifications, into Law No. 9 of February 21, 2014. In particular, the inter-ministerial Decree No. 357/2015, in force from January 1, 2016, established that the new further boarding fee municipal surtax to be allocated to INPS, as per Article 2, paragraph 11 of Law No. 350 of December 24, 2003, and subsequent modifications, was equal to Euro 2.50 for the year 2016, to Euro 2.42 for the year 2017 and Euro 2.34 for the year 2018.
For the period September 1 - December 31, 2016 Article 13-ter of Law Decree No. 113 of June 24, 2016, introduced by Law conversion No. 160 of August 7, 2016 suspended the application of this increase; the increase was then suppressed, from January 1, 2017, by Article 1, paragraph 378 of Law No. 232/2016.
Therefore, for the boarding fee for the period from January 2017, the airport management companies were required to pay to INPS the amounts received as the passenger municipal surtax equal to Euro 3 per passenger as per the provisions of paragraph 2, Article 6-quater of Law Decree No. 7/2005, converted into Law No. 43 of 2005 and equal to Euro 2 as per the provisions of paragraph 75 of Article 4 of Law No. 92/2012.
Law Decree No. 4 of January 28, 2019 establishes "Urgent provisions on citizens income and pensions" (socalled "Quota 100" Decree and Citizens income) in force from January 29, 2019, as per Article 26 that:
· for the year 2019, the Euro 3, already included in the municipal surtax and allocated up to December 31, 2018 to the Airline transport solidarity fund, shall be paid to the above-mentioned Fund for 50% with the remaining 50% to the INPS Assistance support and pension management;
· from 2020, the Euro 3 will be entirely paid to the INPS Assistance support and pension management;
· the provisions were repealed, for the year 2019, which provided for an increase in the municipal surtax equal to Euro 0.32 per passenger.
For the year 2018 and, in view of that outlined above, also in 2019, the boarding fee municipal surtax at the Bologna airport totals Euro 6.50.
The Parent Company has voluntarily adopted since 2008 the Organisation, Management and Control Model (hereafter also the "Model"), established by Legislative Decree No. 231 of June 8, 2001 and latterly updated with Board motion of December 17, 2018 which also renewed the composition of the Board.
The Model integrates the Anti-corruption Policy which fights against active and passive corruption.
We also report that, in line with best domestic and international practice, in 2016 the company adopted the Whistleblowing Policy which ensures, also organisationally, that the employee reporting illegal conduct is not subject to prejudicial disciplinary consequences and is protected in the case of "direct or indirect discriminatory measures, with effects on working conditions for reasons related directly or indirectly to complaints". This protection, however, has a limit in the "cases of responsibility against slander or defamation or in accordance with Article 2043 of the Civil Code". The whistleblowing instrument is a means for the prevention and correction of malfunctioning or degeneration of the internal control system or management of the company/entity, which may result in risks for the employees or for the company/entity
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
or the committal of offenses, implementing the activation of adequate actions of investigation, remediation and mitigation. Within this initiative a technological application system was created for the management of reporting, through the development and implementation of a platform which permits in general all internal and external stakeholders (employees, shareholders, partners, etc.) to send reports to preestablished addressees, ensuring effective and confidential communication. The technological platform became operative from November 1, 2016.
The Whistleblowing Policy was therefore integrated into the Model from April 2018, following the regulatory obligation to implement an IT channel within the Model which ensures confidentiality of the identity of the reporting person and through which it is possible to report circumstances of illicit behaviour. For details upon the Model, reference should be made to the Corporate Governance and Ownership Structure Report.
Article 15-quinquies, paragraph 1, of Legislative Decree No. 148 of October 16, 2017, converted, with amendments, by Law No. 172 of December 4, 2017, amended Article 703 of the navigation code, replacing the original fifth paragraph with the current fifth, sixth, seventh, eighth and ninth paragraphs, as follows:
"On the natural conclusion of the concession, the succeeding concession holder has the obligation to pay to the exiting concession holder the succession fee. Unless otherwise established in the concession act, this value, in relation to buildings and fixed installations existing on the airport grounds and on areas included therein concerning the expansion of the airport grounds, realized or acquired by the outgoing concession holder with its own resources, included in the Regulatory Agreement and approved by ENAC, is equal to the value of the works at the date of succession, net of depreciation and any government grants, limited to the portion of said assets ascribed to the services subject to tariff regulation identifiable in the certified regulatory analytical accounting presented by the outgoing concession holder for the immediately preceding year.
The buildings and fixed installations existing at the date of succession on the airport grounds, realized or acquired by the outgoing concession holder with its own resources and destined for commercial activities, as such not subject to tariff regulation, remain the property of the state, without any reimbursement due to the concession holder, except for the buildings and fixed installations of a commercial nature for which realization or acquisition has been authorized by ENAC as functional to the airport activity and to the enhancement of the airport, for which a reimbursement is due equal to the residual book value of the regulatory analytical accounting.
The outgoing concession holder is obliged to continue with the administration of the ordinary operations of the airport on the same conditions set at the time of the concession act until succession by the incoming concession holder, subject to the latter's payment of the succession amount due, unless otherwise determined in a justified decision by ENAC, in relation to the adequate performance of the service.
In case of the succession of the concession, or when the concession ceases before expiry, the incoming concession holder has the obligation to reimburse the outgoing concession holder the undepreciated residual book value of the non-removable works, as indicated in the previous periods concerning the natural expiry of the concession. This is subject to application of Art. 1453 of the civil code.
The regulation concerning the value of succession, reimbursements and indemnities referred to in this article does not apply if mechanisms for determining the value of succession, reimbursements and indemnities are already provided for in the airport management agreements in force, which remain unchanged in such case".
During 2018, the Parent Company undertook detailed analysis on the Terminal Value regulation both from a legal and accounting viewpoint. Relating to this latter, together with other airport management companies, assessments were initiated of the regulation in order to ensure its correct transposition where impacting financial reporting. Considering that the impact of the Terminal Value at December 31, 2018 is
Aeroporto Guglielmo Marconi di Bologna S.p.A. 39
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
not significant, the Group opted not to state this in the financial statements while awaiting the conclusion of the detailed analysis in progress.
With Legislative Decree No. 254 of December 30, 2016, implementing Directive 2014/95/EC, companies qualifying as large scale "public interest entities" are required to prepare and publish an individual or consolidated report containing, for each financial year, information concerning environmental, social, personnel, human rights and anti-corruption matters. This information may be contained in the Directors' Report or in a separate document. The Directors are responsible for preparing and publishing the Report. These documents are subject to Board of Statutory Auditors and Independent Audit Firm review. The European Regulation was drawn up in consideration of the recognition that "non-financial communication is fundamental to manage the transition towards a sustainable global economy, combining long-term profitability, social justice and environmental protection".
The company, in accordance with Article 5, paragraph 3, letter b of Legislative Decree 254/2016 has drawn up the consolidated non-financial information as a separate report. The 2018 consolidated non-financial information report, drawn up as per the "GRI Standards", is available on the Group website.
The Parent Company implemented on May 25, 2018 a specific model in order to ensure adequate compliance with European Regulation No. 679/2016 (GDPR - General Data Protection Regulation) - and the necessary adjustment of the organisation, processes, company deeds and procedures. A specific Register was set up and an analysis of the risk in order to adopt adequate security measures. The model is implemented and developed in accordance with the principles outlined in the GDPR of privacy by design and privacy by default through a dedicated inter-departmental body (Data Protection Committee) comprising internal specialist personnel. The Company appointed a Data Protection Officer (DPO) and periodic audits are undertaken to ensure correct compliance with legislation.
By order of the Ministry of Economic Development of May 2, 2017, published in edition No. 104 of Italy's Official Gazette dated May 6, 2017, Alitalia - Società Aerea Italiana S.p.A was admitted to the extraordinary administration procedure, with immediate effect and three Extraordinary Commissioners were appointed. The Court of Civitavecchia declared Alitalia - Società Aerea Italiana S.p.A. in extraordinary administration ("Alitalia SAI in EA") insolvent by judgment of May 11, 2017. The decree of the Ministry of Economic Development of May 12, 2017 was then published in edition no. 124 of the Official Gazette of May 30, 2017, also admitting Alitalia Cityliner S.p.A. to the extraordinary administration procedure and appointing the same panel of commissioners as for Alitalia.
Article 1, paragraph 1 of Legislative Decree No. 38 of April 27, 2018, extended from April 30, 2018 to October 31, 2018 the deadline established by Article 12, paragraph 1 of Legislative Decree No. 148 of 2017, concerning the execution of the transfer procedure of business units involved in the extraordinary administration of Alitalia S.p.A. and established that the entire state loan of Euro 900 million be repaid by December 15, 2018. Conversion Law No 77 of June 21, 2018, with modifications, of Legislative Decree No. 38/2018 in addition established precise disclosure obligations upon the Commissioners to the Parliament.
The half-year commissioner's report states that the three proposals with regards to the transfer of assets did not meet the requirements established in the tender rules as without binding content and the essential elements required, and therefore with a difficult to envisage future path.
The Parent Company, as part of the extraordinary administration procedure, in a timely manner raised the receivable matured to May 2, 2017 of Euro 0.78 million, of which Euro 0.66 million requested in preference
Aeroporto Guglielmo Marconi di Bologna S.p.A. 40
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
form as per Article 1023 No. 1 of the navigation code, and Euro 0.12 million as unsecured. At the statement of liabilities hearing fixed for February 6, 2018, only the receivables of employees were examined. For the examination of the various receivables, after various postponements, the hearing was fixed for February 20, 2019, but this date was again postponed for a date to be determined.
The IRESA - regional tax on airplane noise emissions - was instigated as a tax by the Emilia-Romagna Region through Regional Law No. 15 of December 21, 2012 (BUR 285/2012), Articles 12-18.
The regulation for this tax was subsequently suspended for an undetermined period by Regional Law No. 28 of December 20, 2013. In particular, Article 49 within the "Amendments to the Regional Law No. 15 of 2012" states "The provisions contained in chapter III (IRESA) will be applicable from a period to be subsequently established by regional law". In December 2018, the Emilia-Romagna Regional Assembly, at Article 33 of Legislative Motion No. 103/2018 replaced - in the above-mentioned Article, the words "will be applicable from a period to be subsequently established by regional law", with the words "from July 1, 2019". The enacting law, with the time scale so amended, provides that the IRESA is due by the airport operator for the sound emissions produced by civil aircraft, for each take-off and landing and is determined taking into account the maximum weight at take-off (MTOW) and the level of the sound emissions of the aircraft. It also provides that the payment will be made by the carriers to the airport manager which then pays the sum to the Region with the method for the payment, transmission and composition of the sums subsequently defined by the Regional Council which may implement a specific convention deed with the airport managers. The allocation of the funds, net of the above-mentioned convention costs, will be attributed 50% to the completion of the acoustic monitoring system and acoustic anti-pollution and to any indemnity for the residence in zones A and B in the airport's surrounding area as defined by the Environmental Ministry Decree of October 31, 1997. At the date of this report, given the role of the airport manager, the Parent Company has commenced discussions with both the Emilia Romagna Region and with the Bologna Airport Stakeholders Committee in order to correctly manage the new tax at the date of entry into force, while also reconfirming the considerations and perplexities already expressed, given the nonuniform imposition of this tax which results in potential harm - on a competitive basis - for the management company of the "Guglielmo Marconi" airport.
This section outlines the main - fundamental in financial terms - disputes and/or those which in the period saw significant legal and/or non-legal developments, without therefore providing an exhaustive outline of all positions for which specific amounts have been allocated to the disputes risk provision.
In relation to the contribution to the Fund set up by the 2007 Finance Act in order to reduce the cost to the State for the organisation and provision of the fire prevention service at Italian airports, the Parent Company promoted, in 2012, a specific judicial action before the Rome Civil Tax Court, substantially requesting the Judge to ascertain and declare the cessation of the obligatory contribution following the change in the purpose of the afore-mentioned Fund, i.e. from January 1, 2009. In fact, from that date the resources accumulated in the Fund were allocated to the generic requirements of the public purse and civil defence, as well as for financing salary increases of the Fire Prevention Service.
Currently the Rome Court, following a series of postponements and suspensions deriving from the systematic reassignment of the case to different judges, has not outlined its conclusions. However with the existence, over the years, of a consolidated jurisprudence (ex pluris Rome Provincial Tax Court No. 10137/51/2014 - passed into Law - and Rome Provincial Tax Court No. 2517/2019) sealed by the pronouncement of the Court of Cassation No. 3162 of February 1, 2019 which affirmed: i) the nature of the contribution to the Fire Prevention Fund, ii) the consequent competent tax jurisdiction, iii) the non-
Aeroporto Guglielmo Marconi di Bologna S.p.A. 41
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
obligation to pay the tax from 2009, due to the non-applicability of its original legislative purpose, the Company is awaiting a definitive pronunciation of non-competence by the civil judge.
In relation to the above-mentioned civil case, promoted by the Company before the Rome Court, the Tax Administrations notified however on January 16, 2015 an injunctive decree relating to the presumed contribution to the Fire Prevention Fund for the years 2007, 2008, 2009 and 2010. This decree, containing clear material and formal errors, was immediately opposed, requesting the cancellation of the decree or, in replacement, to declare upon its jurisdiction and to order the reinstatement of the case before the Rome Court. On December 20, 2017, the Bologna Court issued a jurisdiction ordinance, declaring the Tax Commission as the competent judge, which cancelled Injunction Decree No. 20278/14.
Unexpectedly and incomprehensively, on May 24, 2018, the State District Lawyer notified an appeal against the ordinance of the Bologna Court of December 20, 2017.
The Company therefore appealed (RG No. 2020/18), fully outlining its defence and invoking, preliminarily, the clear lack of jurisdiction of the Bologna Court.
The company in order to obtain a direct recognition of the principles embodied universally by the Court of Cassation and by the Rome Provincial Tax Court will present its case before the tax judge, once proceedings may take place, of the cases currently before the Rome Court (RG No. 22375/12) and the Bologna Court of Appeal (RG No. 2020/18).
The current legal scenario allows for a more positive evaluation of the entire issue concerning the Fire Prevention Fund but, while awaiting a future direct recognition of the principles embodied in a uniform manner by the recent key judgements (see Regulatory Framework Chapter), there are no new judicial or extrajudicial issues arising with direct effects on the Parent Company, such as to result in a change in the treatment in the financial statements of the contribution to the Fire Protection Fund.
In accordance with the disclosure requirements set out in Art. 2428, paragraph 2, No. 6-bis of the Italian Civil Code, the Group holds financial instruments that qualify as significant in quantitative terms. However, considering the criteria that inform its choice of investments, such as:
the Group believes the financial risks – understood as the risks of changes in the value of the financial instruments – to be limited.
The Group is not subject to foreign exchange risk since it does not undertake transactions in foreign currencies.
In view of the significant commitments to infrastructure development, liquidity risk could manifest as difficulty in obtaining timely, cost-effective financing. To meet the needs deriving from its investment plan, the Group has taken comprehensive steps to obtain the medium-term financial resources required for its development. In particular, the Parent Company's recent IPO has improved the Group's liquidity and financial profile. Finally, the cash flows, funding requirements and the liquidity of the Group companies are constantly monitored in order to ensure the efficient management of financial resources.
The Group has sought to minimise interest rate risk, in view of its outstanding financing, by entering into both fixed-rate and floating-rate facilities.
Finally, in relation to the credit risk the continuing global economic crisis had a strong negative impact on the airline industry, with a consequent increase in the credit risk. The Group's credit risk is moderately concentrated, in that 48% of its accounts receivable are claimed from its top ten clients. This risk is offset through specific and trade payable management and control tools and procedures, in addition to adequate
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provisioning for doubtful accounts, according to the principles of prudency, in continuity with the financial statements of the previous year.
The commercial policies pursued by the Group to limit its exposure involve:
Group operations are significantly based on relations with the leading airlines at the airport and to which the Group offers its services, including - in particular - Ryanair. Due to the large proportion of total passenger flights at the airport operated by Ryanair, the Group is exposed to the risk that the airline may scale back or discontinue entirely its operations at the airport. Ryanair passengers accounted for 44.9% of the airport's total traffic volumes in 2018. AdB and Ryanair strengthened their partnership on October 27, 2016 by entering into a long-term agreement set to expire in 2022, whereby they undertook to increase the number of destinations served by Bologna airport, in addition to achieving a consistently high standard of service due to the airport's continuing investments and the airline's "Always Getting Better" programme. The agreement lays out a scheme relating to the airport's traffic development policy and Ryanair's commitment to abide by it, in addition to a contractual safeguard mechanism that ensures that the objectives will be met. Although in the Company's opinion Bologna airport is of strategic importance to the airline, it is still possible that Ryanair may decide to change the routes served, significantly reducing or discontinuing entirely its flights at the airport, or that at some point in the future the agreement might not be renewed, in whole or in part, or might contain conditions less favourable for the Group. Any reduction or stoppage of flights by the afore-mentioned airline or the stoppage or change to flights with other destinations with high passenger traffic volumes may impact - even to a significant degree - the Group financial statements. In the light of the interest shown by low-cost carriers in Bologna airport and of general traffic development at the airport, the Company believes that the Group could reasonably weather a possible discontinuation or limitation of flights by Ryanair through the possible redistribution of passenger traffic to the other airlines operating at the airport and the airport's ability to attract new carriers. However, there remains the possibility that if a significant period of time were to elapse from the discontinuation of flight operations and the partial or complete replacement of the lost flights by other carriers, or if such replacement were to prove more difficult than expected or wholly or partially infeasible, such a discontinuation or reduction of flights could have an adverse effect, including to a material degree, on the Group's financial performance and financial position.
The Parent Company is exposed to the risk of a decrease in the margins of its Aviation Business Unit due to an increase in traffic volumes by airlines that receive incentives. In accordance with its incentive policy aimed at developing traffic and routes at the Airport, the Company pays some airlines – including both legacy and low-cost carriers – incentives tied to passenger traffic volumes and new routes. This policy limits incentives to levels compatible with positive revenue margins for the Group on each airline's operations. However, should passenger traffic and the routes operated by airlines receiving incentives increase over time, the Aviation Business Unit's positive margins could decline proportionally, with a negative impact, possibly to a material degree, on the Group's financial performance and financial position.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 43
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
Although the low-cost segment's share of the Italian national market is increasing, the Company manages this risk by actively developing a traffic mix that permits it to maintain positive margins.
The Parent Company invests in the Airport on the basis of an Action Plan approved by the Italian Civil Aviation Authority (ENAC). AdB could encounter difficulties in implementing the investments provided for under the Action Plan in a timely manner due to unforeseeable events or delays in the process of obtaining authorisation for and/or executing the works, with positive adverse effects on the amount of the tariffs that may be applied and possible risks of withdrawal from or termination of the Agreement. The Action Plan was drafted on the basis of the investments envisaged in the Master Plan according to a modular approach, the main driver of which is air traffic performance.
The Aeroporto Guglielmo Marconi di Bologna S.p.A. Group's core business involves acting as concession holder operating under special exclusive rights to the Bologna airport grounds. Primarily for this reason, it operates in an industry that is highly regulated at the domestic, supranational and international levels. Any change to the regulatory framework (and in particular any changes in relations with the state, public bodies and sector authorities, the determination of airport fees and the amount of concession fees, the airport tariff system, the allocation of slots, environmental protection and noise pollution) may impact operations and Company and Group results.
In the Group Consolidated Financial Statements at December 31, 2018, non-current assets include, among others, concession rights for Euro 166 million and Euro 157 million at December 31, 2017. They accounted for 63.77% of total assets at December 31, 2018 and for 60.02% at December 31, 2017. Concession Rights accounted respectively for 95.73% of Group shareholders' equity at December 31, 2018 and for 91.27% at December 31, 2017. These amounts represent the values of the concession rights as determined in accordance with the application of interpretation IFRIC 12 – Service Concession Arrangements ("IFRIC 12") to all assets set to revert to the grantor, ENAC, received in 2004.
When preparing the Group's Consolidated Financial Statements, the concession rights were tested for impairment in accordance with IAS 36.
The impairment test performed did not identify any impairment of the carrying amounts of the concession rights in 2018 and no impairment losses were therefore recognised on the assets concerned.
For further details, reference should be made to the "Test on the recoverability of assets and group of assets" paragraph at Note 1 of the 2018 Consolidated Financial Statements.
Due to the cyclical nature of the sector in which the Group generally operates, higher revenues and operating results are expected in the third quarter rather than in the first and final quarters of the year. Higher revenues are concentrated in June-September, during the peak summer vacation period
Aeroporto Guglielmo Marconi di Bologna S.p.A. 44
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
experiencing maximum usage levels. In addition, there is a strong business passenger component, due to the characteristics of the local business community and the presence of internationally renowned trade fair events, which offsets the seasonal peaks of tourist activity. Accordingly, financial performance figures for interim periods may not be representative of the Group's financial performance and financial position situation at the annual level.
The table below summarises the economic and financial performance of the Parent Company in the twoyear period under consideration; for the relevant comments, reference should be made to chapter 3 as the numbers are similar to the Group.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change | % Change |
|---|---|---|---|---|
| Revenues from aeronautical services | 51,084 | 47,636 | 3,448 | 7.2% |
| Revenues from non-aeronautical services | 40,636 | 37,687 | 2,949 | 7.8% |
| Revenues from construction services | 15,620 | 6,650 | 8,970 | 134.9% |
| Other operating revenues and income | 1,053 | 1,005 | 48 | 4.8% |
| Revenues | 108,393 | 92,978 | 15,415 | 16.6% |
| Consumables and goods | (755) | (808) | 53 | -6.6% |
| Service costs | (18,514) | (17,270) | (1,244) | 7.2% |
| Construction service costs | (14,876) | (6,333) | (8,543) | 134.9% |
| Leases, rentals and other costs | (7,979) | (7,529) | (450) | 6.0% |
| Other operating expenses | (3,158) | (3,407) | 249 | -7.3% |
| Personnel costs | (25,876) | (25,522) | (354) | 1.4% |
| Costs | (71,158) | (60,869) | (10,289) | 16.9% |
| GROSS OPERATING PROFIT (EBITDA) | 37,235 | 32,109 | 5,126 | 16.0% |
| Amortisation of concession rights | (5,659) | (5,552) | (107) | 1.9% |
| Amortisation of other intangible assets | (1,320) | (964) | (356) | 36.9% |
| Depreciation of tangible assets | (2,166) | (2,010) | (156) | 7.8% |
| Amortisation, depreciation & write-downs | (9,145) | (8,526) | (619) | 7.3% |
| Provisions for doubtful accounts | (42) | 17 | (59) | n.a. |
| Provisions for renewal of airport infrastructure | (3,696) | (2,537) | (1,159) | 45.7% |
| Provisions for other risks and charges | (284) | (236) | (48) | 20.3% |
| Provisions for risks and charges | (4,022) | (2,756) | (1,266) | 45.9% |
| Total Costs | (84,325) | (72,151) | (12,174) | 16.9% |
| Operating Result | 24,068 | 20,827 | 3,241 | 15.6% |
| Financial income | 355 | 263 | 92 | 35.0% |
| Financial expenses | (589) | (813) | 224 | -27.6% |
| Result before taxes | 23,834 | 20,277 | 3,557 | 17.5% |
| Taxes for the period | (6,733) | (5,368) | (1,365) | 25.4% |
| Profit (loss) for the year | 17,101 | 14,909 | 2,192 | 14.7% |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 45
The adjusted EBITDA of construction services and of the non-recurring components in the two years is presented below:
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change | % Change |
|---|---|---|---|---|
| Revenues from aeronautical services | 51,084 | 47,636 | 3,448 | 7.2% |
| Revenues from non-aeronautical services | 40,636 | 37,687 | 2,949 | 7.8% |
| Other operating revenues and income | 1,053 | 1,005 | 48 | 4.8% |
| Adjusted revenues | 92,773 | 86,328 | 6,445 | 7.5% |
| Consumables and goods | (755) | (808) | 53 | -6.6% |
| Service costs | (18,514) | (17,989) | (525) | 2.9% |
| Leases, rentals and other costs | (7,979) | (7,529) | (450) | 6.0% |
| Other operating expenses | (3,158) | (3,407) | 249 | -7.3% |
| Personnel costs | (25,876) | (25,522) | (354) | 1.4% |
| Adjusted costs | (56,282) | (55,255) | (1,027) | 1.9% |
| Adjusted Gross Operating Profit (Adjusted EBITDA) | 36,491 | 31,073 | 5,418 | 17.4% |
| Revenues from construction services | 15,620 | 6,650 | 8,970 | 134.9% |
| Construction service costs | (14,876) | (6,333) | (8,543) | 134.9% |
| Construction Services Margin | 744 | 317 | 427 | 134.7% |
| Utilities - "One-off" system charges | 0 | 719 | (719) | n.a. |
| GROSS OPERATING PROFIT (EBITDA) | 37,235 | 32,109 | 5,126 | 16.0% |
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change | |
|---|---|---|---|---|
| A | Cash | 22 | 22 | 0 |
| B | Other cash equivalents | 12,803 | 13,925 | (1,122) |
| C | Securities held for trading | 0 | 0 | 0 |
| D | Liquidity (A+B+C) | 12,825 | 13,947 | (1,122) |
| E | Current financial receivables | 11,037 | 19,610 | (8,573) |
| F | Current bank debt | (40) | (52) | 12 |
| G | Current portion of non-current debt | (3,920) | (5,298) | 1,378 |
| H | Other current financial debt | (2,050) | (1,806) | (244) |
| I | Current financial debt (F+G+H) | (6,010) | (7,156) | 1,146 |
| J | Current net financial position (I-E-D) | 17,852 | 26,401 | (8,549) |
| K | Non-current bank debt | (11,436) | (15,345) | 3,909 |
| L | Bonds issued | 0 | 0 | 0 |
| M | Other non-current liabilities | 0 | 0 | 0 |
| N | Non-current financial debt (K+L+M) | (11,436) | (15,345) | 3,909 |
| O | Net Financial Position (J+N) | 6,416 | 11,056 | (4,640) |
| USES | As at 31.12.2018 | at 31.12.2017 | Change in absolute value |
% Change |
|---|---|---|---|---|
| Trade receivables | 13,759 | 12,561 | 1,198 | 9.5% |
| Tax receivables | 3 | 201 | (198) | -98.5% |
| Other Receivables | 4,355 | 3,769 | 586 | 15.5% |
| Inventories | 527 | 488 | 39 | 8.0% |
| Sub-total | 18,644 | 17,019 | 1,625 | 9.5% |
| Trade payables | (18,471) | (15,739) | (2,732) | 17.4% |
| Tax payables | (2,063) | (1,595) | (468) | 29.3% |
| Other payables | (24,078) | (22,242) | (1,836) | 8.3% |
| Sub-total | (44,612) | (39,576) | (5,036) | 12.7% |
| Assets held-for-sale | 0 | 117 | (117) | -100.0% |
| Net operating working capital | (25,968) | (22,440) | (3,528) | 15.7% |
| Fixed assets | 182,802 | 172,168 | 10,634 | 6.2% |
| Deferred tax assets | 5,822 | 6,487 | (665) | -10.3% |
| Other non-current assets | 20,747 | 20,433 | 314 | 1.5% |
| Total fixed assets | 209,371 | 199,088 | 10,283 | 5.2% |
| Provisions for risks, charges & severance | (17,364) | (18,289) | 925 | -5.1% |
| Deferred tax liabilities | (2,027) | (2,003) | (24) | 1.2% |
| Other non-current liabilities | (192) | (192) | 0 | 0.0% |
| Sub-total | (19,583) | (20,484) | 901 | -4.4% |
| Fixed Operating Capital | 189,788 | 178,604 | 11,184 | 6.3% |
| Total Uses | 163,820 | 156,164 | 7,656 | 4.9% |
| SOURCES | As at 31.12.2018 | at 31.12.2017 | Change in absolute value |
% Change |
|---|---|---|---|---|
| Net financial position | 6,416 | 11,056 | (4,640) | -42.0% |
| Share Capital | (90,314) | (90,314) | 0 | 0.0% |
| Reserves | (62,821) | (61,997) | (824) | 1.3% |
| Profit for the year | (17,101) | (14,909) | (2,192) | 14.7% |
| Group Shareholders' equity | (170,236) | (167,220) | (3,016) | 1.8% |
| Equity attributable to non-controlling interests | 0 | 0 | 0 | 0.0% |
| Total Shareholders' Equity | (170,236) | (167,220) | (3,016) | 1.8% |
| Total Sources | (163,820) | (156,164) | (7,656) | 4.9% |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 47
Reconciliation between shareholders' equity and the result for the year of the Parent Company and the Consolidated shareholders' equity and result is shown below:
| in thousands of Euro | Shareholders' Equity 31.12.2018 |
Net Result 31.12.2018 |
|---|---|---|
| Net equity and result of Aeroporto G. Marconi S.p.A. | 170,236 | 17,101 |
| Net equity and result of the consolidated company Tag Bologna s.r.l. | 1,939 | 259 |
| Net equity and result of the consolidated company Fast Freight Marconi S.p.A. | 4,684 | 567 |
| Aggregated net equity and result | 176,859 | 17,927 |
| Carrying value of consolidated companies | (3,193) | 0 |
| Elimination and write-down of investments in subsidiaries | 111 | 0 |
| Valuation effects of associated companies under the equity method | 0 | 0 |
| Alignment costs and revenues of the subsidiaries consolidated to costs and revenues of the Parent Company |
(1) | 0 |
| Elimination costs relating to the conferment capitalised to increase the investment in FFM | (66) | 0 |
| Consolidated net equity and result | 173,710 | 17,927 |
| Minority interest share of net equity and result | 0 | 0 |
| GROUP NET EQUITY AND RESULT | 173,710 | 17,927 |
| In thousands of Euro | Shareholders' Equity 31.12.2017 |
Net Result 31.12.2017 |
|---|---|---|
| Net equity and result of Aeroporto G. Marconi S.p.A. | 167,220 | 14,909 |
| Net equity and result of the consolidated company Tag Bologna s.r.l. | 1,676 | 439 |
| Net equity and result of the consolidated company Fast Freight Marconi S.p.A. | 4,112 | 836 |
| Aggregated net equity and result | 173,008 | 16,183 |
| Carrying value of consolidated companies | (729) | 0 |
| Elimination and write-down of investments in subsidiaries | 111 | 0 |
| Valuation effects of associated companies under the equity method | 0 | 0 |
| Alignment costs and revenues of the subsidiaries consolidated to costs and revenues of the Parent Company |
(2) | 0 |
| Elimination costs relating to the conferment capitalised to increase the investment in FFM | (66) | 0 |
| Consolidated net equity and result | 172,322 | 16,183 |
| Minority interest share of net equity and result | 821 | 214 |
| GROUP NET EQUITY AND RESULT | 171,501 | 15,969 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 48
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
shall prevail.
Reference should be made to the specific paragraph of the Notes to the consolidated financial statements at December 31, 2018 for information concerning transactions undertaken during the period with subsidiaries, associates and related parties.
In this Directors' Report, various performance indicators are presented in order to permit a better assessment of operating performance and financial position.
On December 3, 2015, Consob published Communication No. 92543/15, rendering applicable the Guidelines issued on October 5, 2015 by the European Security and Markets Authority (ESMA) regarding the presentation of such indicators in regulated information circulated or financial statements published on or after July 3, 2016. These Guidelines, updating the previous CESR Recommendation (CESR/05-178b), seek to promote the utility and transparency of alternative performance indicators included in regulated information or financial statements within the scope of application of Directive 2003/71/EC in order to improve their comparability, reliability and comprehensibility.
The criteria utilised for these indicators, in line with the above communications, are provided below:
The following table summarises the guarantees provided in the two years by the Group.
| in thousands of Euro | at 31/12/2018 | at 31/12/2017 | Change | % Change |
|---|---|---|---|---|
| Sureties | 6,498 | 9,348 | (2,850) | -30.5% |
| Pledge on Equity Financial Instruments | 10,873 | 10,873 | 0 | 0.0% |
| Patronage letters | 3,779 | 2,316 | 1,463 | 63.2% |
| Total guarantees provided | 21,149 | 22,537 | (1,387) | -6.2% |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 49
At December 31, 2018, the guarantees provided by the Group total Euro 21.1 million and principally concern:
sureties, mainly:
o to ENAC (the Italian Civil Aviation Authority) pursuant to the Full Management Agreement (Euro 4.4 million);
o to the Bologna Customs Agency for various custom deposits of the subsidiary Fast Freight Marconi Spa totalling Euro 1.03 million. For these latter there is a co-obligation of the Parent Company for a similar amount.
a pledge of the equity financial instrument issued by Marconi Express S.p.a. and subscribed for by the Parent Company for a nominal value of Euro 10.87 million, securing the obligations of Marconi Express to the credit institutions that financed the People Mover project. The Pledge on Equity Financial Instruments agreement was signed on September 30, 2016;
a letter of patronage concerning the mortgage loan granted to the subsidiary Tag Bologna S.r.l. by Banca Agricola Mantovana (now Monte dei Paschi di Siena), equal to the residual principal, which at the end of the period amounted to Euro 3.8 million.
In accordance with Article 2428, paragraphs 2, 3 and 4 of the Civil Code, it is communicated that Adb and the Group at December 31, 2018 hold treasury shares.
Based on the legally required communications, the Directors and Statutory Auditors of Aeroporto Guglielmo Marconi di Bologna Spa directly and/or indirectly holding shares at December 31, 2018 were:
No events have occurred subsequent to year end that would require changes in terms of the presented performance or equity and financial position and that would therefore necessitate adjustments and/or additional disclosures in the financial statements.
However, some significant events occurred after the end of the year or are set to occur in the coming months.
In February 2019, the airport registered an increase in passenger traffic of 8.5% compared to February 2018, with a total of 588,730 passengers.
In the first two months of 2019, Bologna airport passengers numbered 1,229,889, up 7.8%. Movements rose 8.3% (10,379)
With regards to the launch of new connections and the addition of flights:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 50
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The Chairman of the Board of Directors
(Enrico Postacchini)
Bologna, March 14, 2019
Aeroporto Guglielmo Marconi di Bologna S.p.A. 51
Statement of Consolidated Financial Position Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Cash Flow Statement Statement of Changes in Consolidated Shareholders' Equity
Aeroporto Guglielmo Marconi di Bologna S.p.A. 52
| in thousands of Euro | Note | As at 31.12.2018 |
As at 31.12.2017 |
|---|---|---|---|
| Concession Rights | 166,292 | 156,523 | |
| Other intangible assets | 2,059 | 1,784 | |
| Intangible assets | 1 | 168,351 | 158,307 |
| Land, property, plant and equipment | 15,135 | 14,670 | |
| Investment property | 4,732 | 4,732 | |
| Tangible assets | 2 | 19,867 | 19,402 |
| Investments | 3 | 43 | 43 |
| Other non-current financial assets | 4 | 16,205 | 19,827 |
| Deferred tax assets | 5 | 6,108 | 6,799 |
| Other non-current assets | 6 | 1,464 | 1,496 |
| Other non-current assets | 23,820 | 28,165 | |
| NON-CURRENT ASSETS | 212,038 | 205,874 | |
| Inventories | 7 | 594 | 538 |
| Trade receivables | 8 | 14,272 | 13,220 |
| Other current assets | 9 | 4,661 | 4,188 |
| Current financial assets | 10 | 13,449 | 20,617 |
| Cash and cash equivalents | 11 | 15,762 | 16,209 |
| CURRENT ASSETS | 48,738 | 54,772 | |
| Assets held-for-sale | 12 | 0 | 117 |
| TOTAL ASSETS | 260,776 | 260,763 |
| in thousands of Euro | Note | As at | As at |
|---|---|---|---|
| 31.12.2018 | 31.12.2017 | ||
| Share capital | 90,314 | 90,314 | |
| Reserves | 65,469 | 65,218 | |
| Profit (loss) for the year | 17,927 | 15,969 | |
| GROUP SHAREHOLDERS' EQUITY | 13 | 173,710 | 171,501 |
| MINORITY INTERESTS | 13 | 0 | 821 |
| TOTAL SHAREHOLDERS' EQUITY | 173,710 | 172,322 | |
| Severance and other personnel provisions | 14 | 4,205 | 4,405 |
| Deferred tax liabilities | 15 | 2,456 | 2,371 |
| Provisions for renewal of airport infrastructure | 16 | 10,332 | 9,575 |
| Provisions for risks and charges | 17 | 1,028 | 1,265 |
| Non-current financial liabilities | 18 | 14,690 | 19,109 |
| Other non-current liabilities | 168 | 169 | |
| NON-CURRENT LIABILITIES | 32,879 | 36,894 | |
| Trade payables | 19 | 19,011 | 16,208 |
| Other liabilities | 20 | 26,367 | 24,174 |
| Provision for renewal of airport infrastructure | 21 | 1,757 | 3,498 |
| Provisions for risks and charges | 22 | 526 | 0 |
| Current financial liabilities | 23 | 6,526 | 7,667 |
| CURRENT LIABILITIES | 54,187 | 51,547 | |
| TOTAL LIABILITIES | 87,066 | 88,441 | |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 260,776 | 260,763 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 53
| in thousands of Euro | Note | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
|---|---|---|---|
| Revenues from aeronautical services | 56,342 | 53,212 | |
| Revenues from non-aeronautical services | 41,160 | 38,222 | |
| Revenues from construction services | 15,650 | 6,735 | |
| Other operating revenues and income | 940 | 977 | |
| Revenues | 24 | 114,092 | 99,146 |
| Consumables and goods | (1,952) | (1,852) | |
| Service costs | (20,030) | (18,694) | |
| Construction service costs | (14,905) | (6,414) | |
| Leases, rentals and other costs | (8,123) | (7,668) | |
| Other operating expenses | (3,210) | (3,465) | |
| Personnel costs | (27,154) | (26,832) | |
| Costs | 25 | (75,374) | (64,925) |
| Amortisation of concession rights | (5,857) | (5,749) | |
| Amortisation of other intangible assets | (1,323) | (989) | |
| Depreciation of tangible assets | (2,219) | (2,085) | |
| Depreciation, amortisation and impairment | 26 | (9,399) | (8,823) |
| Provisions for doubtful accounts | (64) | 12 | |
| Provisions for renewal of airport infrastructure | (3,752) | (2,544) | |
| Provisions for other risks and charges | (291) | (240) | |
| Provisions for risks and charges | 27 | (4,107) | (2,772) |
| Total Costs | (88,880) | (76,520) | |
| Operating result | 25,212 | 22,626 | |
| Financial income | 28 | 384 | 274 |
| Financial expenses | 28 | (620) | (852) |
| Result before taxes | 24,976 | 22,048 | |
| Taxes for the year | 29 | (7,049) | (5,865) |
| Profit (loss) for the year | 17,927 | 16,183 | |
| Minority interest profit (loss) | 0 | 214 | |
| Group profit (loss) for the year | 17,927 | 15,969 | |
| Undiluted earnings/(loss) per share (in Euro) | 0.50 | 0.44 | |
| Diluted earnings/(loss) per share (in Euro) | 0.50 | 0.44 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 54
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
|---|---|---|
| Profit (loss) for the year (A) | 17,927 | 16,183 |
| Other profits (losses) that will be reclassified in the net result for the year | 0 | 0 |
| Total other profits (losses) that will be reclassified in the net result for the year (B1) | 0 | 0 |
| Other profits (losses) that will not be reclassified in the net result for the year | ||
| Actuarial profits (losses) on severance and other personnel provisions | 129 | 23 |
| Tax impact on actuarial profits (losses) on severance and other personnel provisions | (31) | (6) |
| Total other profits (losses) that will not be reclassified in the net result for the year (B2) | 98 | 17 |
| Total other profits (losses), net of taxes (B1 + B2) = B | 98 | 17 |
| Total profits (losses), net of taxes (A + B) | 18,026 | 16,200 |
| of which Minority Interests | 0 | 214 |
| of which Group | 18,026 | 15,986 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 55
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 |
|---|---|---|
| Core income-generating operations | ||
| Result for the year before taxes | 24,976 | 22,048 |
| Adjustments to items with no impact on cash and cash equivalents | ||
| - Margin from construction services | (745) | (321) |
| + Depreciation and amortisation | 9,399 | 8,823 |
| + Provisions | 4,107 | 3,089 |
| + Interest expense (income) for discounting and severance provisions | (105) | 159 |
| +/- Interest income and financial charges | 340 | 419 |
| +/- Losses/gains and other non-monetary costs/revenues | 2 | 29 |
| +/- Severance provisions and other personnel costs | 92 | 105 |
| Cash flow generated/(absorbed) by operating activities before changes in working capital | 38,066 | 34,351 |
| Change in inventories | (56) | (19) |
| (Increase)/decrease in trade receivables | (1,101) | 694 |
| (Increase)/decrease in other receivables and current/non-current assets (non-financial) | (461) | (893) |
| Increase/(decrease) in trade payables | 2,803 | 539 |
| Increase/(decrease) in other liabilities, various and financial | 2,384 | 745 |
| Interest paid | (535) | (702) |
| Interest collected | 218 | 451 |
| Taxes paid | (6,186) | (5,560) |
| Severance and other personnel provisions paid | (222) | (338) |
| Use of provisions | (4,568) | (3,993) |
| Cash flow generated / (absorbed) by net operating activities | 30,342 | 25,275 |
| Purchase tangible assets | (2,690) | (4,686) |
| Payment from sale of tangible assets | 6 | 31 |
| Purchase of intangible assets/concession rights | (16,892) | (8,072) |
| Proceeds on sale of intangible assets/concession rights | 389 | 0 |
| Purchase/capital increase of equity investments | (2,459) | 0 |
| Payment from sale of equity investments | 117 | 878 |
| Change in current and non-current financial assets | 10,723 | (1,500) |
| Cash flow generated / (absorbed) by investment activities | (10,806) | (13,349) |
| Proceeds from the issuance of shares and other equity instruments | 0 | 0 |
| Dividends paid | (14,161) | (10,007) |
| Loans received | 0 | 0 |
| Loans repaid | (5,822) | (5,820) |
| Cash flow generated / (absorbed) by financing activities | (19,983) | (15,827) |
| Final cash change | (447) | (3,901) |
| Cash and cash equivalents at beginning of year | 16,209 | 20,110 |
| Final cash change | (447) | (3,901) |
| Cash and cash equivalents at end of year | 15,762 | 16,209 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 56
| in thousands of Euro | Share capital |
Share Premium Reserve |
Legal Reserve | Other reserves |
FTA Reserve |
Actuarial profits/(losses) reserve |
Profit (losses) carried forward |
Assets held for-sale reserve |
Profit (loss) for the year |
Group shareholders' equity |
Minority interests |
Shareholders' Equity |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Shareholders' Equity as at 31.12.2016 | 90,314 | 25,683 | 5,018 | 34,923 | (3,222) | (933) | 2,413 | 0 | 11,311 | 165,507 | 607 | 166,114 |
| Allocation of the 2016 financial year result | 0 | 0 | 527 | 677 | 0 | 0 | 10,107 | 0 | (11,311) | 0 | 0 | 0 |
| Share capital increase | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Dividends paid | 0 | 0 | 0 | 0 | 0 | 0 | (10,007) | 0 | 0 | (10,007) | 0 | (10,007) |
| Assets held-for-sale | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 13 | 0 | 13 | 0 | 13 |
| Total comprehensive profit (loss) | 0 | 0 | 0 | 0 | 0 | 19 | 0 | 0 | 15,969 | 15,988 | 214 | 16,202 |
| Shareholders' Equity as at 31.12.2017 | 90,314 | 25,683 | 5,545 | 35,600 | (3,222) | (914) | 2,513 | 13 | 15,969 | 171,501 | 821 | 172,322 |
| Allocation of the 2017 financial year result | 0 | 0 | 759 | 837 | 0 | 0 | 14,373 | 0 | (15,969) | 0 | 0 | 0 |
| Share capital increase | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Consolidation 100% of Tag Srl | 0 | 0 | 6 | 0 | (50) | (5) | (1,593) | 0 | 0 | (1,642) | (821) | (2,463) |
| Dividends paid | 0 | 0 | 0 | 0 | 0 | 0 | (14,161) | 0 | 0 | (14,161) | 0 | (14,161) |
| Assets held-for-sale | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (13) | 0 | (13) | 0 | (13) |
| Total comprehensive profit (loss) | 0 | 0 | 0 | 0 | 0 | 98 | 0 | 0 | 17,927 | 18,026 | 0 | 18,026 |
| Shareholders' Equity as at 31.12.2018 | 90,314 | 25,683 | 6,310 | 36,437 | (3,272) | (821) | 1,132 | 0 | 17,927 | 173,710 | 0 | 173,710 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 58
The Group operates in the airport management business. In particular:
These consolidated financial statements concern the year ended December 31, 2018 and include the comparative figures for the year ended December, 2017 (hereafter "the Group consolidated financial statements" or "consolidated financial statements").
The consolidated financial statements were prepared under the historic cost convention, except for financial assets held-for-sale, and Intangible Assets comprising Energy Certificates, which were recognised at fair value, and in accordance with the going concern principle. The Group considers that, although enduring a difficult economic and financial environment, no significant uncertainties exist (as defined by paragraph 25 of IAS 1) on the going concern.
The consolidated financial statements are presented in thousands of Euro, which is also the Group functional currency, and all amounts are rounded to the nearest thousands of Euro, where not otherwise indicated.
The Group consolidated financial statements were prepared in compliance with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") endorsed by the European Union and in force at the preparation date of the financial statements, in addition to the provisions issued in enactment of Article 9 of Legislative Decree 38/2005 (Consob Motions No. 15519 and 15520 of July 27, 2006).
In 2014, the Group voluntarily opted to prepare the consolidated financial statements in accordance with International Accounting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") and prepared considering the transition date to IFRS (First Time Adoption "FTA") as January 1, 2012.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 59
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The publication of the consolidated financial statements of Aeroporto Guglielmo Marconi di Bologna S.p.A. and the two subsidiaries (the Group) for the year ended December 31, 2018 was approved by the Board of Directors on March 14, 2019.
The Group opted to apply the Separate and Consolidated Statement of Comprehensive Income, as permitted by IAS 1, considering such more representative of operations. In particular, the Statement of Consolidated Financial Position has been prepared by separating assets and liabilities into current and noncurrent categories.
An asset is considered current when:
All other assets are classified as non-current.
A liability is considered current when:
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified respectively under non-current assets and liabilities.
The Consolidated Income Statement has been prepared by classifying income and expenses by their nature, whereas the Consolidated Cash Flow Statement has been prepared using the indirect method, according to which cash flows are classified into operating, investing and financing categories.
The Consolidated Financial Statements include the Statement of Consolidated Financial Position, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated cash flow statement and the statement of changes in consolidated shareholders' equity.
The Group opted to prepare the statement of comprehensive income which includes, in addition to the result for the period, also the changes to equity relating to income items which, in accordance with International Accounting Standards, are recognised under equity.
The consolidated financial statements were prepared based on the financial statements of the company and its subsidiaries, directly and indirectly held, approved by the respective shareholders' meetings or executive bodies, appropriately adjusted in line with IFRS, with the exception of the financial statements of Tag Bologna Srl, approved by the Board of Directors of February 12, 2019 and whose Shareholders' Meetings is called for April 1, 2019. The subsidiary companies are fully consolidated from the date of acquisition, or from the date in which the Group acquires control, and ceases to be consolidated at the date on which the Group no longer has control.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 60
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
An entity may exercise control if it is exposed to or has the right to variable income streams, based on the relationship with the investee, and, at the same time, has the capacity to affect such income streams through the exercise of power over the investee.
Specifically, an entity is able to exercise control if, and only if, it has:
power over the investment entity (or holds valid rights which confer it the current capacity to control the significant activities of the investment entity);
exposure or rights to variable returns deriving from involvement with the investment entity;
the capacity to exercise its power on the investment entity to affect its income streams.
When a company of the Group holds less than the majority of the voting rights (or similar rights) of an investee, it should consider all the facts and significant circumstances to establish whether control of the investment entity exists, including:
The Group reconsiders if it has control of an investee and if the facts and circumstances indicate that there have been changes in one or more of the three significant elements for the definition of control. The consolidation of a subsidiary begins when the Group obtains control and ceases when the Group loses this control. The assets, liabilities, revenues and costs of the subsidiary acquired or sold during the year are included in the statement of comprehensive income from the date in which the Group obtains control until the date in which the Group no longer exercises control on the company.
The result for the period and each of the other comprehensive income statement items are allocated to the shareholders of the Parent Company and minority shareholders, even if this implies that the minority shareholder investments have a negative balance. Where necessary, appropriate adjustments are made to the financial statements of the subsidiaries, in line with the accounting policies of the Group. All assets and liabilities, shareholders' equity, revenues and costs, and inter-company cash flows relating to transactions between entities of the Group are completely eliminated on consolidation.
When the share in the equity held by the Parent Company changes, which does not result in a loss of control, this change must be recorded under equity. If the Group loses control, it must:
record the profit or loss in the income statement for the period;
reclassify the share of the Parent Company of any items previously recorded in the statement of comprehensive income to the income statement or profits/(losses) carried forward, as required by specific accounting standards, as if the Group had directly sold the related assets or liabilities.
The following table summarises the information on the subsidiaries at December 31, 2018 and 2017 in terms of the Group's direct and indirect holding.
| % Held | ||||
|---|---|---|---|---|
| in thousands of Euro | Currency | Share capital |
As at 31.12.2018 |
As at 31.12.2017 |
| Fast Freight Marconi S.p.a. Società Unipersonale | Euro | 520 | 100.00% | 100.00% |
| Tag Bologna S.r.l. Società Unipersonale | Euro | 316 | 100.00% | 51.00% |
On October 2, the Parent Company finalised the strategic acquisition of 49% of TAG Bologna S.r.l., which is now therefore wholly-owned.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 61
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The following table summarise the information on the associates at December 31, 2018 and 2017 in terms of the Group's direct and indirect holding.
| in thousands of Euro | Currency | Share capital |
As at 31.12.2018 |
As at 31.12.2017 |
|---|---|---|---|---|
| Ravenna Terminal Passeggeri S.r.l. | Euro | 165 | 24.00% | 24.00% |
The Share Capital of the associate Ravenna Terminal Passeggeri Srl was reduced for losses from Euro 300 thousand to Euro 165 thousand by the Shareholders' Meeting of April 4, 2017. This transaction has no impact on the consolidated financial statements of the AdB Group as the value of the investment was fully written down in previous financial years.
Business combinations are recognised using the purchase method. The purchase cost is calculated as the total of the fair value consideration transferred at the acquisition date, and the value of any minority equity holding. For every business combination, the Group decides whether to measure the minority interest at fair value or in proportion to the amount held in the identifiable net assets of the investee. The acquisition costs are expensed in the year and classified under administration expenses.
When the Group acquires a business, the financial assets acquired or liabilities assumed under the agreement are classified or designated in accordance with the contractual terms, the economic conditions and the other conditions at the acquisition date. This includes the verification to establish whether an embedded derivative must be separated from the host contract.
In the case of business combinations undertaken in a series of phases, the previous holding is remeasured at fair value at the acquisition date and any profit or loss is recorded to the income statement. It is therefore considered in the determination of goodwill.
Any potential payment to be recognised is recorded by the acquirer at fair value at the acquisition date. The change in the fair value of the potential payment classified as an asset or liability must be recorded in the income statement or in the statement of comprehensive income. Where the potential payment is not within the scope of IAS 39, the amount is measured in accordance with the appropriate IFRS. If the potential payment is classified in equity, the amount is not remeasured and its subsequent settlement is recorded in equity.
The goodwill is initially recorded at cost represented by the excess of the total consideration paid and the amount recognised for the minority interest holdings compared to the net identifiable assets acquired and liabilities assumed by the Group. If the fair value of the net assets acquired exceeds the total consideration paid, the Group again verifies if it has correctly identified all the assets acquired and all the liabilities assumed and reviews the procedure utilised to determine the amount to be recorded at the acquisition date. If from the new valuation the fair value of the net assets acquired is still above the consideration, the difference (profit) is recorded in the income statement.
After initial recognition, goodwill is measured at cost less any loss in value. For the purpose of impairment testing, goodwill acquired in a business combination is allocated, from the acquisition date, to each of the Group's cash-generating units expected to benefit from the synergies of the combination, regardless of whether other assets or liabilities of the acquiree are assigned to those units.
If goodwill has been allocated to a cash-generating unit and the entity disposes of an operation within that unit, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss of the disposal. The goodwill associated to assets sold is
Aeroporto Guglielmo Marconi di Bologna S.p.A. 62
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
calculated based on the relative values of the asset sold and the part maintained by the cash generating unit.
An associate is one in which the Group exercises significant influence and is not classifiable as a subsidiary or joint venture. Group investments in associates are measured under the equity method.
Under the equity method, the investment in an associate is initially recognised at cost and the carrying amount is increased or decreased to recognise the associate share of the profit or loss after the date of acquisition.
Goodwill pertaining to associates is included in the carrying value of the investment and is not subject to amortisation or an impairment test.
The income statement reflects the Group's share of the associate's result for the period. If an associate records adjustments with direct charges to shareholders' equity, the Group records its share and records such (where applicable) in the statement of changes in shareholders' equity. Profits and losses deriving from transactions between the Group and associates are eliminated in proportion to the investment held in the associate.
The Group share of the results of the associates is recognised in the income statement. The share of the result represents the result of the associate attributed to the shareholders; this refers therefore to the net result after taxes and the share attributable to the other shareholders of the associate.
The reporting date of the financial statements of the associate must coincide with the year-end of the Parent Company. The company's financial statements must be prepared using uniform accounting policies for like transactions and events in similar circumstances.
Subsequent to the application of the equity method, the Group assesses whether it is necessary to recognise a loss in value of investments in associates. The Group at each reporting date assesses whether an investment in an associate has incurred a loss in value. Where a loss arises, the Group calculates the amount of the loss as the difference between the recoverable value of the associate and the carrying value in the financial statements, recognising this difference in the income statement.
Once significant influence on the associate no longer exists, the Group values any residual investment at fair value. Any difference between the carrying value of the investment at the date significant influence no longer exists and the fair value of the residual investment and the amount received must be recorded in the income statement.
Foreign currency transactions are initially recorded in the functional currency, applying the exchange rate at the transaction date.
Monetary assets and liabilities in foreign currencies are translated to the functional currency at the exchange rate at the reporting date. The profits and losses deriving from the conversion are recorded in the income statement.
Non-monetary items, measured at historical cost in foreign currency, are translated using the exchange rates on the date the transaction was first recorded. The non-monetary accounts recorded at fair value in foreign currencies are converted using the exchange rate at the date the value was determined. The profit or loss deriving from the translation of non-monetary items is treated in line with the recognition of the profit or loss recorded on the change in the fair value of these items (i.e. the translation differences on the accounts to which the fair value changes is recorded in the statement of comprehensive income or in the income statement are recorded, respectively in the statement of comprehensive income or in the income statement).
Aeroporto Guglielmo Marconi di Bologna S.p.A. 63
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
An intangible asset is an asset without physical substance, identifiable, under control of the entity and capable of generating future economic benefits, and those derived from business combinations. The useful life of the intangible assets is measured as definite or indefinite.
Intangible assets with a definite useful life are recorded at acquisition or production cost or, where deriving from business combinations, are capitalised at the fair value at the acquisition date; these assets include accessory charges, amortised on a straight-line basis for the period of their residual useful life in accordance with IAS 36 and undergo an impairment test whenever there are indications of loss in value. The residual value at the end of the useful life is presumed to be zero unless there is a commitment by a third-party purchaser of the asset at the end of the useful life or an active market for the asset exists. The Directors review the estimate of the useful life of intangible assets at each reporting date. The amortisation of definite intangible assets is recorded in the income statement.
The Group has not identified intangible assets with indefinite useful lives.
"Concession rights" refer to the amount recognised under intangible assets against the airport infrastructure assets held in relation to the concession rights acquired for the management of the infrastructures which permits the right to charge for the utilisation of such infrastructure, in execution of a public service, in accordance with the provisions of IFRIC 12 – Service Concession Arrangements.
The Concession under which the Group operates meets the requirement that the concession holder must construct and operate the infrastructure on the grantor's behalf. Accordingly, the Group may not recognise it among tangible assets.
The Group contracts with third parties responsible for constructing and improving the infrastructure. Accordingly, the fair value of the fees for the construction/improvement services rendered by the Group is the fair value of the fees for the construction/improvement service rendered by third parties, plus a markup representative of the internal costs of planning and coordination of the work by a specific internal unit.
The external costs incurred to provide construction service are therefore recognised under the item "Construction service costs" of the income statement.
Together with these costs, the Group also recognises an increase in the item "Concession rights" equal to the fair value of the service rendered, with a balancing entry to the item "Revenues from construction services".
The resulting concession rights are amortised on a straight-line basis over the term of the concession, starting when the asset constructed on the grantor's behalf becomes operational.
The useful life of an intangible asset deriving from contractual rights or other legal rights is determined on the basis of the lower between the duration of the contractual or legal rights (concession duration) and the utilisation period of the asset. The recoverability of the carrying value less amortisation is verified annually adopting the impairment test criteria.
"Software, licences and similar rights" primarily refers to the costs of implementing and customising management software and of purchasing software licences, amortised at a rate of 33%.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 64
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
"Energy Certificates" refers to the White Certificates concerning the Trigeneration plant recognised to the Parent Company by the energy services operator (GSE). These certificates are measured at fair value represented by the average sales price of the last annual market session of energy efficiency securities.
The gains and losses deriving from the elimination of an intangible asset are measured as the difference between the net sales proceeds and the book value of the intangible asset, and are recorded in the income statement in the year in which they are eliminated.
Tangible assets are initially recognised at purchase price or construction cost and includes the price paid to acquire or construct the asset (net of discounts) and any directly attributable costs to the acquisition and necessary for the asset to enter into service.
Land, both constructible and relating to civil and industrial buildings, is accounted for separately and is not depreciated in that it has an indefinite useful life.
Tangible fixed assets are presented net of accumulated depreciation and any losses in value, calculated as described below. Depreciation is calculated, on a straight-line basis, based on the estimated useful life. Where a tangible fixed asset comprises a number of significant components with differing useful lives, the depreciation is carried out separately for each component. Land is not depreciated and fixed assets heldfor-sale are valued at the lower of the subscription value and the fair value net of selling costs.
The depreciation rates used are as follows:
The residual value of the asset, useful life and the methods applied are reviewed on an annual basis and adjusted if necessary at the end of each year.
Losses in value are charged to the income statement under depreciation costs. Such losses are restated when the reasons for their write-down no longer exist.
At the time of sale, or when there are no expected future economic benefits from the use of an asset, it is eliminated from the financial statements and any loss or profit (calculated as the difference between sale's price and book value) is charged to the income statement in the year of its elimination.
Maintenance and repair expenses, which do not increase the value and/or extend the residual useful life of the asset are expensed in the year in which they are incurred; where they increase the value and/or extend the residual life of the assets, they are capitalised.
The Group classifies land purchased for the execution of future real-estate investments to be defined as investment property.
Such land is initially recognised at purchase cost and then measured at cost.
The items of tangible assets in question are not subject to depreciation because they refer to land. The Group uses technical appraisals to monitor the fair value of the property in question in order to determine whether it has become impaired.
Investment properties are eliminated from the financial statement when they are sold or when they are unusable on a long-term basis and no future economic benefits are expected from their sale. Any profits or losses due to the retirement or disposal an investment property are recognised in the income statement when the property is retired or disposed of.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 65
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The definition of a contractual agreement as a leasing operation (or containing a leasing operation) is based on the substance of the agreement and requires an assessment of whether the agreement depends on the utilisation of one or more specific assets or whether the agreement transfers the right to the utilisation of this asset. The verification that an agreement contains a lease is carried out at the beginning of the agreement.
A leasing contract is classified as a finance lease or an operating lease at the beginning of the lease. A lease contract that substantially transfers all the risks and rewards of ownership of the asset leased, is classified as a finance lease.
An operating lease is a leasing contract which does not qualify as a finance lease. The Group as leasee records operating leases in the income statement on a straight-line basis over the duration of the contract. The Group recognises leasing agreements in which it is the lessor as operating leases when it retains essentially all the risks and benefits of ownership of the asset. The initial negotiating costs are added to the carrying amount of the leased asset and recognised over the duration of the contract, on the same basis as lease income. Rent not estimated in advance is recognised as revenue in the period in which it matures.
The carrying amount of non-financial assets undergo an impairment test whenever there are signs internal or external to the entity which indicate the possibility of a loss in value of the assets or group of assets (defined as the Cash Generating Unit or CGU).
The recoverable value is the higher between the fair value of the asset or cash generating unit, net of selling costs, and its value in use. The recoverable value is determined by individual asset except when this asset generates cash flows which are not sufficiently independent from those generated by other assets or groups of assets.
If the carrying amount of an asset is higher than its recoverable value, this asset has incurred a loss in value and is consequently written down to the recoverable value. In the determination of the value in use, the estimated future cash flows are discounted by the Group at a pre-tax rate that reflects the market assessment of the current value of money and the risks specific to the asset. In determining the fair value less selling costs, an adequate valuation model is utilised. These calculations are made utilising appropriate valuation multipliers, listed equity prices for publicly traded securities and other fair value indicators available.
The losses in value incurred by operating assets are recorded in the income statement in the category of costs relating to those assets.
At each reporting date, the Group evaluates, in relation to the assets other than goodwill, the existence of indicators of a reduction in the loss of value previously recorded and, where these indicators exist, makes an estimate of the recoverable value. The value of an asset previously written down may be restated only if there have been changes in the estimates used to determine the recoverable value of the asset after the last recording of a loss in value. The recovery of value cannot exceed the book value which would have been calculated, net of amortisation, where no such loss in value was recorded in previous years. This recovery is recorded in the income statement unless the fixed asset is recorded at revalued amount, in which case the recovery is treated as a revaluation profit.
The following criteria are utilised for the recording of impairments on specific categories of assets:
The Group undertakes an impairment test on Concession rights annually at the year-end close or more frequently if events or changes in circumstances indicate that the carrying amount may have incurred a loss in value (whenever impairment indicators arise).
Aeroporto Guglielmo Marconi di Bologna S.p.A. 66
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The loss in value on such intangible assets is determined through a valuation of the recoverable value of the cash generating unit (or group of units) to which they relate. When the recoverable value of the cash generating unit (or group of units) is lower than the carrying value of the cash generating unit (or group of cash-generating units) to which the intangible assets are allocated, a loss in value is recognised.
For impairment testing purposes, the Group has identified a single CGU (cash generating unit), which coincides with the Aeroporto G. Marconi di Bologna S.p.A. Group.
The impairment test compares the carrying amount of the asset or of the cash generating unit (CGU) with the recoverable value of the asset, arising from the higher between the fair value (net of selling costs) and the value of the net discounted cash flows which are expected to arise from the asset or from the CGU.
Each unit or Group of units to which the intangible asset is allocated represents the lowest level within the Group to which the goodwill is monitored at internal management level.
The conditions and the methods for any write-back of an asset previously written down applied by the Group, excluding in any case any recovery in the value of goodwill, are those as per IAS 36.
IFRS 9 provides for a single approach for the analysis and classification of all financial assets, including those contained in embedded derivatives. The classification and the relative measurement is made considering both the management model of the financial assets and the contractual characteristics of the cash flows from the asset.
The financial asset is measured using the amortised cost method where both of the following conditions are satisfied:
The financial asset is measured at fair value, with recognition of the effects in the statement of comprehensive income, if the objectives of the management model are to hold the financial asset in order to obtain the contractual cash flows or to sell the asset.
Finally, there is the residual category of financial assets measured at fair value with recognition of the effects through the income statement, which includes assets held for trading.
A financial asset which satisfies the requirements to be classified and measured at amortised cost may, on initial recognition, be designated as a financial asset at fair value, with recognition through the income statement, if this accounting treatment permits the elimination or significant reduction of the asymmetry in the measurement or recognition (so-called "accounting mismatch"), which would otherwise arise from the measurement of the asset or liability or from the recognition of the relative profits or losses on a different basis.
In addition, in the case of investments in equity instruments for which, therefore, it is not possible the recognition and measurement at amortised cost, where this concerns equity investments not held for trading purposes, but for strategic purposes, IFRS 9 provides that on initial recognition the entity may irrevocably choose to measure these at fair value, with recognition of any subsequent changes in the statement of comprehensive income without passing through profit or loss any gains or losses in the case of disposal.
Where the financial assets are only held for the Group's temporary needs to invest liquidity in order to obtain the contractual cash flows these are classified in the category "Held to collect - HTC".
Aeroporto Guglielmo Marconi di Bologna S.p.A. 67
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
Where the financial assets meet the Group's objective either to collect the contractual cash flows or the future sale these are classified in the category "Held to collect and sell – HTC&S". The Group does not hold and did not hold during 2018 derivative financial instruments.
Loans, similar to trade receivables, are held until their collection at the contractual maturities and generate cash flows relating to the collection of the principal and interest. The Group analysed the contractual cash flows of these instruments and concluded that they comply with the amortised cost measurement criteria in accordance with IFRS 9.
The amortised cost is calculated taking into consideration all discounts or purchase premiums and includes the commissions which are an integral part of the effective interest rate and of the transaction costs. Current trade receivables are not discounted as the effect of discounting the cash flows is immaterial. The profits and losses are recognised to the income statement when the loans and receivables are eliminated or if there is an impairment, also through the amortisation process.
In the notes, the Group discloses the fair value of financial instruments at amortised cost and non-financial assets, such as investment property.
Fair value concerns the price that will be received for the sale of an asset or which will be paid for the transfer of a liability, in a transaction settled between market operators at the measurement date.
Fair value measurement requires that the sale of the asset or transfer of the liability has taken place:
The principal market or the most advantageous market must be accessible for the Group.
The fair value of an asset or liability is measured adopting the assumptions which market operators would utilise in the determination of the price of the asset or liability, assuming they act to best satisfy their economic interests.
The fair value measurement of a non-financial asset considers the capacity of a market operator to generate economic benefits utilising the asset to its maximum and best use or of selling to another market operator that would utilise the asset to its maximum or best use.
The Group utilises measurement techniques which are appropriate to the circumstances and for which there is sufficient available data to measure the fair value, maximising the utilisation of relevant observable inputs and minimising the use of non-observable inputs.
All the assets and liabilities for which the fair value is measured or stated in the financial statements are categorised based on the fair value hierarchy, as described below:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 68
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The fair value measurement is classified entirely in the same hierarchical level of the fair value in which the lowest hierarchical input level utilised for the measurement is classified.
For the assets and liabilities recognised in the financial statements on a recurring basis, the Group assesses whether there have been transfers between the hierarchy levels, reviewing the classification (based on the lowest input level, which is significant for the fair value measurement in its entirety) at each reporting date.
IFRS 9 defines a new impairment model of financial assets, with the objective to provide useful information to the readers of the financial statements in relation to expected losses. In particular, the model requires verification and recognition of any expected losses at any time over the life of the instrument and the updating of the expected losses at each reporting date to reflect the changes in the credit risk of the instrument; therefore, it is no longer necessary that a particular event arises ("trigger event") in order to verify and recognise losses on receivables.
The impairment test must be applied to all financial instruments, with the exception of those measured at fair value with recognition through the income statement.
The Group applies the simplified Provision Matrix approach and recognises the expected losses on all trade receivables based on the residual duration, defining a matrix for the provision based on the historical experience relating to the losses on receivables, adjusted to take into account specific forecast factors relating to the creditors and the economic environment (Expected Credit Loss – ECL concept).
The book value of the asset is reduced through the use of a provision and the amount of the loss recognised in the income statement.
Receivables which have incurred a loss in value are reversed when it is determined that they are irrecoverable.
Non-current assets classified as held-for-sale are measured at the lower of their carrying value and the fair value less selling costs. They are classified as such if the carrying value will be recovered through a sales operation rather than through their continual use. This condition exists only when the sale is highly probable and the asset or discontinued group is available for an immediate sale in its current conditions. Management must be committed to the sale, whose completion must be expected within one year from the date of the classification.
In the consolidated income statement and the previous year comparative period, the profits and losses of discontinued operations must be classified separately from profits and losses from continuing operations, shown after taxes, even when the Group maintains a minority interest in the subsidiary after the sale. The resulting profit or loss, after taxes for the period, is shown separately in the income statement.
Plant, property and equipment and intangible assets once classified as held-for-sale are no longer amortised or depreciated.
Financial assets (or, where applicable, part of a financial asset or part of a group of similar financial assets) are derecognised firstly (e.g. eliminated from the statement of financial position) when:
• the rights to receive cash flows from the asset are extinguished, or
Aeroporto Guglielmo Marconi di Bologna S.p.A. 69
• the Group has transferred to a third party the right to receive the cash flows of the asset or has assumed the contractual obligation to pay entirely and without delay and (a) has substantially transferred all of the risks and rewards of ownership of the financial asset, or (b) has not substantially transferred all of the risks and rewards of the asset, but has transferred control.
Construction contracts work-in-progress are measured on the basis of the contractual payments matured with reasonable certainty in relation to the advancement of work under the percentage of completion method, determined through the measurement of work completed, to be attributed to the revenues and economic result of the contract to each year in proportion to the advancement of work. The positive or negative difference between the value of the completed portion of the contracts and that of the advances received is recognised in the statement of financial position, as an asset or liability, respectively, while also taking account of any impairment losses recognised due to risks associated with non-payment for work done on behalf of clients.
The contract revenues, in addition to the contractual payments, include the variances, price revisions and any claims up to the amount it is probable that they represent effective revenues that can be determined reliably.
If a project is expected to yield a loss, this loss is immediately recognised in full, regardless of the progress on the project.
Construction services for the grantor relating to the concession agreement to which AdB is a party are also recognised in the income statement according to the state of progress. In particular, construction and/or improvement revenue – which represents the consideration due for the services rendered – is measured at fair value, determined on the basis of the total costs incurred, consisting primarily of the costs of external services and the costs of benefits for employees engaged in the activities concerned.
The balancing entry for such construction service revenue is to a financial asset or airport concession taken to concession rights among intangible assets, as discussed in the relevant section.
Inventories are recorded at the lower of purchase or production cost and realisable value represented by the amount that the company expects to obtain from their sale in the normal course of operations. The cost of inventories is calculated using the weighted average cost method.
Cash and cash equivalents include those values which are available on demand at short notice, certain in nature and with no payment expenses.
The benefits guaranteed to employees paid on the conclusion of employment (leaving indemnity) or other long-term benefits (e. g. non-competitive agreements, long-term incentive plans) are recognised in the period the right matures.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 70
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The liability, net of any plan assets, is calculated on the basis of actuarial assumptions and is recorded by the accrual method consistent with the years of employment necessary to obtain such benefits. The liability is calculated by independent actuaries utilising the projected unit credit method.
The amount not only reflects the payables matured at the Consolidated Financial Statements date but also the future salary increases and related statistical data.
Revaluations, which include actuarial profits and losses, changes in the effect of the limit on the assets, not including net interest (not applicable to the Group) and the return on plan assets (not including net interest) are recognised immediately in the statement of financial position by debiting or crediting profits/(losses) carried forward through other comprehensive income in the year in which they occur. Revaluations are not reclassified to the income statement in subsequent years.
The cost of employee service in prior periods is recognised in the income statement on the later of the following dates:
Net interest on the net defined-benefit liabilities/assets are calculated by multiplying the net asset/liability by the discount rate. The Group recognises the following changes in the net defined-benefit obligation in the cost of goods sold, administrative expenses and selling and distribution costs in the consolidated income statement (by nature):
Following the amendments to severance benefits introduced by Law No. 296 of December 27, 2006 (Finance Law 2007) and subsequent Decrees and Regulations, the severance benefits of Italian companies with more than 50 employees matured from January 1, 2007, or from the option date chosen by the employee, is included under defined contribution plans, both in the case of supplementary pension options and in the case of allocation to the INPS Treasury Fund. The severance benefits accrued until December 31, 2006 have been treated as defined-benefit.
The contributions to be paid into a defined-contribution plan in exchange for the employee service in question are treated both as a liability (account payable) after having deducted any contributions already paid, and as a cost.
Provisions for risks and charges relate to costs and expenses of a defined nature and of certain or probable existence
whose amount or date of occurrence is uncertain at the present Consolidated Financial Statements date.
The provisions are recorded when:
Provisions are recorded at the value representing the best estimate, supported by expert opinion, of the amount that the Company would rationally pay to discharge the obligation or to transfer it to a third party at the reporting date.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
When the financial effect of the time is significant and the payment dates of the obligations can be reliably estimated, the provision shall be discounted at the average cost of debt to the company; the increase of the provision due to the passing of time is recorded in the income statement in the account "Net financial income/(charges)".
If the liability relates to a tangible fixed asset (demolition of assets), the provision is recognised in line with the asset to which it refers; the recognising of the charge to the income statement is made through depreciation.
The provisions are periodically updated to reflect the changes in the estimate of the costs, of the time period and of the discounting rate; the revision of estimates is recorded in the same income statement accounts in which the provision was recorded, when the liability relates to tangible fixed assets, and in the asset account to which it refers.
In accordance with the obligations assumed under current agreements, the provision for renewal of airport infrastructure includes accruals relating to extraordinary maintenance, refurbishment and replacement to be undertaken at a future point in time to ensure that airport infrastructure remains duly functional and secure. Accruals to this provision are recognised according to the degree of use of the infrastructure, indirectly reflected in the expected date of replacement/renewal. The values recorded in this line item also take due account of a financial component, to be applied according to the intervals between the various renewal cycles, intended to ensure that the provisions set aside are adequate. The estimate of the provision for renewal of airport infrastructure therefore requires complex professional technical judgement, in particular in relation to the nature of the costs to be incurred, their amount and the timing of the expected interventions.
Short-term trade payables, which mature within the normal commercial terms, are recognised at cost (their nominal value) and are not discounted as the discounting of cash flows is insignificant.
The other non-financial liabilities are recorded at cost (identified as nominal value).
Other financial liabilities, with the exception of the derivatives, are recognised initially at cost, corresponding to the fair value of the liability plus transaction costs that are directly attributable at the issue of the liability.
After initial recognition, the financial liabilities are measured at amortised cost using the original effective interest rate, which is the rate that renders equal, on the initial recognition, the present cash flow value and the initial recognition value (amortised cost method).
All profits and losses are recognised in the income statement when the liability is settled, in addition to the amortisation process.
Financial guarantee liabilities issued by the Group are contracts which require a specific payment to reimburse the holder of a debt security against a loss incurred following non-compliance of the debtor in the payment at the scheduled contractual maturity date. Financial guarantee contracts are initially recognised as a liability at fair value, increased by the directly attributable transaction costs to the issue of the guarantee. After initial recognition, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised, less accumulated amortisation.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 72
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
A financial liability is derecognised when the underlying obligation of the liability is extinguished, settled or cancelled. If an existing financial liability is replaced by another by the same lender but under substantially different conditions, or if the conditions of an existing financial liability are substantially changed, such a swap or change is treated as an elimination of the original liability and the opening of a new liability, with any differences in accounting values recorded in the separate income statement.
Revenues are recognised for an amount which reflects the payment which the entity considers to have the right to in exchange for the transfer of goods or services to the customer. These are recognised when the contractual obligations have been complied with and in particular when control has been transferred to the customer. In addition, in the measurement of revenue it is necessary to take into account the probability of obtaining and/or collecting the economic benefit related to the income. Revenues are recorded net of returns, discounts and premiums and promotional charges directly related to the sales revenue, in addition to direct sales taxes. Commercial discounts, recorded as a direct deduction of revenues, are measured on the basis of contracts signed with airlines and tour operators. Royalties are recorded based on the accruals principle in accordance with the contracts in force and as per IFRS 15.
Interest income is recognised in accordance with the accruals principle, which takes into account the effective yield of the assets to which it refers.
Dividends are recorded when the shareholders have the right to receive them.
Costs are recorded when relating to goods and services sold or consumed in the year or when there is no future utility.
Interest expense is recognised in accordance with the accruals principle, which takes into account the effective yield of the liabilities to which it refers. Borrowing costs that are directly attributable to the acquisition, construction or production of an asset which requires a lengthy period before availability for use shall be capitalised as part of the cost of that asset.
Current income taxes are valued at the amount expected to be recovered or paid to the tax authorities. The tax rates and regulations used to calculate such amounts are those issued or substantially issued as at the reporting date of the consolidated financial statements. Current income taxes relating to items recorded directly in equity are charged directly to shareholders' equity and not to the income statement. The Directors periodically assess the positions assumed in the income tax returns where the fiscal regulations are subject to interpretations and, where appropriate, record appropriate provisions.
Deferred taxes are calculated using the liability method on temporary differences between values used for fiscal purposes and the assets and liabilities reported in the present consolidated financial statements. The deferred tax liabilities are recorded against all temporary taxable differences, with the exception of:
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
Deferred tax assets are recognised on all temporary differences and fiscal losses carried forward to the extent of the probable existence of adequate future tax profits that can justify the use of deductible temporary differences and fiscal loses carried forwards, except:
The carrying value of deferred tax assets is reviewed at each reporting date and reduced to the extent it is unlikely that sufficient tax profits will be available in the future, so that some or all of the asset may be used. Unrecognised deferred tax assets are reviewed at each reporting date and are recognised to the extent of the probability that the tax profit is sufficient to permit such deferred tax assets to be recovered.
Deferred tax assets and liabilities are calculated on the basis of the tax rates expected to be applied in the year in which the assets are realised or the amounts are paid, considering the rates in effect and those already issued or substantially issued as of the closing date of the financial statements.
Deferred taxes concerning items recognised outside of the income statement are also recognised outside of the income statement and therefore to equity or to the statement of comprehensive income, in line with the item to which they refer.
The Group offsets deferred tax assets and deferred tax liabilities when there is a legal right to offset current tax assets and current tax liabilities and the deferred tax assets and liabilities relate to income taxes due to the same tax authority.
The fiscal benefits acquired following a business combination, but which do not satisfy the criteria for separate recognition at the acquisition date, may be recognised subsequently, when updated information is received on the facts and on the circumstances. The adjustment is recognised as a reduction of goodwill (up to the value of the goodwill), where this is recorded during the measurement period, or in the income statement, if recorded subsequently.
The rates utilised for the calculation of deferred taxes, which reflect the expected rates on the basis of national legislation in force, are the following:
Costs, revenues, assets and liabilities are recognized net of indirect taxes, such as value added tax, with the following exceptions:
The net amount of the indirect taxes to be recovered or be paid to the Tax Authorities is included in the financial statements under receivables or payables.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 74
The earnings/(loss) per share is calculated by dividing the result of the Group by the weighted average number of ordinary shares outstanding during the year, excluding any treasury shares. Diluted
The diluted earnings/(loss) per share is calculated by dividing the result of the Group by the weighted average number of ordinary shares outstanding during the year, excluding any treasury shares. In order to calculate the diluted earnings per share, the average weighted number of shares outstanding is adjusted in respect of the dilution potential of ordinary shares, while the profit or loss of the Group is adjusted to take into account the effects, net of income taxes, of the conversion.
The Group records a liability against the distribution to its shareholders of available liquidity or assets other than available liquidity when the distribution is appropriately authorised and is no longer at the discretion of the company. Based on company law in Europe, a distribution is authorised when it is approved by the shareholders. The corresponding amount is recorded directly in shareholders' equity.
The distribution of assets other than available liquidity is measured at fair value of the assets to be distributed; the remeasurement of the fair value is recorded directly in shareholders' equity.
On the payment of the dividend, any difference between the book value of the assets distributed and the book value of the dividend payable is recorded in the statement of comprehensive income.
Within the listing project concluded on July 14, 2015 with the commencement of trading of the shares on the Star Segment of the Electronic Equities Market (Mercato Telematico Azionario) organised and managed by Borsa Italiana Spa, the Parent Company incurred specific costs, such as (i) commissions recognised to the coordinating banks of the offer, (ii) fees paid to consultants, specialists and legal advisors, (iii) other costs such communication costs, prospectus printing costs and other miscellaneous expenses and charges.
In a listing operation, where the Issuer issues new shares and lists both the new and existing shares, some costs are incurred jointly for the share capital increase and the sale of the new shares, and for the sale of existing shares. In this situation, the criteria for their allocation to the two activities must be identified based on reasonable criteria which reflects the substance of IAS 32, recognising them in part as a decrease of Shareholders' Equity and in part in the Income Statement.
The listing costs which are incremental in nature directly attributable to the share capital increase which would otherwise be avoided, such as for example purposes the intermediary fees, were recorded in 2015 as a decrease in the Shareholders' Equity in the Share Premium Reserve; the remainder, again for example purposes, such as the costs relating to consultants, specialists and legal advisors, was recorded in part in the Income Statement and in part under Shareholders' Equity in accordance with the criterion illustrated above.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 75
The Company prepared the cash flow statement in accordance with the indirect method as permitted by IAS 7. The Company reconciled the pre-tax profit with the net cash flows from operating activities. IAS 7, paragraph 33 allows classification of interest income and expense as an operating activity or financial activity based on the presentation considered most representative by the entity; the Company classifies interest income received and interest expense paid as cash flows from operating activities.
From 2018 the following new accounting standards, amendments and interpretations, revised by the IASB, entered into force:
The Group has concluded its analysis, which commenced in 2016, of the impact from the application of the new standard IFRS 9 financial instruments on the financial position, operating results and cash flow of the Group.
On July 24, 2014, the IASB issued the definitive version of IFRS 9 replacing IAS 39. The principal amendments to the standard concerns a new model of "classification and measurement", impairment, hedge accounting and own liabilities. With the exception of the hedge accounting, retrospective application is required of the standard, but it is not obligatory to disclose comparative information. In relation to the hedge accounting, the standard is generally applied prospectively, with some limited exceptions. IFRS 9 entered into force from January 1, 2018 and the Group has applied the new standard from the date of obligatory application.
The standard introduces the need to undertake a business model analysis to define the classification of the financial instruments. The business model of a company reflects how financial instruments are managed in order to generate cash flows; its business model indicates if the cash flows are due to contractual cash flows, to sales or both. This assessment is made on the basis of expected future scenarios.
From evaluations undertaken it emerged that the principal impacts relate to the classification model of the financial assets and liabilities which up to December 31, 2017 were classified in the category "AFS" as this category is no longer included under IFRS 9 and the adoption of the impairment model of predictive financial assets which did not result in any impact on shareholders' equity and on the 2017 result.
As already illustrated in the 2017 Annual Report, the Group does not have any significant financial position effects following the adoption of the new rules within the standard, including the new hedge accounting model. Given the insignificance of the IFRS 9 effects the Group did not restate the comparative figures.
For further information, reference should be made to Note 4 and Note 10.
IFRS 15 was issued in May 2014 and introduces a new model in five steps applied to revenues from contracts with customers from January 1, 2018. Based on IFRS 15, in fact, it is necessary to analyse the contracts and the relative accounting effects through the following five steps:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 76
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
IFRS 15 provides for the recognition of revenues for an amount which reflects the payment which the Group considers to have the right to in exchange for the transfer of goods or services to the customer. The new standard replaces IAS 11, IAS 18 and the relative interpretations and is applied to all revenues from contracts with customers, unless these contracts are within the scope of other standards. The Group applies the new standard from the obligatory application date, adopting the modified retrospective method.
Within the assessment process of the accounting effects deriving from the adoption of the new standard concluded by the Group and initiated during 2016 and 2017, through the analysis undertaken on both Aeroporto Guglielmo Marconi di Bologna S.p.A. and the other subsidiaries of the Group, the following revenue streams were identified:
In summary there were no effects identified deriving from the adoption of IFRS 15 on the statement of financial position, income statement and financial position of the Group, with the exception of the reclassification of "one-off" promotional incentives, such as incentives for the start-up of new flights, up to December 31, 2017 recorded under costs for services provided to carriers and classified from January 1, 2018 as a direct reduction of airport fee revenues, as already applied for the variable incentives recognised based on traffic. Relating to the year 2018, this concerns Euro 83 thousand compared to Euro 142 thousand in the previous year. This reclassification did not however have any impact on shareholders' equity and on the 2017 Group profit.
For further information reference should be made to Note 24.
On June 21, 2016, the IASB published the amendments to the standard, with the aim of clarifying how to account for certain types of share-based payment transactions. The amendments concern: (i) the effects of "vesting conditions" and "non-vesting conditions" with regard to the valuation of cash-settled share-based payments; (ii) share-based payment transactions with a net settlement function for withholding tax obligations (iii) an amendment to the terms and conditions of a share-based payment that changes the transaction's classification from cash-settled to equity-settled. The amendments are applicable from January 1, 2018; although early application is permitted, the Group adopted these amendments prospectively from January 1, 2018 and no effects arose in the consolidated annual financial statements or on the disclosures following the adoption of these amendments.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 77
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The series of improvements, issued in December 2016, concerned the elimination of short-term exemptions provided for First Time Adoption by IFRS 1, the classification and measurement of equity investments valued at fair value and recognised in the income statement in accordance with IAS 28 - Investments in Associates and Joint Ventures, and clarification on the scope of disclosures required by IFRS 12 – Disclosure of Interests in Other Entities. The application of the amendments are obligatory for financial years ending after January 1, 2017 and January 1, 2018. The Group adopted these improvements from the obligatory effective date and no effects arose on the consolidated half-year financial statements or on the disclosures in the notes.
On December 8, 2016, IASB published this interpretation which concerns foreign currency transactions paid or received in advance. These amendments were adopted by the Group at the obligatory effective date (January 1, 2018) and had no impact on the consolidated annual financial statements and on the disclosures in the notes.
The amendments clarify when an entity should transfer a property, including property under construction or development, into or out of the category "Investment property". It clarifies that a change in the intended use does not occur due to a simple change in management's intentions. The introduction of these amendments had no impact on the consolidated annual financial statements of the Group.
Excluded from the list are the amendments to IFRS 4 - Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts as they do not concern the activities undertaken by the Group.
IFRS 16 was published in January 2016 and replaces IAS 17 Leasing, IFRIC 4 Determining whether an arrangement contains a lease, SIC 15 Operating leases - Incentives and SIC 27 Evaluating the substance of transactions in the legal form of a lease.
The scope of application of the new standard, which enters into force from January 1, 2019, concerns all leasing contracts, with some exceptions. The accounting method of all leasing reassumes the model under IAS 17, although excluding leasing for insignificant amounts and short-term lease contracts. At the recognition date of the lease it is necessary to recognise the liability for the lease instalments and the asset for which the entity has the right of utilisation, separately recognising the financial expenses and depreciation relating to the asset. The liability may be remeasured (for example changes in the contractual terms or changes in indices related to the payment of the instalments) and this change must be recorded on the underlying asset. From the lessor's viewpoint the accounting model is substantially unchanged from the current IAS 17.
As illustrated in the paragraph relating to IFRS 15, the AdB Group has underwritten leasing contracts as lessor with the sub-license of airport areas and spaces to its customers and also has undertaken leasing contracts as lessee for equipment, plant, machinery, automotive vehicles and land; reference should be made to the paragraph on Commitments and risks for the amount of the minimum lease payables and receivables which the Group has contractually undertaken for the coming years.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 78
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The implementation process for the Standard, involving set-up of the IT infrastructure for the accounting management and the alignment of the administrative and control processes applicable to the critical areas governed by the Standard, is in the process of being completed.
The Group has elected to apply the standard retrospectively from January 1, 2019 (modified retrospective method). From the lessor's viewpoint, there are no changes in the new standard compared to the current accounting method. From a lessee viewpoint, the Group expects an increase in EBITDA for the reclassification of leasing expenses for hire and rental to the accounts depreciation and financial expenses and a decrease in the Net Financial Position for the recording of the lease payables under trade payables. From the analysis undertaken to-date, the estimate of the impact is as follows:
| Usage right capitalised in assets |
€ 2.077K | ||||
|---|---|---|---|---|---|
| Initial recognition and valuation in balance sheet |
Financial liabilities recognised to liabilities |
$-62.077K$ | |||
| Valuation equal to present value of future charges | |||||
| Hire charges | $-6557K$ | ||||
| To income statement | Amortisation usage right | € 544K | |||
| Interests on leasing | € 46K |
In thousands of Euro
In addition, reference should be made to Note 31 for disclosures on minimum leasing payments required by IAS 17.
(applicable from financial years ending after January 1, 2019).
This allows companies to measure specific prepayments on financial assets through the so-called negative compensation at amortised cost or at fair value from "other comprehensive income" in the case where a specific condition is met, rather than at the fair value of the income statement. The impacts of these amendments on the consolidated financial statements are currently under evaluation.
At the date of authorisation of these consolidated financial statements, the competent bodies of the European Union have not yet completed the endorsement process relating to the new standards and amendments applicable to the financial statements for years that commence from January 1, 2019 and illustrated below:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 79
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
(applicable from financial years ending after January 1, 2019).
The interpretation clarifies the applications of the requirements for recognition and measurement in IAS 12 - "Income taxes" in the case of uncertainty on the treatment of income taxes. The Interpretation concerns specifically: (i) the case in which an entity considers separately the uncertain fiscal treatment, (ii) the assumptions which an entity makes on the review of the fiscal treatment by the tax authorities, (iii) how an entity determines assessable income (or fiscal loss), assessable base, fiscal losses not utilised, tax credits not uitlised and tax rates and (iv) in what manner an entity considers changes of facts and circumstances. The Interpretation does not add new disclosure requirements, however outlines the existing requirements in IAS 1 relating to disclosure on opinions, information on assumptions of facts and other estimates and information on tax under/over accruals within AS 12 "Income taxes". The interpretation provides a choice between two transition models: (i) retroactive application which utilises IAS 8 - "Accounting policies, changes in accounting estimates and errors", only if the application is possible, or (ii) retroactive application with cumulative effect of the initial application recorded as an adjustment to shareholders' equity at the date of the initial application and without remeasurement of the comparative information. The date of the initial application is the beginning of the annual reference period in which an entity applies the interpretation for the first time. No significant effect is expected on the Group consolidated financial statements from the application of the new standard.
This clarifies how the entity should use IFRS 9 to represent long-term interests in an associate company or joint venture, for which the equity method is not applied. No significant effect is expected on the Group consolidated financial statements from the application of the new standard.
In December 2017, the IASB also issued Annual Improvements to IFRS 2015-2017, a series of amendments to IFRS in response to issues raised, mainly: (I) to IFRS 3 - Business Combinations, clarifying how a company must re-measure holdings, previously held in a joint operation, once control of the business is obtained; (II) to IFRS 11 – Joint Arrangements, for which a company does not re-value holdings previously held in a joint operation when it obtains joint control of the activity, (III) to IAS 12 - Income Tax, which clarifies that the impact on income tax deriving from dividends (that is, the distribution of profits) should be recognised in the income statement, regardless of how the tax arises; (IV) and to IAS 23 – Borrowing costs, which clarifies that a company is to treat as part of a general debt any debt originally assumed for the development of an asset when this asset is ready for its intended use or for sale. The changes will be effective from January 1, 2019 and significant effects are not expected on the Group consolidated financial statements.
In February 2018, the IASB issued amendments to IAS 19 which specifies how companies should determine the pension payable when changes to a given pension plan occur. IAS 19 "Employee Benefits" specifies how a company should account for a defined benefit pension plan. When a change is made to a plan, an adjustment, a reduction or a regulation, IAS 19 requires that the net defined benefit asset or liability is to be re-measured. The changes require a company to use the updated assumptions from this recalculation to determine the cost of the current service and the net interest for the remainder of the reference period after the plan is changed. The amendments will enter into force from January 1, 2019. The Group is currently evaluating the impacts on the consolidated financial statements.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 80
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The IASB issued on March 29, 2018 a revised version of the Conceptual Framework of the financial statements which includes the accounting standards IFRS. This instrument guarantees that the accounting standards are conceptually correct and that transactions of the same type are treated in the same manner, providing useful information to investors and other stakeholders. The Conceptual Framework helps in addition, businesses to implement adequate accounting policies when no IFRS standard disciplines the specific transaction; in addition, it assists the stakeholders in general to understand the accounting standards. The Conceptual Framework modified includes: a new chapter on the measurement and reporting rules of the financial results; more precise definitions and rules - in particular the definition of liabilities; clarifications on important issues, such as the rules on administration, prudence and uncertainty of calculations in the financial reporting. The amendments will enter into force from January 1, 2020.
On October 22, 2018, the IASB published, in the updated version of IFRS 3 - Business combinations, the amendment to the definition "business". The new definition highlights that the purpose of the business is to provide products and services to clients, while the previous definition focused on the purpose to produce income in the form of dividends, lower costs or other economic benefits for the investors or other parties. The distinction between business and company is fundamental, in that the recognition of goodwill may occur only following the acquisition of a business. The companies apply to the business combinations the new definition of business to transactions whose date is on or subsequent to January 1, 2020.
On October 31, 2018, the IASB published this amendment and clarified in IAS 1 "Presentation of Financial Statements" and in IAS 8 "Accounting policies, changes in accounting estimates and errors" the definition of "significant" and aligned this definition to that utilised in the Conceptual framework and in the IFRS. A disclosure is significant if its omission or erroneous measurement may reasonably influence decisions which the principal users of the financial statements make on the basis of the financial statements. The amendments will enter into force from January 1, 2020.
IFRS 17 - Insurance contracts are excluded from the list since this accounting standard does not pertain to the activity carried out by the Group.
The preparation of the financial statements requires the directors of the Group to undertake discretional valuations, estimates and assumptions which impact upon the amount of revenue, costs, assets and liabilities and related disclosures, as well as potential liabilities. The uncertainty concerning these assumptions and estimates could result in significant changes in the book value of these assets and/or liabilities in the future.
Some elements in the financial statements may not be measured with precision and therefore are subject to estimates which depend on future and uncertain conditions of the company's operations. These estimates over time will incur revision to take into account data and information which is available subsequent to the initial estimates. The effect of the change of accounting estimates must be recorded prospectively in the year in which they occur, including them in the economic result of the year and of future years, where the change also affects this latter. The prospective recognition of the effects of the estimates means that the changes are applied to the transactions on the change in the estimate. The revision or change in the accounting estimate arises from new information or new developments in operating activities and for this reason they do not represent a correction of errors.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 81
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The errors of previous years are omissions and incorrect measurements of accounts in the financial statements of an entity for one or more years deriving from the non-utilisation or the erroneous utilisation of reliable information which was available when the financial statements were authorised for their publication and it is reasonable to consider that such information could have been obtained and utilised in the preparation and presentation of these financial statements. These errors include the effects of arithmetic errors, errors in the application of accounting policies, inaccuracies or distorted interpretations of facts, and fraud. The financial statements are not in accordance with IFRS if they contain significant errors or irrelevant if committed intentionally in order to obtain a specific presentation of the statement of financial position, of the economic result or of the cash flows of the entity. Potential errors of the current year, recorded in the same year, are corrected before the financial statements are authorised for publication. The errors uncovered in subsequent years, if considered significant and if the correction is considered feasible, must be corrected in the comparative disclosure presented in the financial statements for the following year, remeasuring the opening balances of assets, liabilities and shareholders' equity (restatement).
The restatement is not applied and the error is not recorded using the prospective method where the errors and the omissions are considered insignificant.
Omissions or incorrect measurements of accounts are recorded if, individually or overall, they may impact the economic decisions of the readers of the financial statements. The restatement depends on the size and nature of the omission or incorrect measurement assessed depending upon the circumstances.
The key assumptions undertaken by management and which have the most significant effect on the reported amounts or have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below. The Group based its estimates and assumptions on information available at the preparation date of the consolidated financial statements. However, the current circumstances and assumptions on future developments may alter due to changes in the market and events outside of the Group's control. These changes, where occurring, are reflected in the assumptions.
Reference should be made to that previously illustrated in the standard "impairment of non-financial assets" and that illustrated below in Note 1-Intangible Assets.
The Group records investment property at cost, which approximates the fair value of the investment properties given their particular nature (absence of a comparable active market).
The Group provides in the Notes the fair value of the financial instruments. When the fair value of a financial asset or financial liability may no longer be measured based on the prices on an active market, the fair value is determined utilising various valuation techniques, including the discounted cash flow model. The inputs inserted in this model are recorded from observable markets, where possible, but when this is not possible, a certain level of estimation is required to define the fair values. The estimates include considerations on variables such as the liquidity risk, the credit risk and volatility. The changes of the assumptions on these elements may have an impact on the fair value of the financial instrument recorded.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 82
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The Group in the analysis of subsequent events to the reporting date analyses the conditions on which it is necessary to make changes on the accounting data and relative disclosures, depending on whether this concerns events occurring after the reporting date:
The Aeroporto Guglielmo Marconi di Bologna Group, in application of IFRS 8, identified its operating segments as the business areas which generate revenues and costs, whose results are periodically reviewed by the highest decision-making level in order to evaluate the outcome of the decisions concerning the allocation of resources and for which separate financial statements are available.
The Group operating segments as per IFRS 8 - Operating Segment are as follows:
The disclosure concerning operating segments for the Continuing Operations is outlined to reflect the future organisational structure of the Group, with separate disclosure for Discontinued Operations.
In relation to the operating segments, the Group evaluates their performance based on passenger revenues, separating those concerning the aviation sector from those concerning the non-aviation sector.
The account "Other" residually includes those businesses not directly attributable to the identified segments.
In Group operations, financial income and charges and taxes are not allocated to the individual operating segments.
The segment assets are those employed by the segment for operating activities or which may be allocated reasonably for the carrying out of operating activities.
The segment assets presented are measured utilising the same accounting policies adopted for the presentation of the Group consolidated financial statements.
| in thousands of Euro | for the year ended 31.12.2018 Aviation |
for the year ended 31.12.2018 Non-Aviation |
for the year ended 31.12.2018 Other |
Total for the year ended 31.12.2018 |
|---|---|---|---|---|
| Revenues | 70,538 | 43,554 | 0 | 114,092 |
| Costs | (54,798) | (20,576) | 0 | (75,374) |
| EBITDA | 15,740 | 22,978 | 0 | 38,718 |
| Depreciation and amortisation | (6,364) | (3,035) | 0 | (9,399) |
| Provisions | (3,567) | (540) | 0 | (4,107) |
| Operating result | 5,809 | 19,403 | 0 | 25,212 |
| Financial income | 0 | 0 | 384 | 384 |
| Financial expenses | 0 | 0 | (620) | (620) |
| Result before taxes | 5,809 | 19,403 | (236) | 24,976 |
| Taxes for the year | 0 | 0 | (7,049) | (7,049) |
| Profit (loss) for the year | 5,809 | 19,403 | (7,285) | 17,927 |
| Minority interests profit (loss) | 0 | 0 | 0 | 0 |
| Group profit (loss) | 0 | 0 | 0 | 17,927 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 83
| in thousands of Euro | for the year ended 31.12.2017 Aviation |
for the year ended 31.12.2017 Non-Aviation |
for the year ended 31.12.2017 Other |
Total for the year ended 31.12.2017 |
|---|---|---|---|---|
| Revenues | 59,552 | 39,594 | 0 | 99,146 |
| Costs | (45,378) | (19,547) | 0 | (64,925) |
| Gross operating profit | 14,174 | 20,047 | 0 | 34,221 |
| Depreciation and amortisation | (5,970) | (2,853) | 0 | (8,823) |
| Provisions | (2,339) | (433) | 0 | (2,772) |
| Operating result | 5,865 | 16,761 | 0 | 22,626 |
| Financial income | 0 | 0 | 274 | 274 |
| Financial expenses | 0 | 0 | (852) | (852) |
| Result before taxes | 5,865 | 16,761 | (578) | 22,048 |
| Taxes for the year | 0 | 0 | (5,865) | (5,865) |
| Profit (loss) for the year | 5,865 | 16,761 | (6,443) | 16,183 |
| Minority interests profit (loss) | 0 | 0 | 0 | 214 |
| Group profit (loss) | 0 | 0 | 0 | 15,969 |
The table below presents the segment information for assets:
| in thousands of Euro | As at 31.12.2018 Aviation |
As at 31.12.2018 Non-Aviation |
As at 31.12.2018 Other |
Consolidated Financial Statements at 31.12.2018 |
|---|---|---|---|---|
| Non-current assets | 160,917 | 27,401 | 23,720 | 212,038 |
| Intangible assets | 154,111 | 14,240 | 0 | 168,351 |
| Concession rights | 153,032 | 13,260 | 0 | 166,292 |
| Other intangible assets | 1,079 | 980 | 0 | 2,059 |
| Tangible assets | 6,737 | 13,130 | 0 | 19,867 |
| Land, property, plant and equipment | 6,737 | 8,398 | 0 | 15,135 |
| Investment property | 0 | 4,732 | 0 | 4,732 |
| Other non-current assets | 69 | 31 | 23,720 | 23,820 |
| Investments | 0 | 0 | 43 | 43 |
| Other non-current financial assets | 0 | 0 | 16,205 | 16,205 |
| Deferred tax assets | 0 | 0 | 6,108 | 6,108 |
| Other non-current assets | 69 | 31 | 1,364 | 1,464 |
| Current assets | 13,622 | 5,369 | 29,747 | 48,738 |
| Inventories | 379 | 215 | 0 | 594 |
| Trade receivables | 9,512 | 4,760 | 0 | 14,272 |
| Other current assets | 3,731 | 394 | 536 | 4,661 |
| Current financial assets | 0 | 0 | 13,449 | 13,449 |
| Cash and cash equivalents | 0 | 0 | 15,762 | 15,762 |
| Total assets | 174,539 | 32,770 | 53,467 | 260,776 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 84
| in thousands of Euro | As at 31.12.2017 Aviation |
As at 31.12.2017 Non-Aviation |
As at 31.12.2017 Other |
Consolidated Financial Statements at 31.12.2017 |
|---|---|---|---|---|
| Non-current assets | 151,737 | 26,120 | 28,017 | 205,874 |
| Intangible assets | 145,701 | 12,606 | 0 | 158,307 |
| Concession rights | 144,841 | 11,682 | 0 | 156,523 |
| Other intangible assets | 860 | 924 | 0 | 1,784 |
| Tangible assets | 5,941 | 13,461 | 0 | 19,402 |
| Land, property, plant and equipment | 5,941 | 8,729 | 0 | 14,670 |
| Investment property | 0 | 4,732 | 0 | 4,732 |
| Other non-current assets | 96 | 52 | 28,017 | 28,165 |
| Investments | 0 | 0 | 43 | 43 |
| Other non-current financial assets | 0 | 0 | 19,827 | 19,827 |
| Deferred tax assets | 0 | 0 | 6,799 | 6,799 |
| Other non-current assets | 96 | 52 | 1,348 | 1,496 |
| Current assets | 12,622 | 4,744 | 37,406 | 54,772 |
| Inventories | 322 | 216 | 0 | 538 |
| Trade receivables | 9,241 | 3,979 | 0 | 13,220 |
| Other current assets | 3,059 | 549 | 580 | 4,188 |
| Current financial assets | 0 | 0 | 20,617 | 20,617 |
| Cash and cash equivalents | 0 | 0 | 16,209 | 16,209 |
| Assets held-for-sale | 0 | 0 | 117 | 117 |
| Total assets | 164,360 | 30,863 | 65,541 | 260,763 |
Segment disclosure regarding the identified operating segments is undertaken as outlined below.
Aviation: refers to the airport's core business. This includes aircraft landing, take-off and parking fees, passenger boarding fees, freight fees, in addition to passenger security control fees and hand-carry and checked baggage control fees. It includes also cargo handling, customs clearance and fuelling operations. Finally, this segment includes all centralised infrastructure and exclusive assets: the centralised infrastructure represents revenues received in relation to infrastructure under the exclusive operation of the airport management company for reasons of safety, security or in view of their economic impact. Exclusive assets concern check-in desks, the gates and spaces assigned to airport operators.
Non-Aviation: operations not directly connected to the aviation business. This include sub-concession, retail, catering, self-hire and parking management operations, the Marconi Business Lounge and advertising.
The breakdown of revenues and costs between the Aviation and Non-Aviation SBU's follows ENAC's guidelines for analytic/regulatory reporting for airport management companies, in line with Article 11 decies of Law No. 248/05 and the Ministry of Transport Guidelines of December 31, 2006.
The residual accounts excluded from regulatory reporting were subsequently allocated according to the operating criteria.
The main differences were as follows:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 85
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
Group revenues mainly derive from the following clients:
| Description |
|---|
| RYANAIR LTD |
| ALITALIA SAI SPA (pre and post extra. admin.) |
| WIZZ AIR HUNGARY LTD |
| TRAVEL RETAIL ITALIANA SRL |
| BRITISH AIRWAYS PLC |
| LUFTHANSA LINEE AEREE GERMANICHE |
| EMIRATES |
| SOCIETE' AIR FRANCE S.A. |
| VECCHIA MALGA NEGOZI SRL |
AIR DOLOMITI SPA
Aeroporto Guglielmo Marconi di Bologna S.p.A. 86
The following table breaks down intangible assets at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Concession rights | 166,292 | 156,523 | 9,769 |
| Software, licences and similar rights | 1,620 | 1,105 | 515 |
| Other intangible assets | 65 | 71 | (6) |
| Energy Certificates | 0 | 321 | (321) |
| Other intangible assets in progress | 374 | 287 | 87 |
| TOTAL INTANGIBLE ASSETS | 168,351 | 158,307 | 10,044 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 87
The table below presents the changes in intangible assets for the year ended December 31, 2018 compared to December 31, 2017, by asset category.
| 31.12.2017 Movement in the period |
31.12.2018 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| in thousands of Euro | Historic cost | Historical cost | Book value | Increases / Acquisitions |
Amortisation | Decreases / Disposals/ Write-downs |
Decrease provision |
Historic cost | Accumulated amortisation |
Book value |
| Concession rights | 186,452 | (29,929) | 156,523 | 15,651 | (5,760) | (616) | 494 | 201,487 | (35,195) | 166,292 |
| Software, licences and similar rights | 10,056 | (8,951) | 1,105 | 1,832 | (1,317) | 0 | 0 | 11,888 | (10,268) | 1,620 |
| Other intangible assets | 250 | (179) | 71 | 0 | (6) | 0 | 0 | 250 | (185) | 65 |
| Energy Certificates | 321 | 0 | 321 | 68 | 0 | (389) | 0 | 0 | 0 | 0 |
| Intangible assets in progress | 287 | 0 | 287 | 89 | 0 | (2) | 0 | 374 | 0 | 374 |
| TOTAL INTANGIBLE ASSETS | 197,366 | (39,059) | 158,307 | 17,640 | (7,083) | (1,007) | 494 | 213,999 | (45,648) | 168,351 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 88
Concession rights increased at December 31, 2018 by Euro 15.6 million (equal to the fair value of construction services provided in the year), principally due to:
We in addition highlight the supply and installation of new flight information monitors to improve information to the public.
Finally, in 2018, definitive and executive engineering operations commenced for works execution and management with regard to the protection of buildings currently used by State Agencies, while the definitive engineering design works for the multilevel car park close to the eastern area of the airport was concluded.
Amortisation of concession rights in the year amounted to Euro 5.76 million and was applied according to the residual duration of the concession, alongside write-downs of Euro 97 thousand by the Parent Company for projects no longer realisable.
Software, licenses and similar rights increased Euro 1.83 million. This increase principally concerns:
The increase in the account "Energy certificates" concerns the valuation of 194 White Certificates relating to the Trigeneration plant, recorded under Other revenues and income in the Income Statement. At December 31, 2018 all had been sold.
Other intangible assets in progress include software development not concluded at December 31, 2018.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 89
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
For the year 2018, the Group undertook an impairment test in order to assess the existence of any longterm losses in value with reference to the amounts recorded under Concession Rights, equal to Euro 166 million at December 31, 2018 (corresponding respectively to 63.77% of the total assets and to 95.73% of the total shareholders' equity at December 31, 2018); these Concession Rights are subject to impairment test at least once a year on the approval of the financial statements.
The test, as per IAS 36, compares the carrying value of the asset or group of assets of the cash generating unit (CGU) with the recoverable value, arising from the higher between the fair value (net of selling costs) and the discounted net cash flows which are expected to be produced from the asset or group of assets of the CGU (value in use). In consideration of the fact that the airport concession terminates in 2044, the explicit economic-financial projections for the period 2019-2044 were utilised, and in conformity with the new Article 703 of the Navigation Code, as modified by Article 15-quinquies, paragraph 1 of Legislative Decree No. 148 of October 16, 2017, converted with modifications into Law No. 172 of December 4, 2017 a "Terminal Value" was utilised.
This method is based on the presumption that the economic capital value of a company at a certain date (in the present case December 31, 2018) is representative of the algebraic sum of the following elements:
For impairment testing purposes, the Group has identified a single CGU which coincides with the Aeroporto G. Marconi di Bologna S.p.A. Group.
For the analysis outlined above, the cash flows were taken from the 2019-2044 economic-financial projections formulated by the Board of Directors of February 21, 2019. This latter also approved the methodology relating to the impairment test.
The tariffs utilised for the calculation of the cash flows for the impairment test, in relation to the aeronautical revenues, were simulated on the basis of the interventions contained in the new 2019-2023 Interventions Plan and on the interventions scheduled from 2024 to 2044. For the subsidiaries, the revenues were estimated on the basis of the 2019-2023 Plans elaborated based on the detailed projections on expected traffic volumes.
Revenues from Non-Aeronautical Services and Other Revenues were calculated based on the budget estimates for the period 2019-2023 of the contracts in place, of the historical data and of the forecast passenger traffic which represents a key element also for these revenues. For the period 2024-2044, in line with the historical data and conservatively compared to the 2019-2023 forecasts, an annual revenue increase was projected of 3.8% from 2024 to 2044.
The objectives and the assumptions of the 2019-2044 economic-financial projections were determined taking into account the historical results of the operations and were calculated on the basis of the estimates of the passenger traffic and of the relative revenues, as well as the estimates calculated on the basis of the principal industry analysis and studies, also utilising reasonable growth parameters and not exceeding those expected within the industry. In relation to this we highlight that:
(i) these objectives and assumptions utilised as reference the annual results, which therefore incorporate the interim results of the company and also the historic results of the entire year;
Aeroporto Guglielmo Marconi di Bologna S.p.A. 90
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
(ii) these long-term forecasts were elaborated on the basis of the growth objectives and improvements compared to the historical results and therefore contain elements of uncertainty and may be considered challenging;
(iii) the industry studies to which the Group made reference for the afore-mentioned long-term forecasts take into account both inter-European traffic and global traffic. The Bologna Airport traffic is prevalently based in Europe and has recently been developing inter-continental routes; therefore, it was considered appropriate to utilise these industry studies.
The operating cash flow was discounted utilising the UDCF (Unlevered Discounted Cash Flow) at a rate equal to the weighted average cost of debt and own funds (WACC - Weighted Average Cost of Capital), equal to 6.75%, determined through the application of the Capital Asset Pricing Model ("CAPM") with:
The cost of third-party capital was calculated applying to the IRS 10 years the spread applied in the last loan underwritten, net of the tax effect (24%) equal to 2.28%.
The weighting of own funds and of debt capital equal to respectively 78.6% and 21.4% was made on the basis of an average gearing of industry peers equal to 27.2%.
A premium was also applied on the additional risk equal to 1.0% taking into account the following factors:
Based on that outlined above the company therefore determined a WACC of 6.75%.
The impairment test performed did not identify any impairment of the carrying amounts of the concession rights in 2018 and no impairment losses were therefore recognised on the assets concerned.
The Group considered it appropriate to undertake some sensitivity analysis in order to verify the impacts on the recoverable amount deriving from changes considered reasonable possible in the following parameters considered significant:
and analysing the impacts which this change has in relation to the differential with the value of the Net Capital Employed ("NCE") and with the account Intangible Assets.
Neither of the sensitivities indicated any impairment.
The value of the EBITDA margin which renders the value of the CGU equal to the book value of the Net Capital Employed is 33.67%.
The value of the WACC which renders the value of the CGU equal to the book value of the Net Capital Employed is 8.5%.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 91
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The Group did not consider it necessary to obtain a specific fairness opinion on the impairment tests undertaken on the Concession Rights recorded under Intangible Assets, also in consideration of the accounting criteria on the basis of the costs incurred and not on the basis of specific market values or fair values of these intangible assets.
An impairment test simulation was also undertaken considering in the determination of the WACC a duration of the interest rates (free risk rate and swap rate) of 30 years, a duration which approximates the residual duration of the airport concession. Also in these cases, the test did not result in any impairment.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 92
The following table breaks down tangible assets at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | |
|---|---|---|---|
| Land | 2,763 | 2,763 | 0 |
| Buildings, light constructions and improvements | 4,146 | 4,500 | (354) |
| Machinery, equipment & plant | 3,066 | 3,299 | (233) |
| Furniture, EDP and internal transport | 2,181 | 1,952 | 229 |
| Tangible fixed assets in progress | 2,979 | 2,156 | 823 |
| Investment property | 4,732 | 4,732 | 0 |
| TOTAL TANGIBLE ASSETS | 19,867 | 19,402 | 465 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 93
The table below shows the changes in tangible assets for the period ended December 31, 2018 compared to December 31, 2017, by asset category.
| 31.12.2017 | Movement in the year | 31.12.2018 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| in thousands of Euro | Historical cost |
Accumulated depreciation |
Book value | Increases/Acquisitions | Depreciation | Decreases/Disposals/ Write-downs |
Decrease provision |
Historical cost |
Accumulated depreciation |
Book value |
|
| Land | 2,763 | 0 | 2,763 | 0 | 0 | 0 | 0 | 2,763 | 0 | 2,763 | |
| Buildings, light constructions and improvements | 8,384 | (3,884) | 4,500 | 67 | (421) | 0 | 0 | 8,451 | (4,305) | 4,146 | |
| Machinery, equipment & plant | 13,534 | (10,236) | 3,299 | 941 | (1,171) | (26) | 23 | 14,449 | (11,384) | 3,066 | |
| Furniture, EDP and transport | 8,698 | (6,746) | 1,952 | 859 | (627) | (82) | 79 | 9,475 | (7,294) | 2,181 | |
| Tangible fixed assets in progress | 2,156 | 0 | 2,156 | 823 | 0 | 0 | 0 | 2,979 | 0 | 2,979 | |
| Investment property | 4,732 | 0 | 4,732 | 0 | 0 | 0 | 0 | 4,732 | 0 | 4,732 | |
| TOTAL TANGIBLE ASSETS | 40,267 | (20,866) | 19,402 | 2,690 | (2,219) | (108) | 102 | 42,849 | (22,983) | 19,867 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 94
In 2018, this category increased by Euro 2.69 million and mainly concerns, in addition to furniture and EDP, the purchase and installation of:
The depreciation of tangible assets in the year amounted to Euro 2.7 million.
Tangible fixed assets in progress include amounts incurred for projects not concluded at December 31, 2018, among which the first two tranches totalling Euro 1.78 million of the contributions granted by the Parent Company to Marconi Express Spa for the construction of the People Mover "Airport" station following completion of 66% of the airport area works in addition to works in progress on the footbridge connection between the station and the terminal.
Investment property includes the total value of land owned by the Group earmarked for the construction of investment property; these amounts were initially recorded at purchase cost and subsequently measured using the cost method.
This land is not subject to amortisation but, as per IAS 40, a technical report is undertaken to support the fair value. The technical report undertaken internally by the Parent Company confirms that the value of the inscription cost approximates, for nature and strategic value of the investment, its fair value. At the preparation date of the consolidated financial statements, there were no impairment indicators on these assets.
The investment in the associate Ravenna Terminal Passeggeri S.r.l., taking into account the forecasted negative results for the years 2015 and 2016, was written down in 2014. The results in subsequent years confirmed this forecast (loss in 2015 of Euro 47 thousand, loss in 2016 of Euro 27 thousand and profit in 2017 of Euro 1 thousand).
The following table breaks down other investments at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2017 |
Increases / Acquisitions |
Decreases / Disposals |
Write-downs | As at 31.12.2018 |
|---|---|---|---|---|---|
| Other investments | 43 | 0 | 0 | 0 | 43 |
| TOTAL INVESTMENTS | 43 | 0 | 0 | 0 | 43 |
| in thousands of Euro | Holding | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|---|
| Consorzio Energia Fiera District | 14.3% | 3 | 3 | 0 |
| CAAF dell'Industria Spa | 0.07% | 0 | 0 | 0 |
| Bologna Welcome Srl | 10% | 40 | 40 | 0 |
| TOTAL OTHER INVESTMENTS | 43 | 43 | 0 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 95
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The following table shows the movements in other non-current financial assets for the year ended December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2017 |
Increases/ Acquisitions |
Decreases / Reclass. |
Write downs |
As at 31.12.2018 |
|---|---|---|---|---|---|
| Equity Financial Instruments | 10,000 | 873 | 0 | 0 | 10,873 |
| Escrow bank accounts/Saving bonds | 9,570 | 5,000 | (9,500) | 0 | 5,070 |
| Other financial assets | 257 | 5 | 0 | 0 | 262 |
| TOTAL OTHER NON-CURRENT FINANCIAL ASSETS | 19,827 | 5,878 | (9,500) | 0 | 16,205 |
At December 31, 2018 the account "Other non-current financial assets" mainly comprises:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 96
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
instrument is measured at fair value through profit or loss. Also in this case there are no changes compared to the previous accounting treatment.
The following table presents the movements in deferred tax assets for the year ended December 31, 2018 compared with December 31, 2017.
| in thousands of Euro | As at 31.12.2017 | Provisions | Util./Reclass. | As at 31.12.2018 |
|---|---|---|---|---|
| DEFERRED TAX ASSETS | 6,799 | 870 | (1,561) | 6,108 |
The tables below outline the breakdown of the items resulting in the recognition of deferred tax assets, broken down between IRES and IRAP.
In particular:
| IRES rate 24% | Assessable | Tax | ||||||
|---|---|---|---|---|---|---|---|---|
| in thousands of Euro | at 31.12.2017 | Increases | Uses | at 31.12.2018 at 31.12.2017 | Increases | Uses | at 31.12.2018 | |
| 1) Other costs IRES deferred deductibility | 7,787 | 2,605 | (2,539) | 7,853 | 1,869 | 624 | (609) | 1,884 |
| 2) Provision for doubtful accounts | 860 | 48 | (6) | 902 | 206 | 12 | (1) | 217 |
| 3) IRES deferred tax provisions | 1,293 | 291 | (3) | 1,581 | 310 | 70 | (1) | 379 |
| 4) Provision for renewal of airport infrastructure | 11,040 | (567) | 10,473 | 2,652 | (140) | 2,512 | ||
| 5) Amortisation concession rights from ENAC- ENAV agreement |
235 | (14) | 221 | 57 | (3) | 54 | ||
| 6) Listing costs | 1,849 | (925) | 924 | 444 | (222) | 222 | ||
| 7) Disc. sever. prov. plus other long-term personnel costs | 474 | 53 | (185) | 342 | 88 | 13 | (44) | 57 |
| 8) Amortisation start-up and expansion costs | 20 | 3 | (2) | 21 | ||||
| 9) Tax losses recoverable | 792 | (164) | 628 | 190 | (39) | 151 | ||
| Total IRES | 24.350 | 3.000 | (4, 405) | 22,945 | 5,821 | 719 | (1,059) | 5,481 |
| IRAP rate 4.2%-3.9% | Assessable | Tax | ||||||
|---|---|---|---|---|---|---|---|---|
| in thousands of Euro | at 31.12.2017 | Increases | Uses | at 31.12.2018 at 31.12.2017 | Increases | Uses | at 31.12.2018 | |
| IRAP deferred tax provisions | 435 | 6 | (3) | 438 | 19 | 19 | ||
| Provision for renewal of airport infrastructure | 13.073 | 3,559 | (4.499) | 12,133 | 549 | 149 | (190) | 508 |
| Amortisation start-up and expansion costs FTA | 20 | (2) | 21 | |||||
| Amortisation concess. rights from ENAC-ENAV agreement | 163 | (14) | 149 | (1) | ||||
| Discounting other Long-term personnel costs | 118 | 53 | (53) | 118 | (2) | |||
| Total IRAP | 13.809 | 3,621 | (4,571) | 12,860 | 581 | 151 | (193) | 539 |
The following table on the other hand shows the tax credits, within AdB, for the utilisation of the fiscal benefits in relation to: interventions for energy recovery; capex investments as per Article 18 of Law-Decree No. 91/2014; R&D investments as per Article 1, paragraph 35 of Law No. 190/2014. In relation to the utilisation of the R&D tax credits, the company in 2018 did not continue its research and development activities, rather focusing on projects which would increase the performance of the IT infrastructure and on the consolidation of activities already commenced. The objective taking into account also the Investment Plan is to continue the research activities in 2019 and 2020.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 97
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
| Others | Tax receivable | |||||
|---|---|---|---|---|---|---|
| In thousands of Euro | As at 31.12.2017 | Increases | Uses | As at 31.12.2018 | ||
| Other Receivables | 397 | (309) | 88 | |||
| Total Others | 397 | 0 | (309) | 88 |
The following table breaks down other non-current assets at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Non-current prepaid expenses and accrued income | 59 | 108 | (49) |
| Guarantee deposits | 88 | 84 | 4 |
| Non-current tax receivables | 1,317 | 1,304 | 13 |
| OTHER NON-CURRENT ASSETS | 1,464 | 1,496 | (32) |
The main account relates to non-current tax receivables concerning the receivable recorded following the IRES reimbursement request for the non-deduction of IRAP on personnel costs (Legislative Decree 201/2011 and Tax Agency Decision No. 2012/140973 of 2012) for Euro 1 million. This amount includes the share of the subsidiaries Tag Bologna and Fast Freight Marconi and the former subsidiary Marconi Handling within the Group fiscal consolidation whose settlement will be undertaken directly by the Parent Company based on the tax consolidation agreement in the year the amounts are recorded in the financial statements.
The following table breaks down inventories at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Inventories of raw materials, supplies and consumables | 527 | 487 | 40 |
| Inventories of finished products | 67 | 51 | 16 |
| INVENTORIES | 594 | 538 | 56 |
Ancillary and consumable inventories did not change significantly and concern inventories held of workshop materials, heating fuel and de-icing liquid for the runway and for aircraft, as well as stationary and printing material. Finished product inventories concerns aviation fuel.
The table below illustrates the trade receivables and the relative doubtful debt provision:
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Trade receivables | 15,230 | 14,128 | 1,102 |
| Provisions for doubtful accounts | (958) | (908) | (50) |
| TRADE RECEIVABLES | 14,272 | 13,220 | 1,052 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 98
The Group places great importance on the management of receivables, as seen in the contained increase in trade receivables despite the increase in revenues in 2018 and the consequent further decrease in the average collection days from 42 to 41 days (see Paragraph Key Indicators in the Directors' Report).
At December 31, 2018 trade receivables for Euro 14.3 million were recorded net of the provision for doubtful accounts of Euro 1 million, whose valuation was impacted, although not significantly, by the new accounting standards and in particular IFRS 9 with the adoption from January 1, 2018 of the Provision Matrix method. As illustrated in the Notes to the 2017 Annual Report concerning the new accounting standards, the impact is not significant considering the most significant part of the provision comprises write-downs based on specific analysis of overdue amounts and/or disputes, whose probability of recovery is estimated also through the support of legal advisors and taking into account guarantees received from clients. On the residual debtor balance, classified by customer category and overdue period, the simplified parameter method was applied permitted by IFRS 9 to companies with a diversified and fragmented client portfolio.
The movements in the provision for doubtful accounts were as follows:
| in thousands of Euro | As at 31.12.2017 |
Provisions | Utilizations | Releases | As at 31.12.2018 |
|---|---|---|---|---|---|
| PROVISIONS FOR DOUBTFUL ACCOUNTS | (908) | (97) | 22 | 25 | (958) |
| in thousands of Euro | As at 31.12.2016 |
Provisions | Utilizations | Releases | As at 31.12.2017 |
| PROVISIONS FOR DOUBTFUL ACCOUNTS | (1,368) | (364) | 763 | 61 | (908) |
The provisions in the year total Euro 105 thousand, of which Euro 97 thousand classified in the account provisions in the income statement and the residual Euro 8 thousand recorded as a direct reduction of the relative revenues as concerning amounts matured in 2018 which are no longer considered collectible.
An analysis of the aging of trade receivables of the Group at December 31, 2018 compared with December 2017, 2017 is reported below:
| in thousands of Euro | Not yet due |
Overdue | Total as at 31.12.2018 |
|---|---|---|---|
| Trade receivables for invoices/credit notes issued | 8,459 | 6,733 | 15,192 |
| Trade receivables for invoices/credit notes to be issued | 38 | 0 | 38 |
| TOTAL TRADE RECEIVABLES | 8,497 | 6,733 | 15,230 |
| in thousands of Euro | Not yet due |
Overdue 0-30 days |
Overdue 30- 60 days |
Overdue 60-90 days |
Overdue beyond 90 |
Total |
|---|---|---|---|---|---|---|
| TRADE RECEIVABLES | 8,459 | 3,956 | 845 | 396 | 1,536 | 15,192 |
| in thousands of Euro | Not yet due |
Overdue | Total as at 31.12.2017 |
|
|---|---|---|---|---|
| Trade receivables for invoices/credit notes issued | 8,179 | 5,925 | 14,104 | |
| Trade receivables for invoices/credit notes to be issued | 24 | 0 | 24 | |
| TOTAL TRADE RECEIVABLES | 8,203 | 5,925 | 14,128 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 99
| in thousands of Euro | Not yet due |
Overdue 0-30 days |
Overdue 30- 60 days |
Overdue 60-90 days |
Overdue beyond 90 |
Total |
|---|---|---|---|---|---|---|
| TRADE RECEIVABLES | 8,179 | 3,314 | 933 | 133 | 1,545 | 14,104 |
The following table breaks down other current assets at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| VAT Receivable | 136 | 303 | (167) |
| Direct income tax receivables | 22 | 5 | 17 |
| Other tax receivables | 3 | 26 | (23) |
| Employee receivables | 88 | 74 | 14 |
| Other receivables | 4,412 | 3,780 | 632 |
| OTHER CURRENT ASSETS | 4,661 | 4,188 | 473 |
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Prepayments and accrued income | 298 | 316 | (18) |
| Advances to suppliers | 105 | 14 | 91 |
| Pension and social security institutions | 54 | 60 | (6) |
| Municipal surtax receivable | 4,538 | 3,897 | 641 |
| Other current receivables provision for doubtful accounts | (1,088) | (1,085) | (3) |
| Other current receivables | 505 | 578 | (73) |
| TOTAL OTHER RECEIVABLES | 4,412 | 3,780 | 632 |
Relating to the account "Municipal surtax receivable" the Group charged the carriers the boarding fee municipal surtax, as per Article 2, paragraph 11 of Law 350/2003 and subsequent integrations and modifications, and once collected, paid the amount to the State and to INPS respectively in the measure of Euro 1.50 and Euro 5.00 per passenger boarded - an amount valid until December 31, 2015 and from January 1, 2017.
The municipal surtax receivable increased in the year due to the increase in traffic as in 2018 there were no tariff changes considering that Article 55 of the "2017 Budget Law" provided for the definitive suppression, from January 1, 2017, of the municipal surtax, equal to Euro 2.41 for 2017 and Euro 2.34 for 2018, introduced by Article 13, paragraphs 21 and 23 of Law Decree 145/2013.
The account "other current receivables provision for doubtful accounts" includes the provision for municipal surtax doubtful accounts obtained for reclassification under assets in the statement of financial position, as a deduction of the respective receivable, of the municipal surtax to the carriers which in the meantime were subject to administration procedures or which contested the charge. This account:
does not involve any provisions to the Income Statement,
was classified as a deduction of the respective receivables due to the high improbability of recovery and the changes in the period are as shown in the table below:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 100
| in thousands of Euro | As at 31.12.2017 |
Provisions/Increases Utilizations | Releases | As at 31.12.2018 |
|
|---|---|---|---|---|---|
| Provision for municipal surtax doubtful accounts | (1,085) | (13) | 0 | 10 | (1,088) |
| TOTAL OTHER RECEIVABLES PROVISION FOR DOUBTFUL ACCOUNTS | (1,085) | (13) | 0 | 10 | (1,088) |
The following table breaks down current financial assets at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Bonds | 0 | 4,574 | (4,574) |
| Deposit accounts | 13,400 | 16,000 | (2,600) |
| Other financial receivables | 49 | 43 | 6 |
| CURRENT FINANCIAL ASSETS | 13,449 | 20,617 | (7,168) |
The changes in the period in other current financial assets are illustrated in the table below.
| in thousands of Euro | As at 31.12.2017 |
Acquisitions | Other increases/ reclassifications |
Decreases / Disposals |
As at 31.12.2018 |
|---|---|---|---|---|---|
| Bonds | 4,574 | 0 | 0 | (4,574) | 0 |
| Deposit accounts | 16,000 | 3,900 | 9,500 | (16,000) | 13,400 |
| Other financial receivables | 43 | 0 | 6 | 0 | 49 |
| TOTAL OTHER CURRENT FINANCIAL ASSETS | 20,617 | 3,900 | 9,506 | (20,574) | 13,449 |
This category of financial investments also meets the Group's temporary needs to invest liquidity in order to obtain the contractual cash flows. As per IFRS 9, these investments are classified in the category "Held to collect - HTC". The contractual maturity defined, the yield
Aeroporto Guglielmo Marconi di Bologna S.p.A. 101
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
defined and calculated on the notional amount permits the passing of the SPPI tests and therefore the valuation at amortised cost in continuity with that undertaken in previous years in application of IAS 39.
The movements in the year were also due to the following:
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | |
|---|---|---|---|
| Bank and postal deposits | 15,735 | 16,182 | (447) |
| Cash in hand and similar | 27 | 27 | 0 |
| CASH AND CASH EQUIVALENTS | 15,762 | 16,209 | (447) |
"Bank and postal deposits" represent the bank current account balances.
The following table shows the breakdown of the assets held-for-sale:
| in thousands of Euro | As at 31.12.2018 | at 31.12.2017 | |
|---|---|---|---|
| Investment in Bologna Congressi Spa | 0 | 117 | (117) |
| ASSETS HELD-FOR-SALE | 0 | 117 | (117) |
At December 31, 2017 this account comprises the investment of 10% in Bologna Congressi Spa, which was sold on February 23, 2018 to Bologna Fiera Spa, majority shareholder of Bologna Congressi spa. At December 31, 2017, the capital profit of Euro 0.013 million was recorded as a shareholders' equity reserve. At December 31, 2018, given the completion of the operation, the reserve was eliminated and the profit recorded under financial income in account 28 of the Income Statement.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 102
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The following table shows the breakdown of the net financial position at December 31, 2018 and December 31, 2017, in accordance with Consob Communication of July 28, 2006 and the ESMA/2011/81 Recommendations:
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | |
|---|---|---|---|
| A | Cash | 27 | 27 |
| B | Other cash equivalents | 15,735 | 16,182 |
| C | Securities held for trading | 0 | 0 |
| D | Cash and cash equivalents (A)+(B)+(C) | 15,762 | 16,209 |
| E | Current financial receivables | 13,449 | 20,617 |
| F | Current bank debt | (43) | (54) |
| G | Current portion of non-current debt | (4,433) | (5,807) |
| H | Other current financial debt | (2,050) | (1,806) |
| I | Current financial debt (F)+(G)+(H) | (6,526) | (7,667) |
| J | Net current financial position (I)-(E)-(D) | 22,685 | 29,159 |
| K | Non-current bank debt | (14,690) | (19,109) |
| L | Bonds issued | 0 | 0 |
| M | Other non-current debt | 0 | 0 |
| N | Non-current financial debt (K)+(L)+(M) | (14,690) | (19,109) |
| O | Net financial debt (J)+(N) | 7,995 | 10,050 |
The accounts A + B are equal to the balance of the account "cash and cash equivalents"; reference should be made to note 11 for further details.
The account C + E is equal to the account "current financial assets"; reference should be made to note 10 for further details.
The accounts F + G + H are equal to the balance of the account "current financial liabilities"; reference should be made to note 23 for further details.
The account K is equal to the balance of the account "non-current financial liabilities"; reference should be made to note 18 for further details.
For a detailed analysis on the movements in the net financial position in the two-year period 2018- 2017 reference should be made to the analytical analysis in the Directors' Report.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 103
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The following table breaks down the Shareholders' Equity at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Share capital | 90,314 | 90,314 | 0 |
| Reserves | 65,469 | 65,218 | 251 |
| Profit (loss) for the year | 17,927 | 15,969 | 1,958 |
| GROUP SHAREHOLDERS' EQUITY | 173,710 | 171,501 | 2,209 |
The share capital of the Parent Company at December 31, 2018 amounts to Euro 90,314,162, entirely paidin and comprising 36,125,665 ordinary shares without par value.
The following table outlines the calculation of the basic and diluted earnings per share:
| in Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
|---|---|---|
| Group profit (loss) | 18,025,716 | 15,987,383 |
| Average number of shares outstanding | 36,125,665 | 36,125,665 |
| Undiluted earnings per share | 0.50 | 0.44 |
| Diluted earnings per share | 0.50 | 0.44 |
(*) Consolidated Statement of Comprehensive Income
The undiluted earnings and diluted earnings per share of the AdB Group at December 31, 2018 and at December 31, 2017 are the same due to the absence of potential dilutive instruments.
The following table breaks down the Reserves at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Share premium reserve | 25,683 | 25,683 | 0 |
| Legal reserve | 6,310 | 5,545 | 765 |
| Extraordinary reserve | 36,437 | 35,600 | 837 |
| FTA Reserve | (3,272) | (3,222) | (50) |
| Profits/(losses) carried forward | 1,132 | 2,513 | (1,381) |
| OCI Reserve | (821) | (914) | 93 |
| Assets held-for-sale reserve | 0 | 13 | (13) |
| TOTAL RESERVES | 65,469 | 65,218 | 251 |
The share premium reserve comprises:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 104
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
Pursuant to Article 2431 of the Civil Code this reserve is available but may not be distributed until the legal reserve has reached the limit established as per article 2430 of the Civil Code.
The legal reserve increased mainly due to the allocation of the profit in the previous year and, for a minor part, the allocation to the Group of the profit of previous years of minority interests.
The extraordinary reserve increased exclusively due to the allocation of the profit in the previous year. This reserve entirely comprises profits from previous years.
The change in the FTA reserve derives from the allocation to the Group of the FTA reserve of the minority interests until the previous year.
The change in the retained earnings is due to:
The OCI reserve records the changes in the year deriving from the discounting of the Severance and other personnel provisions (Note 14) in accordance with IAS 19 revised, net of the relative tax effect in addition to the allocation to the Group of the actuarial gains/losses previously relating to Minority interests.
The assets held-for-sale reserve, which at December 31, 2017 included the profit arising from the difference in the carrying value of the investment in Bologna Congressi Spa and the sales value, was eliminated due to the completion of the operation on February 23, 2018, with recognition of the higher value under financial income in the Income Statement.
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| IAS 19 actuarial profits/losses | (1,080) | (1,209) | 129 |
| Deferred taxes on actuarial profits/losses - IAS 19 | 259 | 289 | (30) |
| OCI RESERVE | (821) | (920) | 99 |
| of which minority interest | 0 | (6) | 6 |
| of which Group | (821) | (914) | 93 |
The following table breaks down the reserves at December 31, 2018 and the comparative period:
Completing the information on the changes in Shareholders' equity in the year, we report the distribution of dividends approved by the Shareholders' Meeting of the Parent Company of April 24, 2018 for Euro 14 million corresponding to a gross dividend of Euro 0.392 for each of the 36,125,665 ordinary shares in circulation at the dividend coupon date.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 105
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
At December 31, 2018 the Minority Interest Shareholders' Equity was eliminated following the acquisition on October 2, 2018 by the Parent Company of the residual 49% of Tag owned by Minority Shareholders.
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Share Capital - Minority interests | 0 | 155 | (155) |
| Reserves - Minority interests | 0 | 451 | (451) |
| Profit/Loss - Minority interests | 0 | 215 | (215) |
| MINORITY INTEREST SHAREHOLDERS' EQUITY | 0 | 821 | (821) |
The following table breaks down severance and other personnel provisions at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change | |
|---|---|---|---|---|
| Severance | 4,087 | 4,287 | (200) | |
| Other personnel provisions | 118 | 118 | 0 | |
| SEVERANCE AND OTHER PERSONNEL PROVISIONS | 4,205 | 4,405 | (200) |
The table below shows the movements in the provisions in the period:
| in thousands of Euro | As at 31.12.2017 | Service Net cost interest |
Benefits paid |
Actuarial profits/(losses) |
As at 31.12.2018 |
|
|---|---|---|---|---|---|---|
| Severance | 4,287 | 13 | 60 | (144) | (129) | 4,087 |
| Other personnel provisions | 118 | 79 | 1 | (78) | (2) | 118 |
| SEVERANCE AND OTHER PERSONNEL PROVISIONS | 4,405 | 92 | 61 | (222) | (131) | 4,205 |
The actuarial valuation of severance provisions is carried out on the basis of the "benefits matured" with the support of actuarial experts.
The principal assumptions in the actuarial estimation process of the severance provisions for the years concerned are as follows:
As for any actuarial valuation the results depend on the technical bases adopted such as, among others, interest rate, inflation rate and expected turnover. The table below shows the sensitivity for each actuarial assumption at the end of the year, highlighting the effects of the changes of the actuarial assumptions reasonably possible at that date, in absolute terms.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 106
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
| Valuation parameter | ||||||||
|---|---|---|---|---|---|---|---|---|
| in thousands of Euro | +1 % on -1 % on turnover turnover rate rate |
+ 0.25% on annual inflation rate |
- 0.25% on annual inflation rate |
+ 0.25% on - 0.25% on annual discount annual discount rate |
||||
| Severance | 4,070 | 4,105 | 4,149 | 4,024 | 3,988 | 4,189 |
For completeness the following table also shows the expected disbursements of the plan over a 5-year period:
| Years | Estimated future disbursements (In thousands of Euro) |
|---|---|
| 1 | 210 |
| 2 | 233 |
| 3 | 186 |
| 4 | 255 |
| 5 | 302 |
The other personnel provisions at December 31, 2018 concern the long-term incentive plan and the noncompetition agreement of the Chief Executive Officer/General Manager as governed by the Remuneration Policy commented upon in the Corporate Governance and Share Ownership Report, to which reference should be made.
The actuarial valuation at December 31, 2018 of the long-term incentive plan (II cycle 2016-2018, III cycle 2017-2019 and IV 2018-2020) and the non-competition agreement was made with the support of actuarial experts utilising the "benefits matured" method based on IAS 19 (paragraphs 67-69) through the "Project Unit Credit" criterion. Under this method the valuation is based on the average present value of the obligations matured based on the employment service up to the time of the valuation. The main valuation parameters were:
Finally, we report the sensitivity which highlights the effects on the other employee provisions, in particular on the provision relating to the non-competitive agreement, in the case of termination of employment with probability equal to 10%:
| in thousands of Euro | Service cost |
|---|---|
| Other personnel provisions | 43 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 107
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The following table breaks down the deferred tax liabilities at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | at 31.12.2017 | Provisions Uses |
As at 31.12.2018 | |
|---|---|---|---|---|
| DEFERRED TAX LIABILITIES | 2,371 | 85 | 0 | 2,456 |
The deferred tax liability provision amounts to Euro 2.5 million. The deferred tax liabilities were recorded on transition to IFRS following the application of IFRIC 12 "Service concession arrangements", as illustrated in the note relating to the Transition to International Accounting Standards IFRS in the 2014 Financial Statements. The increase in the year is also attributable to the application of IFRIC 12 on the investments in concession rights without any tax impact.
| IRES rate 24% | Assessable | Tax | ||||||
|---|---|---|---|---|---|---|---|---|
| in thousands of Euro | at 31.12.2017 | Increases | Uses | at 31.12.2018 | at 31.12.2017 | Increases | Uses | at 31.12.2018 |
| Amortisation Concession rights | 8,466 | 314 | 8,780 | 2,030 | 76 | 2,106 | ||
| Total IRES | 8,466 | 314 | 0 | 8,780 | 2,030 | 76 | 0 | 2,106 |
| IRAP rate 4.2% | Assessable | Tax | ||||||
|---|---|---|---|---|---|---|---|---|
| in thousands of Euro | at 31.12.2017 | Increases | Uses | at 31.12.2018 | at 31.12.2017 | Increases | Uses | at 31.12.2018 |
| Amortisation Concession rights | 8,094 | 213 | 8,307 | 341 | 9 | 350 | ||
| Total IRAP | 8,094 | 213 | 0 | 8,307 | 341 | 9 | 0 | 350 |
| Total | 2,371 | 85 | 0 | 2,456 |
The provision for renewal of airport infrastructure includes the provision allocated to cover the conservation maintenance expenses and renewal of the assets held under concession which the Group must return at the end of the concession period, scheduled in 2044, in perfect functioning state.
The following table presents the movements for the provision for the year ended December 31, 2018 together with the table as per note 21, relating to the current portion of the provision.
| in thousands of Euro | As at Provisions 31.12.2017 |
Utilizations | Reclassifications | As at 31.12.2018 |
|
|---|---|---|---|---|---|
| PROVISIONS FOR RENEWAL OF AIRPORT INFRASTRUCTURE (NON-CURRENT) | 9,575 | 3,560 | (1,046) | (1,757) | 10,332 |
The increases in 2018 totalled Euro 3.56 million, of which Euro 3.75 million classified under provisions in the income statement and the residual of Euro 0.19 million recorded under financial income from discounting.
The uses of the provision total Euro 4.54 million of which Euro 3.5 million recorded in the current provision for renewal of airport infrastructure (note 21) and the residual as utilisation of the non-current provision as illustrated above. In 2018 the utilisations exceeded the scheduled provisions due to the greater amount of work on the runway and the extraordinary maintenance of the taxiway during the four days of airport closure in the middle of September, in addition to miscellaneous works, including the renewal of the terminal roofing and of the cargo building.
At December 31, 2018 the infrastructure renewal provision totals Euro 12.1 million.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 108
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The decreases from reclassifications concern the periodic reclassification to current liabilities of the disbursements expected in the twelve months subsequent to period end.
For completeness the following table shows the sensitivity in the interest rates applied for the discounting of the provision for renewal of airport infrastructure at December 31, 2018:
| in thousands of Euro | Financial (charges)/income balance |
Sensitivity Analysis (+0.5%) |
Sensitivity Analysis (-0.1%) |
|
|---|---|---|---|---|
| Provisions for renewal of airport | ||||
| Infrastructure | 193 | 126 | 208 |
The discounting curve utilised for the valuation includes the country risk. In this specific case the input data utilised was the short, medium and long-term zero-coupon government bonds (from 3 months to 30 years), sourced from the information provider Bloomberg.
The changes in the provision for "Risks and charges" in the year are reported below:
| in thousands of Euro | As at 31.12.2017 |
Provisions | Util./Other decreases |
As at 31.12.2018 |
|---|---|---|---|---|
| Risk provision for disputes | 842 | 35 | (2) | 875 |
| Employee back-dated provision | 270 | 256 | (526) | 0 |
| Other provisions for risks and charges | 153 | 0 | 0 | 153 |
| PROVISIONS FOR RISKS AND CHARGES (NON-CURRENT) | 1,265 | 291 | (528) | 1,028 |
The main change concerns the employee back-dated provision on which, within the framework of the renewal of the Airport Operators Trade Union Agreement expired on December 31, 2016 and of the Assohandlers Trade Union Agreement expired on June 30, 2017, an estimate of the liabilities for a Oneoff/back-dated employee payments was accrued for the period. The utilisations derive from the reclassification of the liabilities from non-current provisions (note 22), as the closure is estimated during the year 2019.
On July 26, 2016, on the completion of a general review commenced on May 18, 2016 for the year 2013 of the Parent Company, the Bologna Tax Agency prepared a tax assessment highlighting a presumed derecognition of the IRES deductibility of the loss of Euro 5 million deriving from the enforcement of the surety guarantee issued in 2007 by AdB to the financial institutions of SEAF, Società di Gestione dell'Aeroporto di Forlì, company declared bankrupt in 2013.
The Directors, taking account of the factual and legal arguments of the Parent Company, as formalised in the petitions forwarded to the Tax Agency concerning the financial and therefore tax reasoning behind the choices made, categories the liability as potential and therefore only includes appropriate disclosure in the Notes.
In relation, finally, to the extraordinary administration of Alitalia, the Group assessed the potential liability related to the revocation of receivables arising in the six months before the procedure, for an amount of Euro 1.49 million, net of municipal surtaxes. At the preparation date of this document, taking account of the information noted and the defensive arguments arising in the case in which this request is advanced,
Aeroporto Guglielmo Marconi di Bologna S.p.A. 109
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
the Directors considered it appropriate to provide disclosure in the Notes, without making any accrual, although while at the same time continuing to closely monitor the airline's situation.
The following table breaks down non-current financial liabilities at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | |
|---|---|---|---|
| Bank loans – non-current | 14,690 | 19,109 | (4,419) |
| NON-CURRENT FINANCIAL LIABILIITES | 14,690 | 19,109 | (4,419) |
At December 31, 2018 the account comprises the non-current part of the loans or rather the medium/longterm portion of the loans undertaken by the Group and in place at this date. The decrease in the year is mainly due to repayments totalling Euro 5.8 million.
Total bank loans at December 31, 2018 amount to Euro 19.1 million, of which Euro 14.7 million non-current and Euro 4.4 million current (note 23).
The breakdown (by calendar year) of loans including the current portion was as follows:
The Parent Company must comply with the following economic/financial covenants calculated annually on its financial statements:
The contractual conditions of the loans in place at December 31, 2018 are illustrated below:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 110
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
| Credit Institution | Type of loan | Interest rate applied | Rate | Maturity | Covenant |
|---|---|---|---|---|---|
| Intesa San Paolo S.p.A | |||||
| (former Banca OPI S.p.A) | Loan | Rate applied by EIB to the Bank + 0.45% | Half-Year | 2019 | No |
| Intesa San Paolo S.p.A. | Loan | Fixed rate until 10/4/2017 of 3.693%; from 11/04 to 10/06/2017 of 3.3%; from 11/06/2017 to 10/06/2024 of 3% |
Half-Year | 2024 | Yes |
| Monte dei Paschi di Siena (former Banca Agricola Mantovana) |
Loan | Euribor variable 3 Months + spread 0.9% | Quarterly | 2026 | No |
The loans are not covered by secured guarantees.
| In thousands of Euro | ||||||
|---|---|---|---|---|---|---|
| Credit Institution | Type of loan | Interest rate applied | Balance 31.12.2018 |
Interest balance for year |
Sensitivity Analysis (+0.5%) |
Sensitivity Analysis (-0,1%) |
| Intesa Sanpaolo S.p.A (former Banca OPI S.p.A) |
Banking | rate applied by EIB to the Bank + 0.45% |
1,379 | 15 | 32 | 12 |
| Monte dei Paschi di Siena (former Banca Agricola Mantovana) |
Banking | euribor 3 months/360 + 0.9% |
3,766 | 23 | 44 | 19 |
With reference to the cross-default clauses on the loan contracts of the Company, these include both clauses where the benefits are no longer applicable and where the Company financed is not in compliance with obligations of a credit or financial nature, or guarantees assumed with any party. We report that at December 31, 2018 the Company has not received any communication for application of cross default clauses by any of its lenders.
We illustrate below the table required by the amended IAS 7 - Cash Flow Statement for a greater disclosure of changes in financial liabilities:
| in thousands of Euro Bank loans |
|
|---|---|
| Balance as at 31 12 2017 | 24,916 |
| Cash flows | (5,822) |
| Other changes: | |
| Financial charges IAS 39 | 29 |
| Balance 31 12 2018 | 19,123 |
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| TRADE PAYABLES | 19,011 | 16,208 | 2,803 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 111
The payables mainly refer to domestic suppliers and report an increase of Euro 2.8 million due to the increase in outsourcing costs and investments.
The table below shows the breakdown of trade payables at December 31, 2018 and December 31, 2017 by due date:
| in thousands of Euro | Not yet due |
Overdue | Total as at 31.12.2018 |
|
|---|---|---|---|---|
| Invoices/credit notes received | 7,149 | 1,785 | 8,934 | |
| Invoices/credit notes to be received | 10,077 | 0 | 10,077 | |
| TOTAL TRADE PAYABLES | 17,226 | 1,785 | 19,011 |
| in thousands of Euro | Not yet due |
Overdue 0-30 | Overdue 30- 60 |
Overdue 60-90 |
Overdue beyond 90 |
Total |
|---|---|---|---|---|---|---|
| TRADE PAYABLES | 7,149 | 1,401 | 109 | 4 | 270 | 8,934 |
| in thousands of Euro | Not yet due |
Overdue | Total as at 31.12.2017 |
|
|---|---|---|---|---|
| Invoices/credit notes received | ||||
| Invoices/credit notes to be received | 7,285 5,970 |
2,953 0 |
10,238 5,970 |
|
| TOTAL TRADE PAYABLES | 13,256 | 2,953 | 16,208 |
| in thousands of Euro | Not yet due |
Overdue 0-30 | Overdue 30- 60 |
Overdue 60-90 |
Overdue beyond 90 |
Total |
|---|---|---|---|---|---|---|
| TRADE PAYABLES | 7,285 | 2,505 | 40 | 1 | 407 | 10,238 |
The following table breaks down current liabilities at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Current tax payables | 2,123 | 1,671 | 452 |
| Employee payables and social security institutions | 4,113 | 4,034 | 79 |
| 15,710 | 14,556 | 1,154 | |
| ENAC concession fee and other State payables | 4,421 | 3,913 | 508 |
| Other current liabilities, accrued liabilities and deferred income | |||
| TOTAL OTHER CURRENT LIABILITIES | 26,367 | 24,174 | 2,193 |
The principal changes were as follows:
The following table breaks down tax payables at December 31, 2018 (compared with December 31, 2017).
Aeroporto Guglielmo Marconi di Bologna S.p.A. 112
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| VAT payable | 278 | 0 | 278 |
| Direct income taxes | 808 | 762 | 46 |
| Other tax payables | 1,037 | 909 | 128 |
| TOTAL CURRENT TAX PAYABLES | 2,123 | 1,671 | 452 |
In addition to the VAT payable, compared to the receivable reported at December 31, 2017, the increase in this account is mainly due to the higher payables for employee withholding taxes.
The following table breaks down employee payables and social security institutions at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | Change | |
|---|---|---|---|
| Employee payables for remuneration | 1,162 | 921 | 241 |
| Employee deferred compensation | 1,830 | 2,069 | (239) |
| Social security payables | 1,121 | 1,044 | 77 |
| EMPLOYEE PAYABLES AND SOCIAL SECURITY INSTITUTIONS | 4,113 | 4,034 | 79 |
The ENAC concession fees and other State payables mainly comprises:
The following table breaks down current liabilities, accrued liabilities and deferred income December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Municipal surtax payable | 3,449 | 2,811 | 638 |
| Other current liabilities | 910 | 986 | (76) |
| Current accrued liabilities and deferred income | 62 | 116 | (54) |
| TOTAL OTHER CURRENT LIABILITIES, ACCRUED LIABILITIES AND DEFERRED INCOME | 4,421 | 3,913 | 508 |
The main account concerns the municipal surtax relating to the receivables from carriers not yet received at December 31 for Euro 3.4 million. The portion of the municipality surtax payable relating to receivables collected from carriers, not yet paid to the creditor entities on the other hand is classified under current financial liabilities (Note 23). Other current liabilities include deposits and advances received from customers in addition to deferred income and miscellaneous payables.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 113
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The following table shows the movement of the provision for renewal of airport infrastructure at December 31, 2018.
| in thousands of Euro | As at 31.12.2017 |
Provisions | Uses | Reclassifications | As at 31.12.2018 |
|---|---|---|---|---|---|
| PROVISIONS FOR RENEWAL OF AIRPORT INFRASTRUCTURE (CURRENT) | 3,498 | 0 | (3,498) | 1,757 | 1,757 |
Reference should be made to Note 16 for further information on this provision.
The changes in the current provision for risks and charges in the year are reported below:
| in thousands of Euro | As at 31.12.2017 |
Provisions | Other increases | As at 31.12.2018 |
|---|---|---|---|---|
| Employee back-dated provision | 0 | 0 | 526 | 526 |
| PROVISIONS FOR RISKS AND CHARGES (CURRENT) | 0 | 0 | 526 | 526 |
The increase concerns the reclassification into this account of the employee provisions classified under non-current provisions (Note 17) until December 31, 2017, as the closure of the trade union contract increases is expected in 2019.
The following table breaks down current financial liabilities at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Bank loans – current | 4,433 | 5,807 | (1,374) |
| Municipal surtax payables | 2,050 | 1,806 | 244 |
| Other current financial debt | 43 | 54 | (11) |
| CURRENT FINANCIAL LIABILITIES | 6,526 | 7,667 | (1,141) |
For a breakdown of the Loans - current portion and other financial payables, reference should be made to account 18 Non-current Financial Liabilities which presents the outstanding Group loans at December 31, 2018 and the changes in the year.
The account includes boarding fee municipal surtax payables concerning the portion received by airlines in the month of December and reversed to the credit institutions in January.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 114
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The principal 2018 income statement accounts are compared with 2017 below.
The application of the new accounting standard IFRS 15, applied to all contracts with customers since January 1, 2018, resulted in the identification of the following revenue streams:
Airport fees concern the fees paid for the making available of infrastructure and services exclusively provided by the Group for landing, take-off, lighting and parking, passenger boarding, disembarkation and information and cargo, in addition to the use of centralised infrastructure.
These comprise:
For further details, reference should be made to the description of the business in the Directors' Report. The Airport Fees, in consideration of the public utility nature of the airport services, are subject to regulation in compliance with current legislation and the tariff models elaborated by the Airport Regulatory Authority ("ART").
The Group complies with its obligations in relation to airport fees, making available to carriers airport infrastructure for the landing, take off, lighting and parking of aircraft, the departure and embarkment of passengers and goods as well as the utilisation of centralised infrastructure (e.g. de-icing). These services are invoiced bi-monthly and/or monthly with standard payment terms of 30 days from invoice date end of month, with the exception of the boarding fee municipal surtax whose payment is on demand.
Commercial and non-commercial sub-license/leasing revenues concerns the provision of spaces and commercial areas and premises within the airport area (so-called sub-licenses) and externally to the airport area (so-called leasing).
This category includes sub-license/leasing with commercial tariffs (retail sub-licenses, parking sub-licenses etc.) and administrated tariffs (payments for the exclusive use of assets or payments for the use of a dedicated airport infrastructure to the individual carriers or operators (check-in counters, offices, operating premises).
The Group complies with its obligations in relation to these services making available to its customers (carriers, handlers, others) operating and/or commercial premises. Invoicing is normally quarterly and/or half-yearly in advance with standard payment terms on these contracts of 30 days from invoice date end of month.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 115
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The sub-license contracts between the Group and its customers are within the definition of IAS 17 - Leasing and are therefore excluded from the application of IFRS 15 (reference IFR15.5). From January 1, 2019, these contracts will therefore fall within the scope of IFRS 16 which replaces IAS 17.
The application of the new standard is therefore centred on verification that the sub-license contracts principally involve the leasing of well-defined spaces/premises, and not including other services such as advertising and administration/utility services within the definitions contained in IFRS 15. In this case a reclassification was made in the financial statements for Revenue Streams within the scope of IFRS 15.
Parking revenues are represented by the provision of parking spaces internally and externally to the airport area based on public tariffs which are applied to all sales made.
The Group complies with its obligations in relation to these services making available to its customers parking facilities. Invoicing of this service is only made on the request of the customer; the parking service is normally settled in cash. There were no effects from the application of IFRS 15.
Revenues from Construction Services concern the construction services undertaken by the Group on behalf of the Granting Body for the investments concerning the Concession Rights. The Group, as not a construction company, contracts with third parties responsible for constructing and improving the infrastructure. Accordingly, the fair value of the fees for the construction/improvement services rendered by the Group is the fair value of the fees for the construction/improvement service rendered by third parties, plus a "Project Management" mark-up representative of the internal costs of planning and coordination of the work by a specific internal unit. The application of IFRS 15 did not result in any change in the recognition of revenues from construction service.
Other revenues: this revenue stream concerns the residual obligations compared to the previous contractual categories (security services, MBL services, training courses, cart collection services, baggage depot services, etc.). The invoicing of the various services in this category is normally aggregated monthly for continual services and/or individual orders. Some services also provide for immediate invoicing. The standard payment terms of these services are 30 days from invoice date end of month. For some types of services (training courses, badge issuance), advanced payment is requested.
In summary, in addition to that illustrated above, the analysis of the contracts and the aggregation of revenue accounts in accordance with the new revenue streams requiring separation of the payments underlying various contractual obligations, identified the following effects:
In relation to contracts which provide for variable payments we report as follows: the commercial incentive contracts with carriers recorded as a decrease of airport fee revenues may provide for variable payments related to the achievement of traffic volumes and/or number of routes in the period (typically measured based on IATA seasons). From 2018 also the "one-off" promotional incentives, such as incentives for the start-up of new flights, up to now recorded under service costs, are recorded as a direct reduction
Aeroporto Guglielmo Marconi di Bologna S.p.A. 116
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
of airport fee revenues, as already applied for the variable incentives recognised based on traffic. In the year 2018 this amounted to Euro 83 thousand compared to Euro 142 thousand in 2017.
The reclassification of Group revenues based on revenue streams defined by IFRS 15 is shown in the following table:
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Airport fees | 49,742 | 46,316 | 3,426 |
| Parking | 15,946 | 15,095 | 851 |
| Revenues from Construction services | 15,650 | 6,735 | 8,915 |
| Others | 11,091 | 11,136 | (45) |
| TOTAL IFRS 15 REVENUE STREAMS | 92,429 | 79,282 | 13,147 |
The reconciliation between IFRS 15 revenue streams and total revenues (note 24 of the Income Statement) is shown in the following table:
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Airport fees | 49,742 | 46,316 | 3,426 |
| Parking | 15,946 | 15,095 | 851 |
| Revenues from Construction services | 15,650 | 6,735 | 8,915 |
| Other | 11,091 | 11,136 | (45) |
| TOTAL IFRS 15 REVENUE STREAMS | 92,429 | 79,282 | 13,147 |
| Commercial/non-comm. sub-licenses | 21,528 | 19,731 | 1,797 |
| TOTAL NON IFRS 15 REVENUE STREAMS | 21,528 | 19,731 | 1,797 |
| TOTAL NON IFRS 15 Revenues | 135 | 133 | 2 |
| TOTAL REVENUES | 114,092 | 99,146 | 14,946 |
IFRS 15 revenue streams related to the changes in the receivables/collections in the period is illustrated below.
| in thousands of Euro | receivables as at 31.12.2017 |
Revenues (*) | Collections/ off set |
receivables as at 31.12.2018 |
|---|---|---|---|---|
| Airport fees (*) | 7,069 | 51,367 | (49,683) | 8,753 |
| Parking | 75 | 19,430 | (19,437) | 68 |
| Revenues from Construction services | 0 | 15,650 | (15,650) | 0 |
| Other | 1,524 | 12,064 | (12,036) | 1,552 |
| TOTAL IFRS 15 REVENUE STREAMS | 8,667 | 98,511 | (96,805) | 10,373 |
(*) The data included in the column "Revenues" differs from the Revenues shown in the previous table as this includes VAT, but not the accruals for the period (e.g. credit notes to be received for incentives, invoices to be issued).
Finally, the tables below show the revenues by revenue stream (note 24 of the Income Statement) for 2018 and 2017.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 117
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Revenues from aeronautical services | 56,342 | 53,212 | 3,130 |
| Revenues from non-aeronautical services | 41,160 | 38,222 | 2,938 |
| Revenues from construction services | 15,650 | 6,735 | 8,915 |
| Other operating revenues and income | 940 | 977 | (37) |
| TOTAL REVENUES | 114,092 | 99,146 | 14,946 |
For the revenue performance in the period, reference should be made to the Directors' Report.
The table below shows revenues from aeronautical services in 2018 and 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Revenues from centralised infrastructure/other airport services | 534 | 555 | (21) |
| Exclusive use revenues | 1,255 | 1,228 | 27 |
| Airport fee revenues | 68,469 | 65,446 | 3,023 |
| PRM revenues | 4,466 | 4,291 | 175 |
| Air traffic development incentives | (23,389) | (23,575) | 186 |
| Handling services | 2,464 | 2,846 | (382) |
| Other aeronautical revenues | 2,543 | 2,421 | 122 |
| TOTAL REVENUES FROM AERONAUTICAL SERVICES | 56,342 | 53,212 | 3,130 |
The increase in revenues from aeronautical services is mainly due to the increase in traffic and the tariff update.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Passenger boarding fees | 34,437 | 33,182 | 1,255 |
| Landing, take-off and parking fees | 18,756 | 18,272 | 484 |
| Passenger security fees | 11,238 | 10,472 | 766 |
| Baggage stowage control fees | 3,190 | 2,942 | 248 |
| Cargo loading and unloading fees | 810 | 837 | (27) |
| Reduction for provision | 38 | (259) | 297 |
| TOTAL AVIATION FEE REVENUES | 68,469 | 65,446 | 3,023 |
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Commercial premises and spaces sub-license | 18,457 | 17,158 | 1,299 |
| Reduction in sub-license revenues to Provisions for doubtful accounts | 0 | (52) | 52 |
| Parking | 15,946 | 15,095 | 851 |
| Other commercial revenues | 6,757 | 6,021 | 736 |
| TOTAL REVENUES FROM NON-AERONAUTICAL SERVICES | 41,160 | 38,222 | 2,938 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 118
The revenues from non-aeronautical services report an increase related to the good performance of all the components in this category and, in particular, of the commercial premises and spaces sub-licenses, parking, MBL services and advertising services.
Other commercial revenues are broken down as follows:
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Ticketing | 40 | 44 | (4) |
| Marconi Business Lounge | 2,539 | 2,280 | 259 |
| Advertising | 1,942 | 1,397 | 545 |
| Misc. commercial revenues | 2,236 | 2,301 | (65) |
| Reduction in commercial revenues to Provision for doubtful accounts | 0 | (1) | 1 |
| TOTAL OTHER COMMERCIAL REVENUES | 6,757 | 6,021 | 736 |
Revenues from construction services concern the construction services undertaken by Aeroporto Guglielmo Marconi di Bologna S.p.A. on behalf of the ENAC granting entity for the capital investments previously commented upon in relation to the Concession Rights in Note 1.
These revenues amounted to Euro 15.65 million in 2018 and Euro 6.7 million in 2017.
The table below shows other revenues and income in 2018 and 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Indemnities, reimbursement and misc. income | 922 | 910 | 12 |
| Operating grants | 16 | 48 | (32) |
| Capital gains | 2 | 19 | (17) |
| TOTAL OTHER REVENUES AND INCOME | 940 | 977 | (37) |
Other revenues and income do not report significant changes compared to the previous year.
The table below presents consumables and goods in 2018 and 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Consumables and goods | 474 | 493 | (19) |
| Maintenance materials | 210 | 191 | 19 |
| Fuel and gasoline | 1,268 | 1,168 | 100 |
| TOTAL CONSUMABLES AND GOODS | 1,952 | 1,852 | 100 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 119
This item increased mainly due to higher purchases of aviation fuel.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Maintenance expenses | 4,658 | 4,206 | 452 |
| Utilities | 2,168 | 1,834 | 334 |
| Cleaning and accessory services | 2,111 | 1,949 | 162 |
| Services | 6,439 | 5,848 | 591 |
| 343 | 301 | 42 | |
| MBL Services | 694 | 919 | (225) |
| Advertising, promotion and development | |||
| Insurance | 737 | 713 | 24 |
| Professional and consultant services | 1,917 | 2,014 | (97) |
| Statutory board fees and expenses | 570 | 553 | 17 |
| Other service costs | 393 | 357 | 36 |
| TOTAL SERVICE COSTS | 20,030 | 18,694 | 1,336 |
The following table shows the breakdown of services costs for 2018 and 2017.
Total service costs increased mainly due to higher charges for:
The savings in advertising, promotion and development (Euro 225 thousand) reduced to Euro 83 thousand, taking into account the one-off traffic development charges incurred in 2017 which, in accordance with the new accounting standard IFRS 15, from January 1, 2018 are recorded as a decrease in aeronautical revenues.
A further breakdown in maintenance expenses is provided below:
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Owned asset maintenance expenses | 1,064 | 1,017 | 47 |
| Airport infrastructure maintenance expenses | 3,033 | 2,731 | 302 |
| Third party asset maintenance expenses | 561 | 458 | 103 |
| TOTAL MAINTENANCE EXPENSES | 4,658 | 4,206 | 452 |
The breakdown of services is illustrated below:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 120
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Snow clearance | 965 | 441 | 524 |
| Porterage, transport third party services | 587 | 423 | 164 |
| PRM assistance service | 1,574 | 1,512 | 62 |
| De-icing and other public service charges | 318 | 355 | (37) |
| Security service | 1,168 | 1,211 | (43) |
| Other outsourcing | 1,827 | 1,906 | (79) |
| TOTAL SERVICES | 6,439 | 5,848 | 591 |
In relation to the disclosures required by Article 38, paragraph 1, letter o) of Legislative Decree 127/91 we report that in 2018 there was no remuneration paid to directors and statutory auditors of the Parent Company for the undertaking of these functions also in subsidiary companies.
The table below reports the fees paid to the Board of Statutory Auditors and the Independent Audit Firm:
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Statutory auditors' fees | 157 | 150 | 7 |
| Independent auditors' fees | 165 | 217 | (52) |
| Total | 322 | 367 | (45) |
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Audit | 99 | 93 | 6 |
| Certification work | 6 | 5 | 1 |
| Other services (*) | 60 | 118 | (59) |
| Total | 165 | 217 | (52) |
(*) IFRS assistance and accounting certification
Construction service costs concern the construction costs incurred by Aeroporto Guglielmo Marconi di Bologna S.p.A. Group for the capital investments previously commented upon in relation to the Concession Rights in Note 1.
The following table shows the breakdown of leases, rentals and other costs for 2018 and 2017.
| for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|
| 5,979 | 5,658 | 321 |
| 336 | 401 | (65) |
| 568 | 541 | 27 |
| 1,265 | 1,098 | 167 |
| (25) | (30) | 5 |
| 8,123 | 7,668 | 455 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 121
Total Rental, hire and similar costs recorded an increase in variable airport concession fees and security services, an increase related to the rise in traffic, in addition to higher fees for data elaboration for the new investments in technology.
The following table shows the breakdown of other operating expenses for 2018 and 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Misc. and local taxes | 1,361 | 1,307 | 54 |
| Fire prevention services contribution | 1,374 | 1,403 | (29) |
| Losses on receivables | 0 | 0 | 0 |
| Capital losses | 3 | 48 | (45) |
| Other operating expenses | 472 | 389 | 83 |
| Non-recurring charges and income | 0 | 318 | (318) |
| TOTAL OTHER OPERATING EXPENSES | 3,210 | 3,465 | 63 |
Operating expenses decreased due to the absence of accessory charges on the exercise of the option to acquire a building, which was acquired in 2017.
The following table shows the breakdown of personnel costs for 2018 and 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Wages and salaries | 18,830 | 18,354 | 476 |
| Social security expenses | 5,170 | 4,923 | 247 |
| Severance provisions | 1,372 | 1,324 | 48 |
| Retirement pension and others | 191 | 191 | 0 |
| Other personnel costs | 1,591 | 2,040 | (449) |
| TOTAL PERSONNEL COSTS | 27,154 | 26,832 | 322 |
Personnel costs increased mainly due to the increase in the workforce (+16 full-time equivalent), largely deriving from the hiring of security and operating area personnel in line with the increase in traffic, in addition to normal salary increases.
| in thousands of Euro | for the year ended 31.12.2018 | for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Employee canteen | 587 | 569 | 18 |
| Personnel training | 249 | 284 | (35) |
| Employee expenses | 270 | 259 | 11 |
| Other personnel provisions | 79 | 91 | (12) |
| Misc. personnel costs | 406 | 837 | (431) |
| TOTAL OTHER PERSONNEL COSTS | 1,591 | 2,040 | (449) |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 122
The decrease in "other personnel expenses" is mainly due to lower employee leaving incentives.
| Average workforce (No.) | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Executives | 10 | 10 | 0 |
| White-collar | 403 | 386 | 17 |
| Blue-collar | 102 | 96 | 6 |
| TOTAL PERSONNEL | 515 | 492 | 23 |
The average headcount by category in the two periods under consideration is shown below:
The headcount at the end of the two years under consideration was as follows:
| Workforce (number) | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Executives | 10 | 9 | 1 |
| White-collar | 417 | 384 | 33 |
| Blue-collar | 101 | 79 | 22 |
| TOTAL PERSONNEL | 528 | 472 | 56 |
The following table shows the movement of depreciation, amortisation and impairment for the periods ended December 31, 2018 and 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Amortisation/write-downs Concession rights | 5,857 | 5,749 | 108 |
| Amortisation/write-down of other intangible assets | 1,323 | 989 | 334 |
| Depreciation of tangible assets | 2,219 | 2,085 | 134 |
| TOTAL DEPRECIATION AND AMORTISATION | 9,399 | 8,823 | 576 |
The account includes Euro 9.4 million of depreciation and amortisation of which Euro 97 thousand of writedowns on Concession Rights for the write-off of projects no longer utilisable.
The following table shows the movement of the provisions for risks and charges in 2018 and 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Provisions for doubtful accounts | 64 | (12) | 76 |
| Provisions for renewal of airport infrastructure | 3,752 | 2,544 | 1,208 |
| Provisions for other risks and charges | 291 | 240 | 51 |
| TOTAL PROVISIONS | 4,107 | 2,772 | 1,335 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 123
The increase is due to higher provision for renewal of airport infrastructure due to the increase in interventions undertaken and scheduled in advance of some works airside. Finally, the provision for other risks and charges primarily concerns amounts due to employees following the expiry of the Collective Bargaining Agreement for airport managers and of the agreement with Assohandlers, respectively on December 31, 2016 and June 30, 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Profits on sale of equity investments | 13 | 0 | 13 |
| Income from securities | 25 | 38 | (13) |
| Other income | 153 | 236 | (83) |
| Discounting income on provisions | 193 | 0 | 193 |
| TOTAL FINANCIAL INCOME | 384 | 274 | 110 |
| Interest expenses and bank charges | (520) | (661) | 141 |
| Discounting charges on provisions | (89) | (159) | 70 |
| Other financial expenses | (11) | (32) | 21 |
| TOTAL FINANCIAL EXPENSES | (620) | (852) | 232 |
| TOTAL FINANCIAL INCOME AND EXPENSES | (236) | (578) | 342 |
The financial management improved due to the increase in financial income and decrease in financial charges. The former increase derives from the change in interest rates which resulted in an increase in income from discounting of provisions and the decrease in the relative charges. In addition, we report the decrease in financial expenses due to both lower overall debt and the reduction in the interest rate on the Intesa San Paolo loan which matures in 2024.
The following table shows the taxes for the periods 2018 and 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Current taxes | 6,614 | 5,262 | 1,352 |
| Deferred tax assets and liabilities | 435 | 603 | (168) |
| TOTAL INCOME TAXES FOR THE YEAR | 7,049 | 5,865 | 1,184 |
| % current taxes on results before taxes | 26.48% | 23.87% | 2.62% |
| % income taxes for the year on results before taxes | 28.22% | 26.60% | 1.62% |
The effective tax rate for the year 2018 was 28.22% compared to 26.60% in 2017. This decrease is mainly due to the omission, in the Parent Company, of income from the utilisation of the R&D tax credits as the focus was on projects which would increase the performance of the IT infrastructure and on the consolidation of the activities already commenced. The objective taking into account also the Investment Plan is to continue the research and development activities in 2019 and 2020.
The reconciliation between the IRES effective and theoretical tax rate is illustrated below:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 124
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
| IRES effective/theoretical Tax Rate Reconciliation | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Pre-tax result | 24,977 | 22,048 | 2,927 |
| Ordinary rate | 24% | 24% | 0.00% |
| Theoretical tax charge | 5,994 | 5,292 | 702 |
| Effect of increases (decreases) to the ordinary rate: | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
|
|---|---|---|---|
| Provisions deductible in future years | 393 | 470 | (77) |
| Costs deductible in future years | 3,015 | 2,736 | 279 |
| Other Costs deductible in previous years | 57 | 31 | 26 |
| Other non-deductible costs | 985 | 1,131 | (146) |
| Utilisation provisions deductible in future years | (636) | (624) | (12) |
| Costs not deductible in previous years | (3,463) | (3,560) | 97 |
| Other differences | (2,473) | (2,304) | (169) |
| Release deferred tax assets/Provision deferred tax liability | (218) | (249) | 31 |
| Total increase/decrease | (2,340) | (2,369) | 29 |
| Tax effect of the changes at 24% | (562) | (569) | 7 |
| IRES Income taxes | 5,433 | 4,723 | 709 |
| Effective rate | 21.75% | 21.42% | 0.33% |
The breakdown of current income taxes is illustrated below:
| Breakdown of income taxes | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| IRES | 5,433 | 4,723 | 710 |
| IRAP | 1,182 | 1,079 | 103 |
| Income for R&D bonus and Energy saving | 0 | (256) | 256 |
| Prior year taxes | (1) | (284) | 283 |
| TOTAL | 6,614 | 5,262 | 1,352 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 125
For the definition of "Related Parties", reference should be made to IAS 24, approved by Regulation (EC) No. 1725/2003.
Intercompany transactions are carried out within the scope of ordinary operations and at normal market conditions. Related party transactions principally concern commercial and financial transactions, in addition to participation in the tax consolidation.
None of these have particular economic or strategic significance for the Group, as the receivables, payables, revenues and costs regarding related parties do not account for a significant percentage of the total financial statement amounts.
The Bologna Chamber of Commerce shareholders were identified as a Government party, therefore exempt from the disclosure regarding related parties as defined by IAS 24. The categorisation of the Bologna Chamber of Commerce as a Government party therefore limited the checks required for the identification of related parties to the mere identification of the Bologna Chamber of Commerce. No additional information is reported in the financial statements concerning transactions undertaken by the Group with the Bologna Chamber of Commerce as no significant transactions are undertaken with this shareholder.
On January 29, 2018, with the co-optation of the director Livio Fenati, ratified by the Shareholders' Meeting of April 24, 2018, Telepass Spa became a related party until September 26, 2018, the date of his resignation. During the year, costs were reported for services regarding Telepass of Euro 109 thousand, related to the contract for the management of Telepass parking receipts.
In addition, we report the inter-company transactions for which reference should be made to the section "related party transactions" in the Financial Statements of the Parent Company.
At December 31, 2018, the Group had an operating lease contract, irrevocable as per IAS 17 for equipment, plant and machinery, vehicles and land, for which the instalments maturing in 2019, in the subsequent five years and beyond this period are detailed below.
| In thousands of Euro | |
|---|---|
| Within 2019 | 616 |
| Beyond one year but within 5 years (2020-2024) | 1,911 |
| Beyond 5 years (2025 and subsequent) | 0 |
| Total | 2,527 |
At December 31, 2018, the Group had sub-concession contracts for areas, offices and operating and commercial spaces at the passengers and goods terminal and for other airport infrastructure, as outlined in detail in chapter 2 of the Directors' Report. The following table presents the minimum future fees of the contracts irrevocable in accordance with IAS 17 December 31, 2018 and maturing in 2019, in the subsequent five years and beyond this period. The amounts indicated below were not considered variable fees nor sub-concession contracts at administered tariffs as subject to potential tariff changes, including reductions.
| in thousands of Euro | |
|---|---|
| Within 2019 | 10,316 |
| Beyond one year but within 5 years (2020-2024) | 20,215 |
| Beyond 5 years (2025 and subsequent) | 333 |
| Total | 30,864 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 126
In addition, the environmental commitments of the Group were formalised with the signing by the Parent Company in 2015 with the Regional Agencies of the Regional Agreement for reducing the Airport's carbon footprint, involving investments by AdB totalling Euro 6.5 million over a time period consistent with the timeframe for the rolling out of the airport Master Plan or rather by 2023. In 2018, the air quality monitoring system installation was completed and the relative technical testing carried out, which now permits the system to operate continuously. For further information, reference should be made to the Environment paragraph of the Directors' Report.
Tangible fixed assets in progress December 31, 2018 (note 2) include for Euro 1.78 million the first two tranches of the contributions granted by AdB to Marconi Express Spa for the construction of the People Mover "Airport" station following completion of 66% of the airport area works. The overall contribution of the Parent Company amounts to Euro 2.7 million, with the final tranche of Euro 0.92 million earmarked for testing purposes. Under the same agreement (signed by AdB, the Municipality of Bologna, the Province of Bologna and the Region of Emilia-Romagna on July 23, 2007), AdB committed to completing the connection between the "Airport" and the Terminal. Against this commitment, tangible assets in progress at December 31, 2018 includes engineering and other accessory works of Euro 0.68 million.
Non-current financial assets December 31, 2018 include Euro 10.9 million of the equity financial instrument in Marconi Express Spa, signed by AdB in January 2016 for a similar value. The final tranche of Euro 0.9 million was paid in December 2018 on works completion.
With regards to the guarantees provided, reference should be made to the relevant chapter of the Directors' Report (Chapter 12).
With regards to the disclosure concerning the types and means of financial risk management under Article 2428, paragraph 2 No. 6 bis, reference should be made to the specific section of the Directors' Report, also with regards to the comment upon the other risks to which the Group is subject.
The Group received in 2018 total grants of Euro 9.75 thousand for the training of employees as per Article 1, paragraph 125 of Law 124/2017.
No events have occurred subsequent to year end that would require changes in terms of the presented performance or equity and financial position and that would therefore necessitate adjustments and/or additional disclosures in the financial statements.
The Chairman of the Board of Directors
(Enrico Postacchini)
Bologna, March 14, 2019
Aeroporto Guglielmo Marconi di Bologna S.p.A. 127
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
Declaration of the Chief Executive Officer and the officer responsible for the preparation of the corporate accounting documents of Aeroporto Guglielmo Marconi di Bologna S.p.A. pursuant to the provision of article 154-bis paragraph 5 TUF (Testo Unico Finanziario [Consolidated Law on Financial Intermediation] –
Bologna, 14 March 2019
The Chief Executive Officer Officer in charge of preparing the corporate accounting documents
(Nazareno Ventola) (Patrizia Muffato)
Aeroporto Guglielmo Marconi di Bologna S.p.A. 128
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
EY S.p.A. Via Massimo D'Azeglio, 34 40123 Bologna
Tel: +39 051 278311 Fax: +39 051 236666 ey.com
To the Shareholders of Aeroporto Guglielmo Marconi di Bologna S.p.A.
We have audited the consolidated financial statements of Aeroporto Guglielmo Marconi di Bologna S.p.A. and its subsidiaries (the "Group" or "Aeroporto Guglielmo Marconi di Bologna Group"), which comprise the statement of financial position as at December 31, 2018, the income statement, the statement of comprehensive income, the cash flow statement, statement of changes in shareholders' equity for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as at December 31, 2018, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and with the regulations issued for implementing article 9 of Legislative Decree n. 38/2005.
We conducted our audit in accordance with International Standards on Auditing (ISA Italia). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of Aeroporto Guglielmo Marconi di Bologna S.p.A. in accordance with the regulations and standards on ethics and independence applicable to audits of financial statements under Italian Laws. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
We identified the following key audit matter.
The provisions for renewal of airport infrastructure accounted for in the consolidated financial statements as of December 31, 2018 amounts to Euro 12,1 million and includes accruals for non-recurring maintenance expenses, as well as estimated future costs for restoration and replacement of assets under concession that the Group plans to incur in accordance with the current concession agreements.
The processes and methodologies applied to evaluate and determine such estimated future costs are based on complex assumptions that, due to their nature, imply the use of management's judgment, in particular with reference to the nature, timing and amount of the maintenance costs, including the relevant financial component applied based on the timing of such maintenance services.
Considering the judgment required by management in order to evaluate the nature, timing and amount of such maintenance services, we believe that the valuation of the provisions for renewal of airport infrastructure represents a key audit matter.
The disclosures relating to the valuation of the provisions for renewal of airport infrastructure are included in section "Measurement Criteria" under paragraph "Provisions for risks and charges", as well as in notes 16 and 21 "Provisions for renewal of airport infrastructure".
Our audit procedures performed in response to this Key Audit Matter included, among others:
Lastly, we reviewed the adequacy of the disclosures provided in the notes to the consolidated financial statements in relation to the valuation of provisions for renewal of airport infrastructure.
The Directors are responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union and with the regulations issued for implementing article 9 of Legislative Decree n. 38/2005, and, within the terms provided by the law, for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
The Directors are responsible for assessing the Group's ability to continue as a going concern and,
when preparing the consolidated financial statements, for the appropriateness of the going concern assumption, and for appropriate disclosure thereof. The Directors prepare the consolidated financial statements on a going concern basis unless they either intend to liquidate the Parent Company Aeroporto Guglielmo Marconi di Bologna S.p.A. or to cease operations, or have no realistic alternative but to do so.
The statutory audit committee ("Collegio Sindacale") is responsible, within the terms provided by the law, for overseeing the Group's financial reporting process.
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing (ISA Italia) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with International Standards on Auditing (ISA Italia), we have exercised professional judgment and maintained professional skepticism throughout the audit. In addition:
We have communicated with those charged with governance, identified at an appropriate level as required by ISA Italia, regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We have provided those charged with governance with a statement that we have complied with the ethical and independence requirements applicable in Italy, and we have communicated with them all matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we have determined those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We have described these matters in our auditor's report.
The shareholders of Aeroporto Guglielmo Marconi di Bologna S.p.A., in the general meeting held on May 20, 2015, engaged us to perform the audits of the consolidated financial statements for each of the years ending December 31, 2015 to December 31, 2023.
We declare that we have not provided prohibited non-audit services, referred to article 5, paragraph 1, of EU Regulation n. 537/2014, and that we have remained independent of the Group in conducting the audit.
We confirm that the opinion on the consolidated financial statements included in this report is consistent with the content of the additional report to the audit committee (Collegio Sindacale) in their capacity as audit committee, prepared pursuant to article 11 of the EU Regulation n. 537/2014.
The Directors of Aeroporto Guglielmo Marconi di Bologna S.p.A. are responsible for the preparation of the Directors' Report and of the Report on Corporate Governance and Ownership Structure of Aeroporto Guglielmo Marconi di Bologna Group as at December 31, 2018, including their consistency with the related consolidated financial statements and their compliance with the applicable laws and regulations.
We have performed the procedures required under audit standard SA Italia n. 720B, in order to express an opinion on the consistency of the Directors' Report and of specific information included in the Report on Corporate Governance and Ownership Structure as provided for by article 123-bis, paragraph 4, of Legislative Decree n. 58, dated February 24, 1998, with the consolidated financial statements of Aeroporto Guglielmo Marconi di Bologna Group as at December 31, 2018 and on their compliance with the applicable laws and regulations, and in order to assess whether they contain material misstatements.
In our opinion, the Directors' Report and the above mentioned specific information included in the
Report on Corporate Governance and Ownership Structure are consistent with the consolidated financial statements of Aeroporto Guglielmo Marconi di Bologna Group as at December 31, 2018 and comply with the applicable laws and regulations.
With reference to the statement required by article 14, paragraph 2, subparagraph e), of Legislative Decree n. 39, dated January 27, 2010, based on our knowledge and understanding of the entity and its environment obtained through our audit, we have no matters to report.
The Directors of Aeroporto Guglielmo Marconi di Bologna S.p.A. are responsible for the preparation of the non-financial information pursuant to Legislative Decree n. 254, dated 30 December 2016. We have verified that non-financial information has been approved by Directors.
Pursuant to article 3, paragraph 10, of Legislative Decree n. 254, dated 30 December 2016, such non-financial information is subject to a separate compliance report signed by us.
Bologna, March 28, 2019
EY S.p.A. Signed by: Alberto Rosa, Partner
This report has been translated into the English language solely for the convenience of international readers.
Statement of Financial Position Income Statement Statement of Comprehensive Income Cash Flow Statement Statement of Changes in Shareholders' Equity
Aeroporto Guglielmo Marconi di Bologna S.p.A. 134
| in units of Euro | Note | As at 31.12.2018 | As at 31.12.2017 |
|---|---|---|---|
| Concession rights | 161,147,931 | 151,211,671 | |
| Other intangible assets | 2,049,015 | 1,783,374 | |
| Intangible assets | 1 | 163,196,946 | 152,995,045 |
| Land, property, plant and equipment | 14,873,248 | 14,441,053 | |
| Investment property | 4,732,016 | 4,732,016 | |
| Tangible assets | 2 | 19,605,264 | 19,173,069 |
| Investments | 3 | 3,189,098 | 726,407 |
| Other non-current financial assets | 4 | 16,135,377 | 18,257,445 |
| Deferred tax assets | 5 | 5,821,701 | 6,487,304 |
| Other non-current assets | 6 | 1,422,555 | 1,448,795 |
| Other non-current assets | 26,568,731 | 26,919,951 | |
| NON-CURRENT ASSETS | 209,370,941 | 199,088,065 | |
| Inventories | 7 | 526,857 | 487,640 |
| Trade receivables | 8 | 13,759,090 | 12,560,881 |
| Other current assets | 9 | 4,358,033 | 3,969,722 |
| Current financial assets | 10 | 11,037,009 | 19,610,165 |
| Cash and cash equivalents | 11 | 12,824,687 | 13,947,469 |
| CURRENT ASSETS | 42,505,676 | 50,575,877 | |
| Assets held-for-sale | 12 | 0 | 117,000 |
| TOTAL ASSETS | 251,876,617 | 249,780,942 |
| in units of Euro | Note | As at 31.12.2017 | |
|---|---|---|---|
| Share capital | 90,314,162 | 90,314,162 | |
| Reserves | 62,820,972 | 61,997,661 | |
| Profit (loss) for the year | 17,100,846 | 14,908,504 | |
| TOTAL SHAREHOLDERS' EQUITY | 13 | 170,235,980 | 167,220,327 |
| Severance and other personnel provisions | 14 | 3,870,657 | 4,060,893 |
| Deferred tax liabilities | 15 | 2,027,155 | 2,003,009 |
| Provision for renewal of airport infrastructure | 16 | 10,240,553 | 9,476,363 |
| Provisions for risks and charges | 17 | 1,021,116 | 1,254,019 |
| Non-current financial liabilities | 18 | 11,436,479 | 15,345,021 |
| Other non-current liabilities | 191,954 | 191,954 | |
| NON-CURRENT LIABILITIES | 28,787,914 | 32,331,259 | |
| Trade payables | 19 | 18,470,530 | 15,738,941 |
| Other liabilities | 20 | 26,140,510 | 23,836,963 |
| Provision for renewal of airport infrastructure | 21 | 1,716,590 | 3,497,801 |
| Provisions for risks and charges | 22 | 514,743 | 0 |
| Current financial liabilities | 23 | 6,010,350 | 7,155,651 |
| CURRENT LIABILITIES | 52,852,723 | 50,229,356 | |
| TOTAL LIABILITIES | 81,640,637 | 82,560,615 | |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 251,876,617 | 249,780,942 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 135
| in units of Euro | Note | for the year ended | for the year ended |
|---|---|---|---|
| 31.12.2017 | |||
| Revenues from aeronautical services | 51,083,900 | 47,635,859 | |
| Revenues from non-aeronautical services | 40,635,703 | 37,686,981 | |
| Revenues from construction services | 15,619,798 | 6,649,770 | |
| Other operating revenues and income | 1,052,840 | 1,005,182 | |
| Revenues | 24 | 108,392,241 | 92,977,792 |
| Consumables and goods | (754,866) | (808,373) | |
| Service costs | (18,513,312) | (17,269,511) | |
| Construction service costs | (14,875,998) | (6,333,114) | |
| Leases, rentals and other costs | (7,979,278) | (7,528,711) | |
| Other operating expenses | (3,157,534) | (3,406,934) | |
| Personnel costs | (25,875,625) | (25,522,132) | |
| Costs | 25 | (71,156,613) | (60,868,775) |
| Amortisation/impairment of Concession Rights | (5,659,042) | (5,551,504) | |
| Amortisation of other intangible assets | (1,319,985) | (964,286) | |
| Depreciation of tangible assets | (2,166,412) | (2,010,039) | |
| Depreciation, amortisation and impairment | 26 | (9,145,439) | (8,525,829) |
| Provisions for doubtful accounts | (42,305) | 16,808 | |
| Provision for renewal of airport infrastructure | (3,695,799) | (2,536,965) | |
| Provisions for other risks and charges | (284,340) | (235,848) | |
| Provisions for risks and charges | 27 | (4,022,444) | (2,756,005) |
| Total Costs | (84,324,496) | (72,150,609) | |
| Operating result | 24,067,745 | 20,827,183 | |
| Financial income | 28 | 355,763 | 262,303 |
| Financial expenses | 28 | (589,307) | (813,227) |
| Result before taxes | 23,834,201 | 20,276,259 | |
| Taxes for the year | 29 | (6,733,355) | (5,367,755) |
| Profit (loss) for the year | 17,100,846 | 14,908,504 | |
| Undiluted earnings/(loss) per share (in Euro) | 0.48 | 0.41 | |
| Diluted earnings/(loss) per share (in Euro) | 0.48 | 0.41 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 136
| in units of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
|---|---|---|
| Profit (loss) for the year (A) | 17,100,846 | 14,908,504 |
| Other profits (losses) that will be reclassified in the net result for the year | 0 | 0 |
| Total other profits (losses) that will be reclassified in the net result for the year (B1) | 0 | 0 |
| Other profits (losses) that will not be reclassified in the net result for the year | ||
| Actuarial profits (losses) on severance and other personnel provisions | 117,718 | 26,082 |
| Tax impact on actuarial profits (losses) on severance and other personnel provisions | (28,309) | (6,391) |
| Total other profits (losses) that will not be reclassified in the net result for the year (B2) | 89,409 | 19,691 |
| Total other profits (losses), net of taxes (B1 + B2) = B | 89,409 | 19,691 |
| Total profits (losses), net of taxes (A + B) | 17,190,255 | 14,928,195 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 137
| in units of Euro | As at 31.12.2018 | As at 31.12.2017 |
|---|---|---|
| Core income-generating operations | ||
| Result for the year before taxes | 23,834,201 | 20,276,259 |
| Adjustments to items with no impact on cash and cash equivalents | ||
| - Margin from construction services | (743,800) | (316,656) |
| + Depreciation and amortisation | 9,145,439 | 8,525,829 |
| + Provisions | 4,022,444 | 3,071,337 |
| + Interest expense (income) on discounting and severance provisions | (109,918) | 147,784 |
| +/- Interest income and financial charges | 343,462 | 403,140 |
| +/- Losses/gains and other non-monetary costs/revenues | 1,521 | 29,089 |
| +/- Severance provisions and other personnel costs | 79,130 | 92,052 |
| Cash flow generated/(absorbed) by operating activities before changes in working capital | 36,572,480 | 32,228,834 |
| Change in inventories | (39,217) | (11,483) |
| (Increase)/decrease in trade receivables | (1,236,069) | 678,117 |
| (Increase)/decrease in other receivables and current/non-current assets (non-financial) | (59,479) | (317,450) |
| Increase/(decrease) in trade payables | 2,731,588 | 682,404 |
| Increase/(decrease) in other liabilities, various and financial | 2,370,154 | 754,778 |
| Interest paid | (510,795) | (674,999) |
| Interest collected | 200,923 | 440,908 |
| Taxes paid | (6,156,966) | (5,544,105) |
| Severance and other personnel provisions paid | (204,981) | (338,856) |
| Use of provisions | (4,535,578) | (3,973,897) |
| Cash flow generated / (absorbed) by net operating activities | 29,132,060 | 23,924,251 |
| Purchase tangible assets | (2,604,010) | (4,625,384) |
| Payment from sale of tangible assets | 5,982 | 31,309 |
| Purchases of intangible assets/concession rights | (16,850,573) | (7,989,929) |
| Proceeds on sale of tangible assets | 388,948 | 0 |
| Purchase/capital increase of equity investments | (2,458,820) | 0 |
| Proceeds on sale of equity investments | 117,000 | 878,323 |
| Changes in current and non-current financial assets | 10,622,068 | 0 |
| Cash flow generated / (absorbed) by investment activities | (10,779,405) | (11,705,681) |
| Proceeds from the issuance of shares and other equity instruments | 0 | 0 |
| Dividends paid | (14,161,261) | (10,006,809) |
| Loans received | 0 | 0 |
| Loans repaid | (5,314,177) | (5,314,168) |
| Cash flow generated / (absorbed) by financing activities | (19,475,438) | (15,320,977) |
| Final cash change | (1,122,782) | (3,102,407) |
| Cash and cash equivalents at beginning of year | 13,947,469 | 17,049,876 |
| Final cash change | (1,122,782) | (3,102,407) |
| cash and cash equivalents at end of year | 12,824,687 | 13,947,469 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 138
| in units of Euro | Share capital | Share Premium Reserve |
Legal Reserve | Other Reserves |
FTA Reserve | Actuarial Profits/(Loss) Reserve |
Profits (losses) Carried Forward |
Assets held for sale reserve |
Profit (loss) for the year |
Shareholders' Equity |
|---|---|---|---|---|---|---|---|---|---|---|
| Shareholders' Equity as at 31.12.2016 | 90,314,162 | 25,683,134 | 4,903,057 | 32,934,245 | (3,205,671) | (878,066) | 1,991,758 | 0 | 10,542,980 | 162,285,599 |
| Allocation of the 2016 financial year result | 0 | 0 | 527,149 | 9,022 | 0 | 0 | 10,006,809 | 0 | (10,542,980) | 0 |
| Share capital increase | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Dividends paid | 0 | 0 | 0 | 0 | 0 | 0 | (10,006,809) | 0 | 0 | (10,006,809) |
| Assets held-for-sale | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 13,342 | 0 | 13,342 |
| Total comprehensive profit (loss) | 0 | 0 | 0 | 0 | 0 | 19,691 | 0 | 0 | 14,908,504 | 14,928,195 |
| Shareholders' Equity as at 31.12.2017 | 90,314,162 | 25,683,134 | 5,430,206 | 32,943,267 | (3,205,671) | (858,375) | 1,991,758 | 13,342 | 14,908,504 | 167,220,327 |
| Allocation of the 2017 financial year result | 0 | 0 | 745,425 | 1,818 | 0 | 0 | 14,161,261 | 0 | (14,908,504) | 0 |
| Share capital increase | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Dividends paid | 0 | 0 | 0 | 0 | 0 | 0 | (14,161,261) | 0 | 0 | (14,161,261) |
| Assets held-for-sale | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (13,342) | 0 | (13,342) |
| Total comprehensive profit (loss) | 0 | 0 | 0 | 0 | 0 | 89,409 | 0 | 0 | 17,100,846 | 17,190,255 |
| Shareholders' Equity as at 31.12.2018 | 90,314,162 | 25,683,134 | 6,175,631 | 32,945,085 | (3,205,671) | (768,966) | 1,991,758 | 0 | 17,100,846 | 170,235,979 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 139
Aeroporto Guglielmo Marconi di Bologna S.p.A. 140
The company Aeroporto Guglielmo Marconi di Bologna S.p.A. (hereinafter "AdB" or the "company") is full manager of Bologna airport under Full Management Agreement No. 98 of July 12, 2004 and subsequent additional instruments, approved by Decree of the Ministry of Transport and Infrastructure and the Ministry of the Economy and Finance on March 15, 2006, with a term of 40 years from December 28, 2004. Its registered office is located at Via del Triumvirato 84, Bologna and it is registered with the Bologna Companies Register.
These financial statements of the company concern the year ended December 31, 2018 and include the comparative figures for the year ended December, 2017 (hereafter "the financial statements of the company", "separate financial statements" or "financial statements").
The financial statements were prepared under the historic cost convention, except for financial assets heldfor-sale, and Intangible Assets comprising Energy Certificates, which were recognised at fair value, and in accordance with the going concern principle. The Company considers that, although enduring a difficult economic and financial environment, no significant uncertainties exist (as defined by paragraph 25 of IAS 1) on the going concern.
The financial statements are presented in Euro, which is also the company functional currency, and all amounts are rounded to the nearest thousands of Euro, where not otherwise indicated.
These financial statements were prepared in compliance with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") endorsed by the European Union and in force at the preparation date of the financial statements, in addition to the provisions issued in enactment of Article 9 of Legislative Decree 38/2005 (Consob Motions No. 15519 and 15520 of July 27, 2006).
In 2014, the company voluntarily opted to prepare the consolidated financial statements and the separate financial statements in accordance with International Accounting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") and prepared considering the transition date to IFRS (First Time Adoption "FTA") as January 1, 2012.
The publication of the financial statements of Aeroporto Guglielmo Marconi di Bologna S.p.A. for the year ended December 31, 2018 was approved by the Board of Directors on March 14, 2019.
The company opted to apply the Separate and Comprehensive Income Statements, as permitted by IAS 1, considering such more representative of operations.
In particular, the Statement of Financial Position has been prepared by separating assets and liabilities into current and non-current categories.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 141
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
All other assets are classified as non-current.
A liability is considered current when:
it is expected to be settled within the normal operating cycle; it is held principally for trading;
it must be settled within twelve months of the closing date of the year or the entity does not have an unconditional right to defer settlement of the liability for at least twelve months of the closing date of the year.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The Income Statement has been prepared by classifying income and expenses by their nature, whereas the Cash Flow Statement has been prepared using the indirect method, according to which cash flows are classified into operating, investing and financing categories.
The information at December 31, 2018 and 2017 concerning the name, Share Capital and percentage holding in the subsidiaries is provided below:
| % Held | ||||
|---|---|---|---|---|
| in thousands of Euro | Currency | Share capital |
As at 31.12.2018 |
As at 31.12.2017 |
| Fast Freight Marconi S.p.a. Società Unipersonale | Euro | 520 | 100.00% | 100.00% |
| Tag Bologna S.r.l. Società Unipersonale | Euro | 316 | 100.00% | 51.00% |
On October 2, the Parent Company finalised the strategic acquisition of 49% of TAG Bologna S.r.l., which is now therefore wholly-owned.
The information at December 31, 2018 and 2017 concerning the name, Share Capital and percentage holding in the associates is provided below:
| % Held | ||||
|---|---|---|---|---|
| in thousands of Euro | Currency | Share capital |
As at 31.12.2018 |
As at 31.12.2017 |
| Ravenna Terminal Passeggeri S.r.l. | Euro | 165 | 24.00% | 24.00% |
The Share Capital of the associate Ravenna Terminal Passeggeri Srl was reduced for losses from Euro 300 thousand to Euro 165 thousand by the Shareholders' Meeting of April 4, 2017.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 142
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
Business combinations are recognised using the purchase method. The purchase cost is calculated as the total of the fair value consideration transferred at the acquisition date, and the value of any minority equity holding. For every business combination, the company decides whether to measure the minority interest at fair value or in proportion to the amount held in the identifiable net assets of the investee. The acquisition costs are expensed in the year and classified under administration expenses.
When the company acquires a business, the financial assets acquired or liabilities assumed under the agreement are classified or designated in accordance with the contractual terms, the economic conditions and the other conditions at the acquisition date. This includes the verification to establish whether an embedded derivative must be separated from the host contract.
In the case of business combinations undertaken in a series of phases, the previous holding is remeasured at fair value at the acquisition date and any profit or loss is recorded to the income statement. It is therefore considered in the determination of goodwill.
Any potential payment to be recognised is recorded by the acquirer at fair value at the acquisition date. The change in the fair value of the potential payment classified as an asset or liability must be recorded in the income statement or in the statement of comprehensive income. Where the potential payment is not within the scope of IAS 39, the amount is measured in accordance with the appropriate IFRS. If the potential payment is classified in equity, the amount is not remeasured and its subsequent settlement is recorded in equity.
The goodwill is initially recorded at cost represented by the excess of the total consideration paid and the amount recognised for the minority interest holdings compared to the net identifiable assets acquired and liabilities assumed by the company. If the fair value of the net assets acquired exceeds the total consideration paid, the company again verifies if it has correctly identified all the assets acquired and all the liabilities assumed and reviews the procedure utilised to determine the amount to be recorded at the acquisition date. If from the new valuation the fair value of the net assets acquired is still above the consideration, the difference (profit) is recorded in the income statement.
After its initial recognition, goodwill is valued at cost net of accumulated impairment. For the purpose of impairment testing, goodwill acquired in a business combination must be allocated, from the acquisition date, to each of the company's cash-generating units which are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the entity are assigned to those units. If the goodwill is allocated to a cash-generating unit and the entity sells part of the activities of this unit, the goodwill associated with the activity sold is included in the book value of the activity when determining the gain or loss deriving from the sale. The goodwill associated to assets sold is calculated based on the relative values of the asset sold and the part maintained by the cash generating unit.
A subsidiary is a company over which control may be exercised.
This occurs when and only when it has:
When a company holds less than the majority of the voting rights (or similar rights) of an investee, it should consider all the facts and significant circumstances to establish whether control of the investment entity exists, including:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 143
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The company reconsiders if it has control of an investee and if the facts and circumstances indicate that there have been changes in one or more of the three significant elements for the definition of control.
The investments of the company in subsidiaries are valued using the cost method, adjusted in the case of impairment.
An associate is one in which the company exercises significant influence and is not classifiable as a subsidiary or joint venture.
Investments of the company in associates are valued at equity.
Under the equity method, the investment in an associate is initially recognised at cost and the carrying amount is increased or decreased to recognise the associate share of the profit or loss after the date of acquisition.
Goodwill pertaining to associates is included in the carrying value of the investment and is not subject to amortisation or an impairment test.
The income statement reflects the company's share of the associate's result for the year. If an associate records adjustments with direct charges to shareholders' equity, the company records its share and records such (where applicable) in the statement of changes in shareholders' equity. Profits and losses deriving from transactions between the company and associates are eliminated in proportion to the investment held in the associate.
The company share of the results of the associates is recognised in the income statement. The share of the result represents the result of the associate attributed to the shareholders; this refers therefore to the net result after taxes and the share attributable to the other shareholders of the associate.
The reporting date of the financial statements of the associate must coincide with the year-end of the company. The company's financial statements must be prepared using uniform accounting policies for like transactions and events in similar circumstances.
Subsequent to the application of the equity method, the company assesses whether it is necessary to recognise a loss in value of investments in associates. The company at each reporting date assesses whether an investment in an associate has incurred a loss in value. Where a loss arises, the company calculates the amount of the loss as the difference between the recoverable value of the associate and the carrying value in the financial statements, recognising this difference in the income statement.
Once significant influence on the associate no longer exists, the company values any residual investment at fair value. Any difference between the carrying value of the investment at the date significant influence no longer exists and the fair value of the residual investment and the amount received must be recorded in the income statement.
Foreign currency transactions are initially recorded in the functional currency, applying the exchange rate at the transaction date.
Monetary assets and liabilities in foreign currencies are translated to the functional currency at the exchange rate at the reporting date. The profits and losses deriving from the conversion are recorded in the income statement.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 144
Non-monetary items, measured at historical cost in foreign currency, are translated using the exchange rates on the date the transaction was first recorded. The non-monetary accounts recorded at fair value in foreign currencies are converted using the exchange rate at the date the value was determined. The profit or loss deriving from the translation of non-monetary items is treated in line with the recognition of the profit or loss recorded on the change in the fair value of these items (i.e. the translation differences on the accounts to which the fair value changes is recorded in the statement of comprehensive income or in the income statement are recorded, respectively in the statement of comprehensive income or in the income statement).
An intangible asset is an asset without physical substance, identifiable, under control of the entity and capable of generating future economic benefits, and those derived from business combinations.
The useful life of the intangible assets is measured as definite or indefinite.
Intangible assets with a definite useful life are recorded at acquisition or production cost or, where deriving from business combinations, are capitalised at the fair value at the acquisition date; these assets include accessory charges, amortised on a straight-line basis for the period of their residual useful life in accordance with IAS 36 and undergo an impairment test whenever there are indications of loss in value.
The residual value at the end of the useful life is presumed to be zero unless there is a commitment by a third-party purchaser of the asset at the end of the useful life or an active market for the asset exists. The Directors review the estimate of the useful life of intangible assets at each reporting date.
The amortisation of definite intangible assets is recorded in the income statement.
The company has not identified intangible assets with indefinite useful lives.
"Concession rights" refer to the amount recognised under intangible assets against the airport infrastructure assets held in relation to the concession rights acquired for the management of the infrastructures which permits the right to charge for the utilisation of such infrastructure, in execution of a public service, in accordance with the provisions of IFRIC 12 – Service Concession Arrangements.
The Concession under which the company operates meets the requirement that the concession holder must construct and operate the infrastructure on the grantor's behalf. Accordingly, the Group may not recognise it among tangible assets.
The company contracts with third parties responsible for constructing and improving the infrastructure. Accordingly, the fair value of the fees for the construction/improvement services rendered by the company is the fair value of the fees for the construction/improvement service rendered by third parties, plus a mark-up representative of the internal costs of planning and coordination of the work by a specific internal unit.
The external costs incurred to provide construction service are therefore recognised under the item "Construction service costs" of the income statement.
Together with these costs, the company also recognises an increase in the item "Concession rights" equal to the fair value of the service rendered, with a balancing entry to the item "Revenues from Construction services".
Aeroporto Guglielmo Marconi di Bologna S.p.A. 145
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The resulting concession rights are amortised on a straight-line basis over the term of the concession, starting when the asset constructed on the grantor's behalf becomes operational.
The useful life of an intangible asset deriving from contractual rights or other legal rights is determined on the basis of the lower between the duration of the contractual or legal rights (concession duration) and the utilisation period of the asset. The recoverability of the carrying value less amortisation is verified annually adopting the impairment test criteria.
"Software, licences and similar rights" primarily refers to the costs of implementing and customising management software and of purchasing software licences, amortised at a rate of 33%.
"Energy Certificates" refers to the White Certificates concerning the Trigeneration plant recognised to the company by the energy services operator (GSE). These certificates are measured at fair value represented by the average sales price of the last annual market session of energy efficiency securities.
The gains and losses deriving from the elimination of an intangible asset are measured as the difference between the net sales proceeds and the book value of the intangible asset, and are recorded in the income statement in the year in which they are eliminated.
Tangible assets are initially recognised at purchase price or construction cost and includes the price paid to acquire or construct the asset (net of discounts) and any directly attributable costs to the acquisition and necessary for the asset to enter into service.
Land, both constructible and relating to civil and industrial buildings, is accounted for separately and is not depreciated in that it has an indefinite useful life.
Tangible fixed assets are presented net of accumulated depreciation and any losses in value, calculated as described below. Depreciation is calculated, on a straight-line basis, based on the estimated useful life. Where a tangible fixed asset comprises a number of significant components with differing useful lives, the depreciation is carried out separately for each component. Land is not depreciated and fixed assets heldfor-sale are valued at the lower of the subscription value and the fair value net of selling costs.
The depreciation rates used are as follows:
The residual value of the asset, useful life and the methods applied are reviewed on an annual basis and adjusted if necessary at the end of each year.
Losses in value are charged to the income statement under depreciation costs. Such losses are restated when the reasons for their write-down no longer exist.
At the time of sale, or when there are no expected future economic benefits from the use of an asset, it is eliminated from the financial statements and any loss or profit (calculated as the difference between sale's price and book value) is charged to the income statement in the year of its elimination.
Maintenance and repair expenses, which do not increase the value and/or extend the residual useful life of the asset are expensed in the year in which they are incurred; where they increase the value and/or extend the residual life of the assets, they are capitalised.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 146
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The company classifies land purchased for the execution of future real-estate investments to be defined as investment property.
Such land is initially recognised at purchase cost and then measured at cost.
The items of tangible assets in question are not subject to depreciation because they refer to land. The company uses technical appraisals to monitor the fair value of the property in question in order to determine whether it has become impaired.
Investment properties are eliminated from the financial statement when they are sold or when they are unusable on a long-term basis and no future economic benefits are expected from their sale. Any profits or losses due to the retirement or disposal an investment property are recognised in the income statement when the property is retired or disposed of.
The definition of a contractual agreement as a leasing operation (or containing a leasing operation) is based on the substance of the agreement and requires an assessment of whether the agreement depends on the utilisation of one or more specific assets or whether the agreement transfers the right to the utilisation of this asset. The verification that an agreement contains a lease is carried out at the beginning of the agreement.
A leasing contract is classified as a finance lease or an operating lease at the beginning of the lease. A lease contract that substantially transfers all the risks and rewards of ownership of the asset leased, is classified as a finance lease.
An operating lease is a leasing contract which does not qualify as a finance lease. The company as leasee records operating leases in the income statement on a straight-line basis over the duration of the contract. The company recognises leasing agreements in which it is the lessor as operating leases when it retains essentially all the risks and benefits of ownership of the asset. The initial negotiating costs are added to the carrying amount of the leased asset and recognised over the duration of the contract, on the same basis as lease income. Rent not estimated in advance is recognised as revenue in the period in which it matures.
The carrying amount of non-financial assets undergo an impairment test whenever there are signs internal or external to the entity which indicate the possibility of a loss in value of the assets or group of assets (defined as the Cash Generating Unit or CGU).
The recoverable value is the higher between the fair value of the asset or cash generating unit, net of selling costs, and its value in use. The recoverable value is determined by individual asset except when this asset generates cash flows which are not sufficiently independent from those generated by other assets or groups of assets.
The losses in value incurred by operating assets are recorded in the income statement in the category of costs relating to those assets. At each reporting date, the company evaluates, in relation to the assets other than goodwill, the existence of indicators of a reduction in the loss of value previously recorded and, where these indicators exist, makes an estimate of the recoverable value. The value of an asset previously written down may be restated only if there have been changes in the estimates used to determine the recoverable value of the asset after the last recording of a loss in value. The recovery of value cannot exceed the book value which would have been calculated, net of amortisation, where no such loss in value was recorded in previous years. This recovery is recorded in the income statement unless the fixed asset is recorded at revalued amount, in which case the recovery is treated as a revaluation profit.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 147
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
If the carrying amount of an asset is higher than its recoverable value, this asset has incurred a loss in value and is consequently written down to the recoverable value. In the determination of the value in use, the estimated future cash flows are discounted by the Company at a pre-tax rate that reflects the market assessment of the current value of money and the risks specific to the asset. In determining the fair value less selling costs, an adequate valuation model is utilised. These calculations are made utilising appropriate valuation multipliers, listed equity prices for publicly traded securities and other fair value indicators available.
The recoverable value is the higher between the fair value of the asset or cash generating unit, net of selling costs, and its value in use. The recoverable value is determined by individual asset except when this asset generates cash flows which are not sufficiently independent from those generated by other assets or groups of assets.
The following criteria are utilised for the recording of impairments on specific categories of assets:
The company undertakes an impairment test on Concession rights annually at the year-end close or more frequently if events or changes in circumstances indicate that the carrying amount may have incurred a loss in value (whenever impairment indicators arise).
The loss in value on such intangible assets is determined through a valuation of the recoverable value of the cash generating unit (or group of units) to which they relate. When the recoverable value of the cash generating unit (or group of units) is lower than the carrying value of the cash generating unit (or group of cash-generating units) to which the intangible assets are allocated, a loss in value is recognised.
For impairment testing purposes, the company has identified a single CGU (cash generating unit), which coincides with the entity Aeroporto G. Marconi di Bologna S.p.A..
The impairment test compares the carrying amount of the asset or of the cash generating unit (CGU) with the recoverable value of the asset, arising from the higher between the fair value (net of selling costs) and the value of the net discounted cash flows which are expected to arise from the asset or from the CGU.
Each unit or Group of units to which the intangible asset is allocated represents the lowest level within the group to which the goodwill is monitored at internal management level.
The conditions and the methods for any write-back of an asset previously written down applied by the company, excluding in any case any recovery in the value of goodwill, are those as per IAS 36.
IFRS 9 provides for a single approach for the analysis and classification of all financial assets, including those contained in embedded derivatives. The classification and the relative measurement is made considering both the management model of the financial assets and the contractual characteristics of the cash flows from the asset.
The financial asset is measured using the amortised cost method where both of the following conditions are satisfied:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 148
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The financial asset is measured at fair value, with recognition of the effects in the statement of comprehensive income, if the objectives of the management model are to hold the financial asset in order to obtain the contractual cash flows or to sell the asset.
Finally, there is the residual category of financial assets measured at fair value with recognition of the effects through the income statement, which includes assets held for trading.
A financial asset which satisfies the requirements to be classified and measured at amortised cost may, on initial recognition, be designated as a financial asset at fair value, with recognition through the income statement, if this accounting treatment permits the elimination or significant reduction of the asymmetry in the measurement or recognition (so-called "accounting mismatch"), which would otherwise arise from the measurement of the asset or liability or from the recognition of the relative profits or losses on a different basis.
In addition, in the case of investments in equity instruments for which, therefore, it is not possible the recognition and measurement at amortised cost, where this concerns equity investments not held for trading purposes, but for strategic purposes, IFRS 9 provides that on initial recognition the entity may irrevocably choose to measure these at fair value, with recognition of any subsequent changes in the statement of comprehensive income without passing through profit or loss any gains or losses in the case of disposal.
Where the financial assets are only held for the company's temporary needs to invest liquidity in order to obtain the contractual cash flows these are classified in the category "Held to collect - HTC".
Where the financial assets meet the company's objective either to collect the contractual cash flows or the future sale these are classified in the category "Held to collect and sell – HTC&S".
The company does not hold and did not hold during 2018 derivative financial instruments.
Loans, similar to trade receivables, are held until their collection at the contractual maturities and generate cash flows relating to the collection of the principal and interest. The company analysed the contractual cash flows of these instruments and concluded that they comply with the amortised cost measurement criteria in accordance with IFRS 9.
The amortised cost is calculated taking into consideration all discounts or purchase premiums and includes the commissions which are an integral part of the effective interest rate and of the transaction costs. Current trade receivables are not discounted as the effect of discounting the cash flows is immaterial. The profits and losses are recognised to the income statement when the loans and receivables are eliminated or if there is an impairment, also through the amortisation process.
In the notes, the company discloses the fair value of financial instruments at amortised cost and nonfinancial assets, such as investment property.
Fair value concerns the price that will be received for the sale of an asset or which will be paid for the transfer of a liability, in a transaction settled between market operators at the measurement date.
Fair value measurement requires that the sale of the asset or transfer of the liability has taken place:
The principal market or the most advantageous market must be accessible for the Company.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 149
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The fair value of an asset or liability is measured adopting the assumptions which market operators would utilise in the determination of the price of the asset or liability, assuming they act to best satisfy their economic interests.
The fair value measurement of a non-financial asset considers the capacity of a market operator to generate economic benefits utilising the asset to its maximum and best use or of selling to another market operator that would utilise the asset to its maximum or best use.
The company utilises measurement techniques which are appropriate to the circumstances and for which there is sufficient available data to measure the fair value, maximising the utilisation of relevant observable inputs and minimising the use of non-observable inputs.
All the assets and liabilities for which the fair value is measured or stated in the financial statements are categorised based on the fair value hierarchy, as described below:
The fair value measurement is classified entirely in the same hierarchical level of the fair value in which the lowest hierarchical input level utilised for the measurement is classified.
For the assets and liabilities recognised in the financial statements on a recurring basis, the company assesses whether there have been transfers between the hierarchy levels, reviewing the classification (based on the lowest input level, which is significant for the fair value measurement in its entirety) at each reporting date.
IFRS 9 defines a new impairment model of financial assets, with the objective to provide useful information to the readers of the financial statements in relation to expected losses. In particular, the model requires verification and recognition of any expected losses at any time over the life of the instrument and the updating of the expected losses at each reporting date to reflect the changes in the credit risk of the instrument; therefore, it is no longer necessary that a particular event arises ("trigger event") in order to verify and recognise losses on receivables.
The impairment test must be applied to all financial instruments, with the exception of those measured at fair value with recognition through the income statement.
The company applies the simplified Provision Matrix approach and recognises the expected losses on all trade receivables based on the residual duration, defining a matrix for the provision based on the historical
experience relating to the losses on receivables, adjusted to take into account specific forecast factors relating to the creditors and the economic environment (Expected Credit Loss – ECL concept).
The book value of the asset is reduced through the use of a provision and the amount of the loss recognised in the income statement.
Receivables which have incurred a loss in value are reversed when it is determined that they are irrecoverable.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 150
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
In the case of equity instruments classified as available for sale, an objective indication of impairment would include a significant or prolonged reduction in the fair value of the instrument under its cost price. The term "significant" is assessed in relation to the original cost of the instrument and the term "prolonged" in relation to the period in which the fair value is maintained under the original cost.
When there is a loss in value of a financial asset available-for-sale, the amount is transferred from equity to the income statement equal to the difference between its cost (net of the repayment of the principal and interest) and its fair value, net of any loss in value previously recorded in the income statement.
The restatement relating to capital instruments classified as available-for-sale is not recorded in the income statement. The recovery in value of debt instruments is recorded in the income statement if the increase in the fair value of the instrument can be attributable to an event which occurred after the recording of the loss in the income statement.
Non-current assets classified as held-for-sale are measured at the lower of their carrying value and the fair value less selling costs. They are classified as such if the carrying value will be recovered through a sales operation rather than through their continual use. This condition exists only when the sale is highly probable and the asset or discontinued group is available for an immediate sale in its current conditions. Management must be committed to the sale, whose completion must be expected within one year from the date of the classification.
In the income statement and the previous year comparative period, the profits and losses of discontinued operations must be classified separately from profits and losses from continuing operations, shown after taxes, even when the company maintains a minority interest in the subsidiary after the sale. The resulting profit or loss, after income taxes, is shown separately in the income statement.
Plant, property and equipment and intangible assets once classified as held-for-sale are no longer amortised or depreciated.
Financial assets (or, where applicable, part of a financial asset or part of a group of similar financial assets) are derecognised firstly (e.g. eliminated from the statement of financial position) when:
Construction contracts work-in-progress are measured on the basis of the contractual payments matured with reasonable certainty in relation to the advancement of work under the percentage of completion method, determined through the measurement of work completed, to be attributed to the revenues and economic result of the contract to each year in proportion to the advancement of work. The positive or negative difference between the value of the completed portion of the contracts and that of the advances received is recognised in the statement of financial position, as an asset or liability, respectively, while also taking account of any impairment losses recognised due to risks associated with non-payment for work done on behalf of clients.
The contract revenues, in addition to the contractual payments, include the variances, price revisions and any claims up to the amount it is probable that they represent effective revenues that can be determined reliably.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
If a project is expected to yield a loss, this loss is immediately recognised in full, regardless of the progress on the project.
Construction services for the grantor relating to the concession agreement to which the company is a party are also recognised in the income statement according to the state of progress. In particular, construction and/or improvement revenue – which represents the consideration due for the services rendered – is measured at fair value, determined on the basis of the total costs incurred, consisting primarily of the costs of external services and the costs of benefits for employees engaged in the activities concerned.
The balancing entry for such construction service revenue is to a financial asset or airport concession taken to concession rights among intangible assets, as discussed in the relevant section.
Inventories are recorded at the lower of purchase or production cost and realisable value represented by the amount that the company expects to obtain from their sale in the normal course of operations. The cost of inventories is calculated using the weighted average cost method.
Cash and cash equivalents include those values which are available on demand at short notice, certain in nature and with no payment expenses.
The benefits guaranteed to employees paid on the conclusion of employment (leaving indemnity) or other long-term benefits (e. g. non-competitive agreements, long-term incentive plans) are recognised in the period the right matures.
The liability, net of any plan assets, is calculated on the basis of actuarial assumptions and is recorded by the accrual method consistent with the years of employment necessary to obtain such benefits. The liability is calculated by independent actuaries utilising the projected unit credit method.
The amount not only reflects the payables matured at the financial statement but also the future salary increases and related statistical data.
Revaluations, which include actuarial profits and losses, changes in the effect of the limit on the assets, not including net interest (not applicable to the company) and the return on plan assets (not including net interest) are recognised immediately in the statement of financial position by debiting or crediting profits/(losses) carried forward through other comprehensive income in the year in which they occur. Revaluations are not reclassified to the income statement in subsequent years.
The cost of employee service in prior periods is recognised in the income statement on the later of the following dates:
(a) the date on which the plan is changed or reduced; and
(b) the date on which the company recognises the related restructuring costs.
Net interest on the net defined-benefit liabilities/assets are calculated by multiplying the net asset/liability by the discount rate. The company recognises the following changes in the net defined-benefit obligation in the cost of goods sold, administrative expenses and selling and distribution costs in the consolidated income statement (by nature):
Aeroporto Guglielmo Marconi di Bologna S.p.A. 152
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
Following the amendments to severance benefits introduced by Law No. 296 of December 27, 2006 (Finance Law 2007) and subsequent Decrees and Regulations, the severance benefits of Italian companies with more than 50 employees matured from January 1, 2007, or from the option date chosen by the employee, is included under defined contribution plans, both in the case of supplementary pension options and in the case of allocation to the INPS Treasury Fund. The severance benefits accrued until December 31, 2006 have been treated as defined-benefit.
The contributions to be paid into a defined-contribution plan in exchange for the employee service in question are treated both as a liability (account payable) after having deducted any contributions already paid, and as a cost.
Provisions for risks and charges relate to costs and expenses of a defined nature and of certain or probable existence whose amount or date of occurrence is uncertain at the present financial statement date. The provisions are recorded when:
Provisions are recorded at the value representing the best estimate, supported by expert opinion, of the amount that the Company would rationally pay to discharge the obligation or to transfer it to a third party at the financial statement date. When the financial effect of the time is significant and the payment dates of the obligations can be reliably estimated, the provision shall be discounted at the average cost of debt to the company; the increase of the provision due to the passing of time is recorded in the income statement in the account "Net financial income/(charges)".
If the liability relates to a tangible fixed asset (demolition of assets), the provision is recognised in line with the asset to which it refers; the recognising of the charge to the income statement is made through depreciation.
The provisions are periodically updated to reflect the changes in the estimate of the costs, of the time period and of the discounting rate; the revision of estimates is recorded in the same income statement accounts in which the provision was recorded, when the liability relates to tangible fixed assets, and in the asset account to which it refers.
In accordance with the obligations assumed under current agreements, the provision for renewal of airport infrastructure includes accruals relating to extraordinary maintenance, refurbishment and replacement to be undertaken at a future point in time to ensure that airport infrastructure remains duly functional and secure. Accruals to this provision are recognised according to the degree of use of the infrastructure, indirectly reflected in the expected date of replacement/renewal. The values recorded in this line item also take due account of a financial component, to be applied according to the intervals between the various renewal cycles, intended to ensure that the provisions set aside are adequate. The estimate of the provision for renewal of airport infrastructure therefore requires complex professional technical judgement, in particular in relation to the nature of the costs to be incurred, their amount and the timing of the expected interventions.
Short-term trade payables, which mature within the normal commercial terms, are recognised at cost (their nominal value) and are not discounted as the discounting of cash flows is insignificant.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The other non-financial liabilities are recorded at cost (identified as nominal value).
Other financial liabilities, with the exception of the derivatives, are recognised initially at cost, corresponding to the fair value of the liability plus transaction costs that are directly attributable at the issue of the liability.
After initial recognition, the financial liabilities are measured at amortised cost using the original effective interest rate, which is the rate that renders equal, on the initial recognition, the present cash flow value and the initial recognition value (amortised cost method).
All profits and losses are recognised in the income statement when the liability is settled, in addition to the amortisation process.
Financial guarantee liabilities issued by the company are contracts which require a specific payment to reimburse the holder of a debt security against a loss incurred following non-compliance of the debtor in the payment at the scheduled contractual maturity date. Financial guarantee contracts are initially recognised as a liability at fair value, increased by the directly attributable transaction costs to the issue of the guarantee. After initial recognition, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised, less accumulated amortisation.
A financial liability is derecognised when the underlying obligation of the liability is extinguished, settled or cancelled. If an existing financial liability is replaced by another by the same lender but under substantially different conditions, or if the conditions of an existing financial liability are substantially changed, such a swap or change is treated as an elimination of the original liability and the opening of a new liability, with any differences in accounting values recorded in the separate income statement.
Revenues are recognised for an amount which reflects the payment which the entity considers to have the right to in exchange for the transfer of goods or services to the customer. These are recognised when the contractual obligations have been complied with and in particular when control has been transferred to the customer. In addition, in the measurement of revenue it is necessary to take into account the probability of obtaining and/or collecting the economic benefit related to the income.
Revenues are recorded net of returns, discounts and premiums and promotional charges directly related to the sales revenue, in addition to direct sales taxes.
Commercial discounts, recorded as a direct deduction of revenues, are measured on the basis of contracts signed with airlines and tour operators.
Royalties are recorded based on the accruals principle in accordance with the contracts in force and as per IFRS 15.
Interest income is recognised in accordance with the accruals principle, which takes into account the effective yield of the assets to which it refers.
Dividends are recorded when the shareholders have the right to receive them.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
Costs are recorded when relating to goods and services sold or consumed in the year or when there is no future utility.
Interest expense is recognised in accordance with the accruals principle, which takes into account the effective yield of the liabilities to which it refers. Borrowing costs that are directly attributable to the acquisition, construction or production of an asset which requires a lengthy period before availability for use shall be capitalised as part of the cost of that asset.
Current income taxes are valued at the amount expected to be recovered or paid to the tax authorities. The tax rates and regulations used to calculate such amounts are those issued or substantially issued as at the reporting date of the consolidated financial statements. Current income taxes relating to items recorded directly in equity are charged directly to shareholders' equity and not to the income statement. The Directors periodically assess the positions assumed in the income tax returns where the fiscal regulations are subject to interpretations and, where appropriate, record appropriate provisions
Deferred taxes are calculated using the liability method on temporary differences between values used for fiscal purposes and the assets and liabilities reported in the present financial statements. The deferred tax liabilities are recorded against all temporary taxable differences, with the exception of:
Deferred tax assets are recognised on all temporary differences and fiscal losses carried forward to the extent of the probable existence of adequate future tax profits that can justify the use of deductible temporary differences and fiscal loses carried forwards, except:
The carrying value of deferred tax assets is reviewed at each reporting date and reduced to the extent it is unlikely that sufficient tax profits will be available in the future, so that some or all of the asset may be used. Unrecognised deferred tax assets are reviewed at each reporting date and are recognised to the extent of the probability that the tax profit is sufficient to permit such deferred tax assets to be recovered.
Deferred tax assets and liabilities are calculated on the basis of the tax rates expected to be applied in the year in which the assets are realised or the amounts are paid, considering the rates in effect and those already issued or substantially issued as of the closing date of the financial statements.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
Deferred taxes concerning items recognised outside of the income statement are also recognised outside of the income statement and therefore to equity or to the statement of comprehensive income, in line with the item to which they refer.
The Group offsets deferred tax assets and deferred tax liabilities when there is a legal right to offset current tax assets and current tax liabilities and the deferred tax assets and liabilities relate to income taxes due to the same tax authority.
The fiscal benefits acquired following a business combination, but which do not satisfy the criteria for separate recognition at the acquisition date, may be recognised subsequently, when updated information is received on the facts and on the circumstances. The adjustment is recognised as a reduction of goodwill (up to the value of the goodwill), where this is recorded during the measurement period, or in the income statement, if recorded subsequently.
The rates utilised for the calculation of deferred taxes, which reflect the expected rates on the basis of national legislation in force, are the following:
Costs, revenues, assets and liabilities are recognized net of indirect taxes, such as value added tax, with the following exceptions:
The net amount of the indirect taxes to be recovered or be paid to the Tax Authorities is included in the financial statements under receivables or payables.
The earnings/(loss) per share is calculated by dividing the result of the company by the weighted average number of ordinary shares outstanding during the year, excluding any treasury shares.
The diluted earnings/(loss) per share is calculated by dividing the result of the company by the weighted average number of ordinary shares outstanding during the year, excluding any treasury shares. In order to calculate the diluted earnings per share, the average weighted number of shares outstanding is adjusted in respect of the dilution potential of ordinary shares, while the profit or loss of the company is adjusted to take into account the effects, net of income taxes, of the conversion.
The company records a liability against the distribution to its shareholders of available liquidity or assets other than available liquidity when the distribution is appropriately authorised and is no longer at the discretion of the company. Based on company law in Europe, a distribution is authorised when it is approved by the shareholders. The corresponding amount is recorded directly in shareholders' equity. The distribution of assets other than available liquidity is measured at fair value of the assets to be distributed; the remeasurement of the fair value is recorded directly in shareholders' equity.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 156
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
On the payment of the dividend, any difference between the book value of the assets distributed and the book value of the dividend payable is recorded in the statement of comprehensive income.
Within the listing project concluded on July 14, 2015 with the commencement of trading of the shares on the Star Segment of the Electronic Equities Market (Mercato Telematico Azionario) organised and managed by Borsa Italiana Spa, the Parent Company incurred specific costs, such as (i) commissions recognised to the coordinating banks of the offer, (ii) fees paid to consultants, specialists and legal advisors, (iii) other costs such communication costs, prospectus printing costs and other miscellaneous expenses and charges.
In a listing operation, where the Issuer issues new shares and lists both the new and existing shares, some costs are incurred jointly for the share capital increase and the sale of the new shares, and for the sale of existing shares. In this situation, the criteria for their allocation to the two activities must be identified based on reasonable criteria which reflects the substance of IAS 32, recognising them in part as a decrease of Shareholders' Equity and in part in the Income Statement.
The listing costs which are incremental in nature directly attributable to the share capital increase which would otherwise be avoided, such as for example purposes the intermediary fees, were recorded in 2015 as a decrease in the Shareholders' Equity in the Share Premium Reserve; the remainder, again for example purposes, such as the costs relating to consultants, specialists and legal advisors, was recorded in part in the Income Statement and in part under Shareholders' Equity in accordance with the criterion illustrated above.
The Company prepared the cash flow statement in accordance with the indirect method as permitted by IAS 7. The Company reconciled the pre-tax profit with the net cash flows from operating activities. IAS 7, paragraph 33 allows classification of interest income and expense as an operating activity or financial activity based on the presentation considered most representative by the entity; the Company classifies interest income received and interest expense paid as cash flows from operating activities.
From 2018 the following new accounting standards, amendments and interpretations, revised by the IASB, entered into force:
The company has concluded its analysis, which commenced in 2016, of the impact from the application of the new standard IFRS 9 financial instruments on the statement of financial position, income statement and financial position of the company.
On July 24, 2014, the IASB issued the definitive version of IFRS 9 replacing IAS 39. The principal amendments to the standard concerns a new model of "classification and measurement", impairment, hedge accounting and own liabilities. With the exception of the hedge accounting, retrospective application is required of the standard, but it is not obligatory to disclose comparative information. In relation to the hedge accounting, the standard is generally applied prospectively, with some limited exceptions. IFRS 9 entered into force from January 1, 2018 and the company has applied the new standard from the date of obligatory application.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The standard introduces the need to undertake a business model analysis to define the classification of the financial instruments. The business model of a company reflects how financial instruments are managed in order to generate cash flows; its business model indicates if the cash flows are due to contractual cash flows, to sales or both. This assessment is made on the basis of expected future scenarios.
From evaluations undertaken it emerged that the principal impacts relate to the classification model of the financial assets and liabilities which up to December 31, 2017 were classified in the category "AFS" as this category is no longer included under IFRS 9 and the adoption of the impairment model of predictive financial assets which did not result in any impact on shareholders' equity and on the 2017 result.
As already illustrated in the 2017 Annual Report, the company does not have any significant income statement and statement of financial position effects following the adoption of the new rules within the standard, including the new hedge accounting model. Given the insignificance of the IFRS 9 effects the company did not restate the comparative figures.
For further information, reference should be made to Note 4 and Note 10.
IFRS 15 was issued in May 2014 and introduces a new model in five steps applied to revenues from contracts with customers from January 1, 2018. Based on IFRS 15, in fact, it is necessary to analyse the contracts and the relative accounting effects through the following five steps:
IFRS 15 provides for the recognition of revenues for an amount which reflects the payment which the company considers to have the right to in exchange for the transfer of goods or services to the customer. The new standard replaces IAS 11, IAS 18 and the relative interpretations and is applied to all revenues from contracts with customers, unless these contracts are within the scope of other standards. The company applies the new standard from the obligatory application date, adopting the modified retrospective method.
Within the assessment process of the accounting effects deriving from the adoption of the new standard initiated during 2016 and 2017, through the analysis undertaken on both Aeroporto Guglielmo Marconi di Bologna S.p.A. and the other subsidiaries of the Group, the following revenue streams were identified:
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
In summary there were no effects identified deriving from the adoption of IFRS 15 on the statement of financial position, income statement and financial position of the company, with the exception of the reclassification of "one-off" promotional incentives, such as incentives for the start-up of new flights, up to December 31, 2017 recorded under costs for services provided to carriers and classified from January 1, 2018 as a direct reduction of airport fee revenues, as already applied for the variable incentives recognised based on traffic. Relating to the year 2018, this concerns Euro 83 thousand compared to Euro 142 thousand in the previous year. This reclassification did not however have any impact on shareholders' equity and on the 2017 company profit.
For further information reference should be made to Note 24.
On June 21, 2016, the IASB published the amendments to the standard, with the aim of clarifying how to account for certain types of share-based payment transactions. The amendments concern: (i) the effects of "vesting conditions" and "non-vesting conditions" with regard to the valuation of cash-settled share-based payments; (ii) share-based payment transactions with a net settlement function for withholding tax obligations (iii) an amendment to the terms and conditions of a share-based payment that changes the transaction's classification from cash-settled to equity-settled. The amendments are applicable from January 1, 2018; although early application is permitted, the company adopted these amendments prospectively from January 1, 2018 and no effects arose in the consolidated half-year financial statements or on the disclosures following the adoption of these amendments.
The series of improvements, issued in December 2016, concerned the elimination of short-term exemptions provided for First Time Adoption by IFRS 1, the classification and measurement of equity investments valued at fair value and recognised in the income statement in accordance with IAS 28 - Investments in Associates and Joint Ventures, and clarification on the scope of disclosures required by IFRS 12 – Disclosure of Interests in Other Entities. The application of the amendments is obligatory for financial years ending after January 1, 2017 and January 1, 2018. The company adopted these improvements from the obligatory effective date and no effects arose on the consolidated half-year financial statements or on the disclosures in the notes.
On December 8, 2016, IASB published this interpretation which concerns foreign currency transactions paid or received in advance. These amendments were adopted by the company at the obligatory effective date (January 1, 2018) and had no impact on the consolidated half-year financial statements and on the disclosures in the notes.
The amendments clarify when an entity should transfer a property, including property under construction or development, into or out of the category "Investment property". It clarifies that a change in the intended use does not occur due to a simple change in management's intentions. The introduction of these amendments had no impact on the consolidated half-year financial statements of the company.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
Excluded from the list are the amendments to IFRS 4 - Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts as they do not concern the activities undertaken by the company.
IFRS 16 was published in January 2016 and replaces IAS 17 Leasing, IFRIC 4 Determining whether an arrangement contains a lease, SIC 15 Operating leases - Incentives and SIC 27 Evaluating the substance of transactions in the legal form of a lease.
The scope of application of the new standard, which will enter into force from January 1, 2019, concerns all leasing contracts, with some exceptions. The accounting method of all leasing reassumes the model under IAS 17, although excluding leasing for insignificant amounts (e.g. computers) and short-term lease contracts (i.e. lower than 12 months). At the recognition date of the lease it is necessary to recognise the liability for the lease instalments and the asset for which the entity has the right of utilisation, separately recognising the financial expenses and depreciation relating to the asset. The liability may be remeasured (for example changes in the contractual terms or changes in indices related to the payment of the instalments) and this change must be recorded on the underlying asset. From the lessor's viewpoint the accounting model is substantially unchanged from the current IAS 17. The application of the standard must be applied under the modified retrospective method, while early application is permitted simultaneous with IFRS 15.
As illustrated in the paragraph relating to IFRS 15, AdB has underwritten leasing contracts as lessor with the sub-license of airport areas and spaces to its customers and also has undertaken leasing contracts as lessee for equipment, plant, machinery, automotive vehicles and land; reference should be made to the paragraph on Commitments and risks for the amount of the minimum lease payables and receivables which the company has contractually undertaken for the coming years. It is not expected that the new standard will be applied in advance.
The implementation process for the Standard, involving set-up of the IT infrastructure for the accounting management and the alignment of the administrative and control processes applicable to the critical areas governed by the Standard, is in the process of being completed.
The company has elected to apply the standard retrospectively from January 1, 2019 (modified retrospective method). With regards to contract assets, there are no changes in the new standard compared to the current accounting method. From a leasee viewpoint, Adb expects an increase in EBITDA for the reclassification of leasing expenses for hire and rental to the accounts depreciation and financial expenses and a decrease in the Net Financial Position for the recording of the lease payables under trade payables. From the analysis undertaken to-date, the estimate of the impact is as follows:
| Initial recognition and | Usage right capitalised in assets |
€ 2.077K |
|---|---|---|
| valuation in balance sheet | Financial liabilities recognised to liabilities |
$-62.077K$ |
| Valuation equal to present value of future charges | ||
| Hire charges | $-6557K$ | |
| To income statement | Amortisation usage right | € 544K |
| Interests on leasing | € 46K | |
In thousands of Euro
Aeroporto Guglielmo Marconi di Bologna S.p.A. 160
In addition, reference should be made to Note 31 for disclosures on minimum leasing payments required by IAS 17.
(applicable from financial years ending after January 1, 2019).
This allows companies to measure specific prepayments on financial assets through the so-called negative compensation at amortised cost or at fair value from "other comprehensive income" in the case where a specific condition is met, rather than at the fair value of the income statement. The impacts of these amendments on the consolidated financial statements are currently under evaluation.
At the date of authorisation of these consolidated financial statements, the competent bodies of the European Union have not yet completed the endorsement process relating to the new standards and amendments applicable to the financial statements for years that commence from January 1, 2019 and illustrated below:
(applicable from financial years ending after January 1, 2019).
The interpretation clarifies the applications of the requirements for recognition and measurement in IAS 12 - "Income taxes" in the case of uncertainty on the treatment of income taxes. The Interpretation concerns specifically: (i) the case in which an entity considers separately the uncertain fiscal treatment, (ii) the assumptions which an entity makes on the review of the fiscal treatment by the tax authorities, (iii) how an entity determines assessable income (or fiscal loss), assessable base, fiscal losses not utilised, tax credits not uitlised and tax rates and (iv) in what manner an entity considers changes of facts and circumstances. The Interpretation does not add new disclosure requirements, however outlines the existing requirements in IAS 1 relating to disclosure on opinions, information on assumptions of facts and other estimates and information on tax under/over accruals within AS 12 "Income taxes". The interpretation provides a choice between two transition models: (i) retroactive application which utilises IAS 8 - "Accounting policies, changes in accounting estimates and errors", only if the application is possible, or (ii) retroactive application with cumulative effect of the initial application recorded as an adjustment to shareholders' equity at the date of the initial application and without remeasurement of the comparative information. The date of the initial application is the beginning of the annual reference period in which an entity applies the interpretation for the first time. No significant effect is expected on the company consolidated financial statements from the application of the new standard.
(applicable from financial years ending after January 1, 2019).
This clarifies how the entity should use IFRS 9 to represent long-term interests in an associate company or joint venture, for which the equity method is not applied. No significant effect is expected on the company consolidated financial statements from the application of the new standard.
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In December 2017, the IASB also issued Annual Improvements to IFRS 2015-2017, a series of amendments to IFRS in response to issues raised, mainly: (I) to IFRS 3 - Business Combinations, clarifying how a company must re-measure holdings, previously held in a joint operation, once control of the business is obtained; (II) to IFRS 11 – Joint Arrangements, for which a company does not re-value holdings previously held in a joint operation when it obtains joint control of the activity, (III) to IAS 12 - Income Tax, which clarifies that the impact on income tax deriving from dividends (that is, the distribution of profits) should be recognised in the income statement, regardless of how the tax arises; (IV) and to IAS 23 – Borrowing costs, which clarifies that a company is to treat as part of a general debt any debt originally assumed for the development of an asset when this asset is ready for its intended use or for sale. The changes will be effective from January 1, 2019 and significant effects are not expected on the company financial statements.
In February 2018, the IASB issued amendments to IAS 19 which specifies how companies should determine the pension payable when changes to a given pension plan occur. IAS 19 "Employee Benefits" specifies how a company should account for a defined benefit pension plan. When a change is made to a plan, an adjustment, a reduction or a regulation, IAS 19 requires that the net defined benefit asset or liability is to be re-measured. The changes require a company to use the updated assumptions from this recalculation to determine the cost of the current service and the net interest for the remainder of the reference period after the plan is changed. The amendments will enter into force from January 1, 2019. The Group is currently evaluating the impacts on the consolidated financial statements.
The IASB issued on March 29, 2018 a revised version of the Conceptual Framework of the financial statements which includes the accounting standards IFRS. This instrument guarantees that the accounting standards are conceptually correct and that transactions of the same type are treated in the same manner, providing useful information to investors and other stakeholders. The Conceptual Framework helps in addition, businesses to implement adequate accounting policies when no IFRS standard disciplines the specific transaction; in addition, it assists the stakeholders in general to understand the accounting standards. The Conceptual Framework modified includes: a new chapter on the measurement and reporting rules of the financial results; more precise definitions and rules - in particular the definition of liabilities; clarifications on important issues, such as the rules on administration, prudence and uncertainty of calculations in the financial reporting. The amendments will enter into force from January 1, 2020.
On October 22, 2018, the IASB published, in the updated version of IFRS 3 - Business combinations, the amendment to the definition "business". The new definition highlights that the purpose of the business is to provide products and services to clients, while the previous definition focused on the purpose to produce income in the form of dividends, lower costs or other economic benefits for the investors or other parties. The distinction between business and company is fundamental, in that the recognition of goodwill may occur only following the acquisition of a business. The companies apply to the business combinations the new definition of business to transactions whose date is on or subsequent to January 1, 2020.
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On October 31, 2018, the IASB published this amendment and clarified in IAS 1 "Presentation of Financial Statements" and in IAS 8 "Accounting policies, changes in accounting estimates and errors" the definition of "significant" and aligned this definition to that utilised in the Conceptual framework and in the IFRS. A disclosure is significant if its omission or erroneous measurement may reasonably influence decisions which the principal users of the financial statements make on the basis of the financial statements. The amendments will enter into force from January 1, 2020.
IFRS 17 - Insurance contracts are excluded from the list since this accounting standard does not pertain to the activity carried out by Adb.
The preparation of the financial statements requires the directors of the Company to undertake discretional valuations, estimates and assumptions which impact upon the amount of revenue, costs, assets and liabilities and related disclosures, as well as potential liabilities. The uncertainty concerning these assumptions and estimates could result in significant changes in the book value of these assets and/or liabilities in the future.
Some elements in the financial statements may not be measured with precision and therefore are subject to estimates which depend on future and uncertain conditions of the company's operations. These estimates over time will incur revision to take into account data and information which is available subsequent to the initial estimates. The effect of the change of accounting estimates must be recorded prospectively in the year in which they occur, including them in the economic result of the year and of future years, where the change also affects this latter. The prospective recognition of the effects of the estimates means that the changes are applied to the transactions on the change in the estimate. The revision or change in the accounting estimate arises from new information or new developments in operating activities and for this reason they do not represent a correction of errors.
The errors of previous years are omissions and incorrect measurements of accounts in the financial statements of an entity for one or more years deriving from the non-utilisation or the erroneous utilisation of reliable information which was available when the financial statements were authorised for their publication and it is reasonable to consider that such information could have been obtained and utilised in the preparation and presentation of these financial statements. These errors include the effects of arithmetic errors, errors in the application of accounting policies, inaccuracies or distorted interpretations of facts, and fraud. The financial statements are not in accordance with IFRS if they contain significant errors or irrelevant if committed intentionally in order to obtain a specific presentation of the statement of financial position, of the economic result or of the cash flows of the entity. Potential errors of the current year, recorded in the same year, are corrected before the financial statements are authorised for publication. The errors uncovered in subsequent years, if considered significant and if the correction is considered feasible, must be corrected in the comparative disclosure presented in the financial statements for the following year, remeasuring the opening balances of assets, liabilities and shareholders' equity (restatement).
The restatement is not applied and the error is not recorded using the prospective method where the errors and the omissions are considered insignificant.
Omissions or incorrect measurements of accounts are recorded if, individually or overall, they may impact the economic decisions of the readers of the financial statements. The restatement depends on the size and nature of the omission or incorrect measurement assessed depending upon the circumstances.
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This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The key assumptions undertaken by management and which have the most significant effect on the reported amounts or have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below. The company based its estimates and assumptions on information available at the preparation date of the consolidated financial statements. However, the current circumstances and assumptions on future developments may alter due to changes in the market and events outside of the Company's control. These changes, where occurring, are reflected in the assumptions.
Reference should be made to that previously illustrated in the standard "impairment of non-financial assets" and that illustrated below in Note 1-Intangible Assets.
The company records investment property at cost, which approximates the fair value of the investment properties given their particular nature (absence of a comparable active market).
The company provides in the Notes the fair value of the financial instruments. When the fair value of a financial asset or financial liability may no longer be measured based on the prices on an active market, the fair value is determined utilising various valuation techniques, including the discounted cash flow model. The inputs inserted in this model are recorded from observable markets, where possible, but when this is not possible, a certain level of estimation is required to define the fair values. The estimates include considerations on variables such as the liquidity risk, the credit risk and volatility. The changes of the assumptions on these elements may have an impact on the fair value of the financial instrument recorded.
The company in the analysis of subsequent events to the reporting date analyses the conditions on which it is necessary to make changes on the accounting data and relative disclosures, depending on whether this concerns events occurring after the reporting date:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 164
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The following table breaks down intangible assets at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Concession rights | 161,148 | 151,212 | 9,936 |
| Software, licences and similar rights | 1,611 | 1,105 | 506 |
| Other intangible assets | 65 | 71 | (6) |
| Energy Certificates | 0 | 321 | (321) |
| Other intangible assets in progress | 373 | 286 | 87 |
| TOTAL INTANGIBLE ASSETS | 163,197 | 152,995 | 10,202 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 165
The table below shows the changes in intangible assets for the period ended December 31, 2018 compared to December 31, 2017, by intangible asset category.
| 31.12.2017 | Changes of the year | 31.12.2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| in thousands of Euro | Historical cost |
Accumulated amortisation |
Book value | Increases / Acquisitions |
Amortisation | Decreases / Disposals Write-downs |
Decrease provision |
Historical cost |
Accumulated amortisation |
Book value |
| Concession rights | 179,975 | (28,763) | 151,212 | 15,620 | (5,562) | (616) | 494 | 194,979 | (33,831) | 161,148 |
| Software, licences and similar rights | 9,859 | (8,754) | 1,105 | 1,820 | (1,314) | 0 | 0 | 11,679 | (10,068) | 1,611 |
| Other intangible assets | 100 | (29) | 71 | 0 | (6) | 0 | 0 | 100 | (35) | 65 |
| Energy Certificates | 321 | 0 | 321 | 68 | 0 | (389) | 0 | 0 | 0 | 0 |
| Other intangible assets in progress | 286 | 0 | 286 | 89 | 0 | (2) | 0 | 373 | 0 | 373 |
| TOTAL INTANGIBLE ASSETS | 190,541 | (37,546) | 152,995 | 17,597 | (6,882) | (1,007) | 494 | 207,131 | (43,934) | 163,197 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 166
Concession rights increased at December 31, 2018 by Euro 15.6 million (equal to the fair value of construction services provided in the year), principally due to:
Finally, in 2018, definitive and executive engineering operations commenced for works execution and management with regard to the protection of buildings currently used by State Agencies, while the definitive engineering design works for the multilevel car park close to the eastern area of the airport was concluded.
Amortisation of concession rights in the year amounted to Euro 5.56 million and was applied according to the residual duration of the concession, alongside write-downs of Euro 97 thousand for projects no longer realisable.
Software, licenses and similar rights increased Euro 1.82 million. This increase principally concerns:
The increase in the account "Energy certificates" concerns the valuation of 194 White Certificates relating to the Trigeneration plant, recorded under Other revenues and income in the Income Statement.
Other intangible assets in progress includes software development not concluded at December 31, 2018, among which we highlight the modernisation of the GSTAR operating system.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 167
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
For financial year 2018, impairment tests were undertaken to assess the existence of impairments regarding the amounts recognised to Concession rights.
The impairment test, as per IAS 36, compares the carrying value of the asset or group of assets of the cash generating unit (CGU) with the recoverable value, arising from the higher between the fair value (net of selling costs) and the discounted net cash flows which are expected to be produced from the asset or group of assets of the CGU (value in use).
For impairment testing purposes, the company has identified a single CGU which coincides with the Aeroporto G. Marconi Group.
For the analysis outlined above, the cash flows were taken from the 2019-2044 economic-financial projections formulated by the Board of Directors of February 21, 2019. This latter also approved the methodology relating to the impairment test.
These operating cash flows was discounted utilising the UDCF (Unlevered Discounted Cash Flow) at a rate equal to the weighted average cost of debt and own funds (WACC - Weighted Average Cost of Capital), equal to 6.75%.
This method is based on the presumption that the economic capital value of a company at a certain date (in the present case December 31, 2018) is representative of the algebraic sum of the following elements:
The test performed did not identify any impairment of the carrying amounts of Concession rights for 2018.
An impairment test simulation was also undertaken considering in the determination of the WACC a duration of the interest rates (free risk rate and swap rate) of 30 years, a duration which approximates the residual duration of the airport concession. Also in these cases, the test did not result in any impairment. For further details, reference should be made to that detailed at Note 1 of the Consolidated Financial Statements.
The following table breaks down tangible assets at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Land | 2,763 | 2,763 | 0 |
| Buildings, light constructions and improvements | 4,124 | 4,473 | (349) |
| Machinery, equipment & plant | 2,867 | 3,131 | (264) |
| Furniture, EDP and transport | 2,140 | 1,918 | 222 |
| Tangible fixed assets in progress | 2,979 | 2,156 | 823 |
| Investment property | 4,732 | 4,732 | 0 |
| TOTAL TANGIBLE ASSETS | 19,605 | 19,173 | 432 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 168
The table below shows the changes in tangible assets for the period ended December 31, 2018 compared to December 31, 2017, by asset category.
| 31.12.2017 | Changes of the year | 31.12.2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| in thousands of Euro | Historical cost |
Accumulated depreciation |
Book value | Increases / Acquisitions |
Depreciation | Decreases/ Disposals/ Impairment |
Decrease provision |
Historic cost | Accumulated depreciation |
Book value |
| Land | 2,763 | 0 | 2,763 | 0 | 0 | 0 | 0 | 2,763 | 0 | 2,763 |
| Buildings, light constructions and improvements | 8,344 | (3,871) | 4,473 | 67 | (416) | 0 | 0 | 8,411 | (4,287) | 4,124 |
| Machinery, equipment & plant | 12,727 | (9,596) | 3,131 | 874 | (1,135) | (26) | 23 | 13,574 | (10,707) | 2,867 |
| Furniture, EDP and transport | 8,344 | (6,425) | 1,918 | 840 | (615) | (70) | 65 | 9,115 | (6,975) | 2,140 |
| Tangible fixed assets in progress | 2,156 | 0 | 2,156 | 823 | 0 | 0 | 0 | 2,979 | 0 | 2,979 |
| Investment property | 4,732 | 0 | 4,732 | 0 | 0 | 0 | 0 | 4,732 | 0 | 4,732 |
| TOTAL TANGIBLE ASSETS | 39,066 | (19,892) | 19,173 | 2,604 | (2,166) | (96) | 88 | 41,574 | (21,969) | 19,605 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 169
In 2018, this category increased overall by Euro 2.6 million and mainly concerns, in addition to furniture and EDP, the purchase and installation of:
Tangible fixed assets in progress include amounts incurred for projects not concluded at December 31, 2018, among which the first two tranches totalling Euro 1.78 million of the contributions granted to Marconi Express Spa for the construction of the People Mover "Airport" station following completion of 66% of the airport area works, in addition to works in progress on the footbridge.
Investment property includes the total value of land owned by the company earmarked for the construction of investment property; these amounts were initially recorded at purchase cost and subsequently measured using the cost method.
This land is not subject to amortisation but, as per IAS 40, a technical report is undertaken to support the fair value. The technical report undertaken internally by the Parent Company confirms that the value of the inscription cost approximates, for nature and strategic value of the investment, its fair value. At the preparation date of the consolidated financial statements, there were no impairment indicators on these assets.
The following table breaks down the investments at December 31, 2018 (compared with December 31, 2017) and the relative movements in the year.
| in thousands of Euro | As at 31.12.2017 |
Increases / Acquisitions |
Decreases / Disposals |
Write-downs | As at 31.12.2018 |
|---|---|---|---|---|---|
| Investments in subsidiaries | 684 | 2,463 | 0 | 0 | 3,147 |
| Investments in associates | 0 | 0 | 0 | 0 | 0 |
| Other investments | 42 | 0 | 0 | 0 | 42 |
| TOTAL INVESTMENTS | 726 | 2,463 | 0 | 0 | 3,189 |
On October 2, the Parent Company finalised the acquisition of 49% of TAG Bologna S.r.l., which is now therefore wholly-owned; the increase indicated in the table above represents the acquisition cost of this investment, plus direct accessory costs.
The following table breaks down investments in subsidiaries at the end of the two comparative years:
| in thousands of Euro | Holding | As at 31.12.2018 |
As at 31.12.2017 |
Change |
|---|---|---|---|---|
| Fast Freight Marconi Spa | 100% | 597 | 597 | 0 |
| Tag Bologna Srl | 100% | 2,550 | 87 | 2,463 |
| TOTAL INVESTMENTS IN SUBSIDIARIES | 3,147 | 684 | 2,463 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 170
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The following table presents investments in associates:
| in thousands of Euro | Quota | As at 31.12.2018 |
As at 31.12.2017 |
Change |
|---|---|---|---|---|
| Ravenna Terminal Passeggeri Srl | 24% | 0 | 0 | 0 |
The Share Capital of the associate Ravenna Terminal Passeggeri Srl was reduced for losses from Euro 300 thousand to Euro 165 thousand by the Shareholders' Meeting of April 4, 2017. This transaction has no impact on the financial statements of AdB as the value of the investment was fully written down in previous years.
Finally, the following table breaks down investments in other companies in the two comparative years:
| in thousands of Euro | Quota | As at 31.12.2018 |
As at 31.12.2017 |
Change |
|---|---|---|---|---|
| Consorzio Energia Fiera District | 7.14% | 2 | 2 | 0 |
| CAAF dell'Industria Spa | 0.07% | 0 | 0 | 0 |
| Bologna Welcome Srl | 10% | 40 | 40 | 0 |
| TOTAL OTHER INVESTMENTS | 42 | 42 | 0 |
The investment in Bologna Congressi Spa was reclassified to Assets held-for-sale (note 12), to which reference should be made.
Investments held at December 31, 2018 are broken down below, with indication of the holding and the relative carrying amount.
| in thousands of Euro | Reg office |
Currency | % holding | Share capital 31.12.2018 |
Profit (loss) for the year 2018 |
Shareholders' equity 31.12.2018 |
Portion Shareholders' Equity |
Carrying amount |
Difference |
|---|---|---|---|---|---|---|---|---|---|
| Fast Freight Marconi Spa | Bologna | Euro | 100% | 520 | 567 | 4,694 | 4,694 | 597 | 4,096 |
| Tag Bologna Srl | Bologna | Euro | 100% | 316 | 102 | 873 | 873 | 2,550 | (1,676) |
| TOTAL INVESTMENTS IN SUBSIDIARIES | 3,147 |
| in thousands of Euro | Reg. office |
Currency | % holding | Share capital 31.12.2018 |
Profit (loss) for the year 2018 |
Shareholders' equity 31.12.2018 |
Portion Shareholders' Equity |
Carrying amount |
Difference |
|---|---|---|---|---|---|---|---|---|---|
| Ravenna Terminal Passeggeri Srl | Ravenna | Euro | 24% | 165 | 166 | 40 | 40 |
| in thousands of Euro | Reg. office |
Currency | % holding | Share capital 31.12.2018 |
Profit (loss) for the year 2018 |
Shareholders' equity 31.12.2018 |
Portion Shareholders' Equity |
Carrying amount |
Difference |
|---|---|---|---|---|---|---|---|---|---|
| Consorzio Energia Fiera District | Bologna | Euro | 7.14% | 32 | 32 | $\overline{0}$ | |||
| CAAF dell'Industria Spa | Bologna | Euro | 0.07% | 378 | 668 | ٥ | 0 | $\overline{0}$ | |
| Bologna Welcome Srl | Bologna | Euro | 10% | 310 | 82 | 452 | 45 | 40 | |
| TOTAL OTHER INVESTMENTS | 42 |
The figures relating to the shareholders' equity and the profit of Ravenna Terminal Passeggeri S.r.l., Consorzio Energia Fiera District and Bologna Welcome S.r.l. concern financial year 2017 (latest approved financial statements).
The figures relating to the shareholders' equity and the profit of CAAF dell'Industria S.p.A. relate to the financial year ending August 31, 2018.
The negative difference concerning the subsidiary TAG Bologna S.r.l. is not considered an impairment.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 171
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The following table shows the movements in other non-current financial assets for the year ended December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at Increases/ 31.12.2017 Acquisitions |
Decreases / Reclass. |
Write-downs | As at 31.12.2018 |
|
|---|---|---|---|---|---|
| Equity Financial Instruments | 10,000 | 873 | 0 | 0 | 10,873 |
| Deposit accounts/ Savings bonds | 8,000 | 5,000 | (8,000) | 0 | 5,000 |
| Other non-current financial assets | 257 | 5 | 0 | 0 | 262 |
| TOTAL OTHER NON-CURRENT FINANCIAL ASSETS | 18,257 | 5,878 | (8,000) | 0 | 16,135 |
At December 31, 2018 the account "Other non-current financial assets" mainly comprises:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 172
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The following table presents the movements in deferred tax assets for the year ended December 31, 2018 compared with December 31, 2017.
| in thousands of Euro | As at 31.12.2017 | Provisions | Util./Reclass. | As at 31.12.2018 |
|---|---|---|---|---|
| DEFERRED TAX ASSETS | 6,487 | 837 | (1,502) | 5,822 |
The tables below outline the breakdown of the items resulting in the recognition of deferred tax assets, broken down between IRES and IRAP.
In particular:
| IRES rate 24.% | Assessable | Tax | ||||||
|---|---|---|---|---|---|---|---|---|
| in thousands of Euro | at 31.12.2017 | Increases | Uses | at 31.12.2018 | at 31.12.2017 | Increases | Uses | at 31.12.2018 |
| Other costs IRES deferred deductibility | 7,520 | 2,506 | (2,491) | 7,535 | 1,804 | 602 | (598) | 1,808 |
| Provision for doubtful accounts | 829 | 30 ° | 859 | 199 | ∍ | 206 | ||
| IRES deferred tax provisions | 1,246 | 284 | (2) | 1,528 | 299 | 68 | $\bf{0}$ | 367 |
| Provision for renewal of airport infrastructure | 10,962 | (567) | 10,395 | 2,630 | (135) | 2,495 | ||
| Amortisation concess. rights from ENAC-ENAV agreement | 235 | (14) | 221 | 57 | (4) | 53 | ||
| Listing costs | 1,849 | (925) | 924 | 444 | (222) | 222 | ||
| Discounting severance prov. plus other Long-term | ||||||||
| personnel costs | 462 | 53 | (179) | 336 | 82 | 13 | (43) | 52 |
| Total IRES | 23,103 | 2,873 | (4, 178) | 21,798 | 5,515 | 690 | (1,002) | 5,203 |
| IRAP rate 4.2% | Assessable | Tax | ||||||
|---|---|---|---|---|---|---|---|---|
| in thousands of Euro | at 31.12.2017 | Increases | Uses | at 31.12.2018 | at 31.12.2017 | Increases | Uses | at 31.12.2018 |
| IRAP deferred tax provisions | 424 | (3) | 421 | 18 | 18 | |||
| Provision for renewal of airport infrastructure | 12,974 | 3,504 | (4,521) | 11,957 | 545 | 147 | (190) | 502 |
| Amortisation concess. rights from ENAC-ENAV agreement | 163 | (14) | 149 | (1) | 6. | |||
| Discounting other Long-term personnel costs | 118 | 53 | (53) | 118 | ||||
| Total IRAP | 13,679 | 3,557 | (4,591) | 12,645 | 575 | 147 | (191) | 531 |
The following table on the other hand shows the tax credits, within AdB, for the utilisation of the fiscal benefits in relation to: interventions for energy recovery; capex investments as per Article 18 of Law-Decree No. 91/2014; R&D investments as per Article 1, paragraph 35 of Law No. 190/2014. In relation
Aeroporto Guglielmo Marconi di Bologna S.p.A. 173
to the utilisation of the R&D tax credits, the company in 2018 did not continue its research and development activities, rather focusing on projects which would increase the performance of the IT infrastructure and on the consolidation of activities already commenced. The objective taking into account also the Investment Plan is to continue the research activities in 2019 and 2020.
| Other | Tax Credit | ||||||
|---|---|---|---|---|---|---|---|
| in thousands of Euro | As at 31.12.2017 | Increases | Uses | As at 31.12.2018 |
|||
| Other Receivables | 397 | 0 | (309) | 88 | |||
| Total "Other credits" | 397 | 0 | (309) | 88 |
The following table breaks down other non-current assets at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Security deposits | 47 | 43 | 4 |
| Accrued income and prepayments | 59 | 102 | (43) |
| Tax receivables | 1,317 | 1,305 | 12 |
| OTHER NON-CURRENT ASSETS | 1,423 | 1,450 | (27) |
The other non-current assets do not present significant movements. The main account principally concerns the receivable recognised in 2012 following the presentation of the IRES reimbursement request for the non-deduction of IRAP on personnel costs (Legislative Decree 201/2011 and Tax Agency Decision No. 2012/140973 of 2012), including the portions concerning the subsidiaries Tag Bologna and Fast Freight Marconi and the former subsidiary Marconi Handling (now GH Bologna).
The following table breaks down inventories at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | |
|---|---|---|---|
| Inventories of raw materials, supplies and consumables | 527 | 488 | 39 |
| INVENTORIES | 527 | 488 | 39 |
Ancillary and consumable inventories did not change significantly and concern mainly inventories held of workshop materials and consumables, such as stationary and printing, in addition to heating fuel and deicing liquid for the runway.
The table below illustrates the trade receivables and the relative doubtful debt provision:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 174
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | |
|---|---|---|---|
| Trade receivables | 14,670 | 13,434 | 1,236 |
| Provisions for doubtful accounts | (911) | (873) | (38) |
| TRADE RECEIVABLES | 13,759 | 12,561 | 1,198 |
At December 31, 2018 trade receivables for Euro 13.8 million were recorded net of the provision for doubtful accounts of Euro 0.9 million, whose valuation was impacted, although not significantly, by the new accounting standards and in particular IFRS 9 with the adoption from January 1, 2018 of the Provision Matrix method. As illustrated in the Notes to the 2017 Annual Report concerning the new accounting standards, the impact is not significant considering the most significant part of the provision comprises write-downs based on specific analysis of overdue amounts and/or disputes, whose probability of recovery is estimated also through the support of legal advisors and taking into account guarantees received from clients. On the residual debtor balance, classified by customer category and overdue period, the simplified parameter method was applied permitted by IFRS 9 to companies with a diversified and fragmented client portfolio.
The movements in the provision for doubtful accounts in the year and in the previous year were as follows:
| in thousands of Euro | As at 31.12.2017 |
Provisions | Uses | Releases | As at 31.12.2018 |
|---|---|---|---|---|---|
| PROVISIONS FOR DOUBTFUL ACCOUNTS | (873) | (75) | 12 | 25 | (911) |
| in thousands of Euro | As at 31.12.2016 |
Provisions | Uses | Releases | at 31.12.2017 |
| PROVISIONS FOR DOUBTFUL ACCOUNTS | (1,334) | (359) | 759 | 61 | (873) |
The following tables provide an analysis of the aging of trade receivables of the company at December 31, 2018 and December 31, 2017:
| in thousands of Euro | Falling due | Past due | Total as at 31.12.2018 |
|---|---|---|---|
| Trade receivables for invoices/credit notes issued | 8,273 | 6,367 | 14,640 |
| Trade receivables for invoices/credit notes to be issued | 30 | 0 | 30 |
| TOTAL TRADE RECEIVABLES | 8,303 | 6,367 | 14,670 |
| in thousands of Euro | Not yet due | Overdue 0-30 |
Overdue 30-60 |
Overdue 60-90 |
Overdue beyond 90 |
Total |
|---|---|---|---|---|---|---|
| TRADE RECEIVABLES | 8,273 | 3,745 | 793 | 385 | 1,444 | 14,640 |
| in thousands of Euro | Falling due Overdue |
Total as at 31.12.2017 |
|
|---|---|---|---|
| Trade receivables for invoices/credit notes issued | 7,939 | 5,485 | 13,424 |
| Trade receivables for invoices/credit notes to be issued | 10 | 0 | 10 |
| TOTAL TRADE RECEIVABLES | 7,949 | 5,485 | 13,434 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 175
| in thousands of Euro | Not yet due | Overdue 0-30 |
Overdue 30-60 |
Overdue 60-90 |
Overdue beyond 90 |
Total |
|---|---|---|---|---|---|---|
| TRADE RECEIVABLES | 7,939 | 3,085 | 848 | 102 | 1,450 | 13,424 |
The following table breaks down other current assets at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| VAT receivables | 0 | 175 | (175) |
| Other tax receivables | 3 | 26 | (23) |
| Tax consolidation receivables | 0 | 16 | (16) |
| Receivables from employees | 88 | 73 | 15 |
| Other receivables | 4,267 | 3,680 | 587 |
| OTHER CURRENT ASSETS | 4,358 | 3,970 | 388 |
The breakdown of "other receivables" is as follows:
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Prepayments and accrued income | 281 | 287 | (6) |
| Advances to suppliers | 98 | 12 | 86 |
| Pension and social security institutions | 53 | 58 | (5) |
| Municipal surtax receivables | 4,539 | 3,899 | 640 |
| Other current receivables provision for doubtful accounts | (1,088) | (1,085) | (3) |
| Other current receivables | 384 | 509 | (125) |
| TOTAL OTHER RECEIVABLES | 4,267 | 3,680 | 587 |
The account "other current receivables provision for doubtful accounts" includes the provision for municipal surtax doubtful accounts obtained for reclassification under assets in the statement of financial position, as a deduction of the respective receivable, of the municipal surtax to the carriers which in the meantime were subject to administration procedures or which contested the charge. This account:
| in thousands of Euro | As at 31.12.2017 |
Provisions/Increases | Uses Releases |
As at 31.12.2018 |
|
|---|---|---|---|---|---|
| Provision for municipal surtax doubtful accounts | (1,085) | (13) | 0 | 10 | (1,088) |
| TOTAL PROVISIONS FOR OTHER DOUBTFUL ACCOUNTS | (1,085) | (13) | 0 | 10 | (1,088) |
The following table breaks down current financial assets at December 31, 2018 (compared with December 31, 2017).
Aeroporto Guglielmo Marconi di Bologna S.p.A. 176
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Bonds | 0 | 4,574 | (4,574) |
| Deposit accounts | 11,000 | 15,000 | (4,000) |
| Other financial receivables | 37 | 36 | 1 |
| CURRENT FINANCIAL ASSETS | 11,037 | 19,610 | (8,573) |
The changes in the period in other current financial assets are illustrated in the table below.
| in thousands of Euro | As at 31.12.2017 |
Acquisitions | Other increases Reclassifications |
Decreases / Disposals |
As at 31.12.2018 |
|---|---|---|---|---|---|
| Bonds | 4,574 | 0 | 0 | (4,574) | 0 |
| Deposit accounts | 15,000 | 3,000 | 8,000 | (15,000) | 11,000 |
| Other financial receivables | 36 | 0 | 1 | 0 | 37 |
| TOTAL OTHER CURRENT FINANCIAL ASSETS | 19,610 | 3,000 | 8,001 | (19,574) | 11,037 |
In detail:
This category of financial investments also meets the company's temporary needs to invest liquidity in order to obtain the contractual cash flows. As per IFRS 9, these investments are classified in the category "Held to collect - HTC". The contractual maturity defined, the yield defined and calculated on the notional amount permits the passing of the SPPI tests and therefore the valuation at amortised cost in continuity with that undertaken in previous years in application of IAS 39.
The movements in the year were also due to the following:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 177
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The following table breaks down cash and cash equivalents at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Bank and postal deposits | 12,803 | 13,925 | (1,122) |
| Cash in hand and similar | 22 | 22 | 0 |
| CASH AND CASH EQUIVALENTS | 12,825 | 13,947 | (1,122) |
"Bank and postal deposits" represent the bank current account balances available.
The following table shows the breakdown of the assets held-for-sale:
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | |
|---|---|---|---|
| Investment in Bologna Congressi Spa | 0 | 117 | (117) |
| ASSETS HELD-FOR-SALE | 0 | 117 | (117) |
At December 31, 2017 this account comprises the investment of 10% in Bologna Congressi Spa, which was sold on February 23, 2018 to Bologna Fiera Spa, majority shareholder of Bologna Congressi spa. At December 31, 2017, the capital profit of Euro 0.013 million was recorded as a shareholders' equity reserve. At December 31, 2018, given the completion of the operation, the reserve was eliminated and the profit recorded under financial income in account 27 of the Income Statement.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 178
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The following table shows the breakdown of the net financial position at December 31, 2018 and December 31, 2017, in accordance with Consob Communication of July 28, 2006 and the ESMA/2011/81 Recommendations:
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | |
|---|---|---|---|
| A | Cash | 22 | 22 |
| B | Other cash equivalents | 12,803 | 13,925 |
| C | Securities held for trading | 0 | 0 |
| D | Cash and cash equivalents (A)+(B)+(C) | 12,825 | 13,947 |
| E | Current financial receivables | 11,037 | 19,610 |
| F | Current bank debt | (40) | (52) |
| G | Current portion of non-current debt | (3,920) | (5,298) |
| H | Other current financial debt | (2,050) | (1,806) |
| I | Current financial debt (F)+(G)+(H) | (6,010) | (7,156) |
| J | Net current financial position (I)-(E)-(D) | 17,852 | 26,401 |
| K | Non-current bank debt | (11,436) | (15,345) |
| L | Bonds issued | 0 | 0 |
| M | Other non-current debt | 0 | 0 |
| N | Non-current financial debt (K)+(L)+(M) | (11,436) | (15,345) |
| O | Net Financial Position (J) + (N) | 6,416 | 11,056 |
The accounts A + B are equal to the balance of the account "cash and cash equivalents"; reference should be made to note 11 for further details.
The account C + E is contained in the account "current financial assets"; reference should be made to note 10 for further details.
The accounts F + G + H are equal to the balance of the account "current financial liabilities"; reference should be made to note 23 for further details.
The account K is equal to the balance of the account "non-current financial liabilities"; reference should be made to note 18 for further details.
For a detailed analysis on the movements in the net financial position, reference should be made to the analytical analysis in the Directors' Report.
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The following table breaks down the Shareholders' Equity at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Share capital | 90,314 | 90,314 | 0 |
| Reserves | 62,821 | 61,997 | 824 |
| Profit (loss) for the year | 17,101 | 14,909 | 2,192 |
| SHAREHOLDERS' EQUITY | 170,236 | 167,220 | 3,016 |
The share capital of the Parent Company at December 31, 2018 amounts to Euro 90,314,162, entirely paidin and comprising 36,125,665 ordinary shares without par value.
The following table outlines the calculation of the basic and diluted earnings per share:
| in Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
|---|---|---|
| Group profit/(loss) for the year | 17,190,255 | 14,928,195 |
| Average number of shares outstanding | 36,125,665 | 36,125,665 |
| Average number of shares including bonus shares | 36,125,665 | 36,125,665 |
| Undiluted earnings/(losses) per share | 0.48 | 0.41 |
| Diluted earnings/(losses) per share | 0.48 | 0.41 |
(*) from Statement of Comprehensive Income
The undiluted earnings and diluted earnings per share of AdB at December 31, 2018 and at December 31, 2017 are the same due to the absence of potential dilutive instruments.
The following table breaks down the Reserves at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Share premium reserve | 25,683 | 25,683 | 0 |
| Legal reserve | 6,176 | 5,430 | 746 |
| Extraordinary reserve | 32,945 | 32,943 | 2 |
| FTA Reserve | (3,206) | (3,206) | 0 |
| Profits (losses) carried forward | 1,992 | 1,992 | 0 |
| OCI Reserve | (769) | (858) | 89 |
| Assets held for sale reserve | 0 | 13 | (13) |
| TOTAL RESERVES | 62,821 | 61,997 | 824 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 180
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
shall prevail.
The share premium reserve comprises:
Pursuant to Article 2431 of the Civil Code this reserve is available but may not be distributed until the legal reserve has reached the limit established as per article 2430 of the Civil Code.
The legal reserve and the extraordinary reserve increased due to the allocation of the profit in the previous year, net of the distribution of dividends approved by the Shareholders' Meeting of April 24, 2018 for Euro 14 million corresponding to a gross dividend of Euro 0.392 for each of the 36,125,665 ordinary shares in circulation at the dividend coupon date. The extraordinary reserve entirely comprises profits from previous years.
The OCI reserve records the changes deriving from the discounting of the Severance and other personnel provisions (see Note 14) in accordance with IAS 19 revised, net of the relative tax effect.
The following table breaks down the OCI reserve for the year ended December 31, 2018 and the comparative period:
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Actuarial gains/losses as per IAS 19 | (1,011) | (1,129) | 118 |
| Deferred taxes on actuarial gains/losses as per IAS 19 | 242 | 271 | (29) |
| OCI RESERVE | (769) | (858) | 89 |
Finally, the assets held-for-sale reserve, which at December 31, 2017 included the profit arising from the difference in the carrying value of the investment in Bologna Congressi Spa and the sales value, was eliminated due to the completion of the operation on February 23, 2018, with recognition of the higher value under financial income in the Income Statement.
The following table breaks down severance and other personnel provisions at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Severance | 3,752 | 3,943 | (191) |
| Other personnel provisions | 118 | 118 | 0 |
| SEVERANCE AND OTHER PERSONNEL PROVISIONS | 3,870 | 4,061 | (191) |
The table below shows the movements in the provisions in the period:
| in thousands of Euro | As at 31.12.2017 | Service cost |
Net interest |
Benefits paid |
Actuarial profits/(losses ) |
As at 31.12.2018 |
|---|---|---|---|---|---|---|
| Severance | 3,943 | 0 | 52 | (127) | (116) | 3,752 |
| Other personnel provisions | 118 | 79 | 1 | (78) | (2) | 118 |
| SEVERANCE AND OTHER PERSONNEL PROVISIONS | 4,061 | 79 | 53 | (205) | (118) | 3,870 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 181
The actuarial valuation of severance provisions is carried out on the basis of the "benefits matured" with the support of actuarial experts.
The principal assumptions in the actuarial estimation process of the severance provisions for the years concerned are as follows:
As for any actuarial valuation the results depend on the technical bases adopted such as, among others, interest rate, inflation rate and expected turnover. The table below shows the sensitivity for each actuarial assumption at the end of the year, highlighting the effects of the changes of the actuarial assumptions reasonably possible at that date, in absolute terms.
| Valuation parameter | ||||||
|---|---|---|---|---|---|---|
| in thousands of Euro | +1 % on turnover rate |
-1 % on turnover rate |
+ 0.25% on annual inflation rate |
- 0.25% on annual inflation rate |
+ 0.25% on annual discount rate |
- 0.25% on annual discount rate |
| Severance | 3,737 | 3,769 | 3,810 | 3,695 | 3,661 | 3,847 |
For completeness the following table also shows the expected disbursements of the plan over a 5-year period:
| Years | Future estimated disbursements (in thousands of Euro) |
|---|---|
| 1 | 181 |
| 2 | 207 |
| 3 | 161 |
| 4 | 213 |
| 5 | 279 |
The other personnel provisions at December 31, 2018 concern the long-term incentive plan and the noncompetition agreement of the Chief Executive Officer/General Manager as governed by the Remuneration Policy commented upon in the Corporate Governance and Share Ownership Report, to which reference should be made.
The actuarial valuation at December 31, 2018 of the long-term incentive plan (II cycle 2016-2018, III cycle 2017-2019 and IV 2018-2020) and the non-competition agreement was made with the support of actuarial experts utilising the "benefits matured" method based on IAS 19 (paragraphs 67-69) through the "Project Unit Credit" criterion. Under this method the valuation is based on the average present value of the obligations matured based on the employment service up to the time of the valuation. The main valuation parameters were:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 182
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
Finally, we report the sensitivity which highlights the effects on the other employee provisions, in particular on the provision relating to the non-competitive agreement, in the case of termination of employment with probability equal to 10%:
| in thousands of Euro | Service cost |
|---|---|
| Other personnel provisions | 43 |
The following table breaks down the deferred tax liabilities at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2017 | Provisions | Uses | As at 31.12.2018 |
|---|---|---|---|---|
| DEFERRED TAX LIABILITIES | 2,003 | 24 | 0 | 2,027 |
| IRES rate 24% | Assessable | Tax | ||||||
|---|---|---|---|---|---|---|---|---|
| in thousands of Euro | at 31.12.2017 | Increases | Uses | at 31.12.2018 | at 31.12.2017 | Increases | Uses | at 31.12.2018 |
| Amortisation concession rights | 7,158 | 101 | O | 7,259 | 1,718 | 24 | 1,742 | |
| Total IRES | 7,158 | 101 | $\bf{0}$ | 7,259 | 1,718 | 24 | 0 | 1,742 |
| IRAP rate 4.2% | Assessable | Tax | ||||||
|---|---|---|---|---|---|---|---|---|
| in thousands of Euro | at 31.12.2017 | Increases | Uses | at 31.12.2018 | at 31.12.2017 | Increases | Uses | at 31.12.2018 |
| Amortisation concession rights | 6,786 | $\mathbf 0$ | 0 | 6,786 | 285 | $\Omega$ | $\Omega$ | 285 |
| Total IRAP | 6,786 | $\mathbf{0}$ | $\mathbf{0}$ | 6,786 | 285 | $\bf{0}$ | $\bf{0}$ | 285 |
| Total | 2,003 | 24 | $\bf{0}$ | 2,027 |
The deferred tax liabilities were recorded on transition to IFRS following the application of IFRIC 12 "Service concession arrangements", as illustrated in the note relating to the Transition to International Accounting Standards IFRS in the 2014 Financial Statements.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 183
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
The increase in the assessable amount, exclusively for IRES purposes, which results in the recognition of the deferred tax liabilities, is attributable to the construction services margin (mark up) recognised on investments in progress concerning Concession rights without tax relevance.
The provision for renewal of airport infrastructure include the provision allocated to cover the maintenance and renewal expenses of the airport infrastructure in the areas obtained under concession until 2044, which the company is required to return in a perfect operational state.
The following table presents the movements of the provision in the year ended December 31, 2018:
| in thousands of Euro | As at 31.12.2017 |
Provisions | Uses | Reclassifications | As at 31.12.2018 |
|---|---|---|---|---|---|
| PROVISION FOR RENEWAL OF AIRPORT INFRASTRUCTURE (NON-CURRENT) | 9,476 | 3,505 | (1,023) | (1,717) | 10,241 |
The increases in 2018 totalled Euro 3.5 million, of which Euro 3.69 million classified under provisions in the income statement and the residual of Euro 0.19 million recorded under financial income from discounting.
In 2018 the utilisations of the provision exceeded the scheduled provisions due to the greater amount of work on the runway during the four days of airport closure in the middle of September. The utilisations of the provision total Euro 4.54 million of which Euro 3.5 million recorded in the current infrastructure renewal provision (note 21) and the residual as utilisation of the non-current provision as illustrated above. In particular, we report the renewal of a section of the runway and the extraordinary maintenance of the taxiway, in addition to miscellaneous works, including the renewal of the terminal roofing and of the cargo building.
The decreases from reclassifications concern the periodic reclassification to current liabilities of the disbursements expected in the twelve months subsequent to period end.
For completeness the following table shows the sensitivity in the interest rates applied for the discounting of the provision for renewal of airport infrastructure at December 31, 2018:
| in thousands of Euro | Interest balance | Sensitivity | Sensitivity Analysis |
|---|---|---|---|
| for year | Analysis (+0.5%) | (-0.1%) | |
| Provision for renewal of airport infrastructure |
192 | 121 | 206 |
The discounting curve utilised for the valuation includes the country risk. In this specific case the input data utilised was the short, medium and long-term zero-coupon government bonds (from 3 months to 30 years), sourced from the information provider Bloomberg.
The following table presents the movements in the year ending December 31, 2018 in the provisions for risks and charges:
| in thousands of Euro | As at 31.12.2017 | Provisions | Util./Other decreases |
As at 31.12.2018 |
|---|---|---|---|---|
| Risks provision for disputes | 836 | 35 | (2) | 869 |
| Aeroporto Guglielmo Marconi di Bologna S.p.A. | 184 |
| Employee back pay | 266 | 249 | (515) | 0 |
|---|---|---|---|---|
| Other provisions for risks and charges | 152 | 0 | 0 | 152 |
| PROVISIONS FOR RISKS AND CHARGES (NON-CURRENT) | 1,254 | 284 | (517) | 1,021 |
The main change concerns the employee back-dated provision on which, within the framework of the renewal of the Airport Operators Trade Union Agreement expired on December 31, 2016, an estimate of the liabilities for a One-off/back-dated employee payments was accrued for the period. The utilisations derive from the reclassification of the liabilities from non-current provisions (note 22), as the closure is estimated during the year 2019.
On July 26, 2016, on the completion of a general review commenced on May 18, 2016 for the year 2013 of the Parent Company, the Bologna Tax Agency prepared a tax assessment highlighting a presumed derecognition of the IRES deductibility of the loss of Euro 5 million deriving from the enforcement of the surety guarantee issued in 2007 by AdB to the financial institutions of SEAF, Società di Gestione dell'Aeroporto di Forlì, company declared bankrupt in 2013.
The Directors, taking account of the factual and legal arguments of the Parent Company, as formalised in the petitions forwarded to the Tax Agency concerning the financial and therefore tax reasoning behind the choices made, categories the liability as potential and therefore only includes appropriate disclosure in the Notes.
In relation, finally, to the extraordinary administration of Alitalia, the Group assessed the potential liability related to the revocation of receivables arising in the six months before the procedure, for an amount of Euro 1.49 million, net of municipal surtaxes. At the preparation date of this document, taking account of the information noted and the defensive arguments arising in the case in which this request is advanced, the Directors considered it appropriate to provide disclosure in the Notes, without making any accrual, although while at the same time continuing to closely monitor the airline's situation.
The following table breaks down non-current financial liabilities at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Bank loans – non-current | 11,436 | 15,345 | (3,909) |
| NON-CURRENT FINANCIAL LIABILIITES | 11,436 | 15,345 | (3,909) |
Loans - non-current portion comprise the medium/long-term portion of loans undertaken by the company and outstanding at December 31, 2018. The decrease in the year is mainly due to repayments totalling Euro 5.3 million (as in 2017).
Total bank loans at December 31, 2018 amount to Euro 15.3 million, of which Euro 11.4 million non-current and Euro 3.9 million current (note 23).
The breakdown (by calendar year) of loans including the current portion was as follows:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 185
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The company must comply with the following economic/financial covenants calculated annually on its financial statements:
The contractual conditions of the loans in place at December 31, 2018 are illustrated below:
| Issuing financial institution | Debt | Interest rate applied | Rate | Maturity | Covenant |
|---|---|---|---|---|---|
| Intesa San Paolo S.p.A | |||||
| (former Banca OPI S.p.A) | Loan | Rate applied by EIB to the Bank + 0.45% | Half-Year | 2019 | No |
| Fixed rate until 10/4/2017 of 3.693%; | |||||
| from 11/04 to 10/06/2017 of 3.3%; | Half-Year | 2024 | Yes | ||
| Intesa San Paolo S.p.A. | Loan | from 11/06/2017 to 10/06/2024 of 3% |
The loans are not covered by secured guarantees.
A sensitivity analysis is illustrated below on variable interest rate loans held at December 31, 2018.
| in thousands of Euro | |||||||
|---|---|---|---|---|---|---|---|
| Issuing financial institution | Type of financing |
Interest rate applied | Balance at 31.12.2018 |
Interest 2018 |
Sensitivity Analysis (+0.5%) |
Sensitivity Analysis (-0.1%) |
|
| Intesa San Paolo S.p.A (former Banca OPI S.p.A) |
Loan | Rate applied by EIB to the Bank + 0.45% |
1,379 | 15 | 32 | 12 |
With reference to the cross-default clauses on the loan contracts of the Company, these include both clauses where the benefits are no longer applicable and where the Company financed is not in compliance with obligations of a credit or financial nature, or guarantees assumed with any party. We report that at December 31, 2017 the Company has not received any communication for application of cross default clauses by any of its lenders.
We illustrate below the table required by the amended IAS 7 - Cash Flow Statement for a greater disclosure of changes in financial liabilities:
| in thousands of Euro | Bank loans |
|---|---|
| Balance as at 31 12 2017 | 20,643 |
| Cash flows | (5,314) |
| Other changes: | |
| IAS 39 financial expenses | 27 |
| Balance 31 12 2018 | 15,356 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 186
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| TRADE PAYABLES | 18,471 | 15,739 | 2,732 |
Trade payables principally concern Italian suppliers. The increase principally concerns higher external costs and greater investments.
The table below shows the breakdown of trade payables at December 31, 2018 and December 31, 2017 by due date:
| in thousands of Euro | Falling due | Past due | Total as at 31.12.2018 |
|---|---|---|---|
| Invoices/credit notes received | 6,939 | 1,611 | 8,550 |
| Invoices/credit notes to be received | 9,921 | 0 | 9,921 |
| TOTAL TRADE PAYABLES | 16,860 | 1,611 | 18,471 |
| in thousands of Euro | Not yet due | Overdue 0-30 |
Overdue 30-60 |
Overdue 60-90 |
Overdue beyond 90 |
Total |
|---|---|---|---|---|---|---|
| TRADE PAYABLES | 6,939 | 1,269 | 96 | 3 | 243 | 8,550 |
| in thousands of Euro | Falling due | Overdue | Total as at 31.12.2017 |
|---|---|---|---|
| Invoices/credit notes received | 6,978 | 2,874 | 9,852 |
| Invoices/credit notes to be received | 5,887 | 0 | 5,887 |
| TOTAL TRADE PAYABLES | 12,865 | 2,874 | 15,739 |
| in thousands of Euro | Not yet due | Overdue 0-30 |
Overdue 30-60 |
Overdue 60-90 |
Overdue beyond 90 |
Total |
|---|---|---|---|---|---|---|
| TRADE PAYABLES | 6,978 | 2,450 | 34 | 1 | 389 | 9,852 |
The following table breaks down other liabilities at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Current tax payables | 2,063 | 1,595 | 468 |
| Current payables to personnel and social security institutions | 3,956 | 3,878 | 78 |
| ENAC concession fee and other State payables | 15,710 | 14,557 | 1,153 |
| Other current payables, accrued expenses and deferred income | 4,308 | 3,807 | 501 |
| Fiscal consolidation payables | 104 | 0 | 104 |
| OTHER LIABILITIES | 26,141 | 23,837 | 2,304 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 187
The principal changes were as follows:
The following table breaks down tax payables at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| VAT payables | 278 | 0 | 278 |
| Direct income taxes | 808 | 743 | 65 |
| Other tax payables | 977 | 852 | 125 |
| CURRENT TAX PAYABLES | 2,063 | 1,595 | 468 |
The increase in the payable for direct taxes is due to the higher IRES payable (+Euro 135 thousand), partially offset by the lower IRAP payable (-Euro 70 thousand), with the former due to the absence of IRES tax breaks and the latter due to increased payments on account in the year.
Other tax payables mainly concern the payable for employee IRPEF withholding taxes.
The following table breaks down employee payables and social security institutions at December 31, 2018 (compared with December 31, 2017).
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | |
|---|---|---|---|
| Payables to personnel for salaries | 1,115 | 873 | 242 |
| Payables to personnel for deferred compensation | 1,775 | 2,017 | (242) |
| Payables to social security institutions | 1,066 | 988 | 78 |
| CURRENT PAYABLES TO PERSONNEL AND SOCIAL SECURITY INSTITUTIONS | 3,956 | 3,878 | 78 |
The ENAC concession fees and other State payables mainly comprises:
The following table breaks down current liabilities, accrued liabilities and deferred income December 31, 2018 (compared with December 31, 2017).
Aeroporto Guglielmo Marconi di Bologna S.p.A. 188
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | |
|---|---|---|---|
| Municipal surtax payables | 3,449 | 2,811 | 638 |
| Other current liabilities | 807 | 891 | (84) |
| Current accrued liabilities and deferred income | 52 | 105 | (53) |
| TOTAL OTHER CURRENT PAYABLES, ACCRUED EXPENSES AND DEFERRED INCOME | 4,308 | 3,807 | 501 |
The former account concerns the boarding fee municipal surtax recharged to airlines, but not yet collected at December 31, 2018. The increase is related to the growth in traffic and therefore of turnover. Finally, the portion of the municipal surtax payable relating to receivables for surtaxes collected from carriers, not yet paid to the creditor entities on the other hand is classified under current financial liabilities (Note 23).
Other current payables is a residual account which includes, among others, guarantee deposits received from clients, which reported the greatest increase in the category.
The following table shows the movement of the provisions for renewal of airport infrastructure at December 31, 2018 and 2017.
| in thousands of Euro | As at 31.12.2017 |
Provisions Uses |
Reclassifications | As at 31.12.2018 |
|
|---|---|---|---|---|---|
| PROVISION FOR RENEWAL OF AIRPORT INFRASTRUCTURE (CURRENT) | 3,498 | 0 | (3,498) | 1,717 | 1,717 |
The account includes the provision for renewal of airport infrastructure - current portion, for which greater details is provided in note 16 (non-current provision for renewal of infrastructure).
The changes in the current provision for risks and charges in the year ending December 31, 2018 are reported below.
| in thousands of Euro | As at 31.12.2017 |
Provisions | Other increases | As at 31.12.2018 |
|---|---|---|---|---|
| Employee back-dated provision | 0 | 0 | 515 | 515 |
| PROVISIONS FOR RISKS AND CHARGES (CURRENT) | 0 | 0 | 515 | 515 |
The increase concerns the reclassification into this account of the employee provisions classified under non-current provisions (Note 17) until December 31, 2017, as the closure of the trade union contract increases is expected in 2019.
The following table breaks down current financial liabilities at December 31, 2018 (compared with December 31, 2017).
Aeroporto Guglielmo Marconi di Bologna S.p.A. 189
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
| in thousands of Euro | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Bank loans - current | 3,920 | 5,298 | (1,378) |
| Municipal surtax payables | 2,050 | 1,806 | 244 |
| Other current financial debt | 40 | 52 | (12) |
| CURRENT FINANCIAL LIABILITIES | 6,010 | 7,156 | (1,146) |
For a breakdown of the Loans - current portion and other financial payables, reference should be made to account 18 Non-current Financial Liabilities which presents the outstanding company loans and other financial payables at December 31, 2018 and the changes in the year.
Finally, municipal surtax payables comprise the municipal surtax on passenger boarding fee payables concerning the portion received by airlines in the month of December and reversed to the credit institutions in January.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 190
The principal 2018 income statement accounts are compared with 2017 below.
The application of the new accounting standard IFRS 15, applied to all contracts with customers since January 1, 2018, resulted in the identification of the following revenue streams:
Airport fees concern the fees paid for the making available of infrastructure and services exclusively provided by the company for landing, take-off, lighting and parking, passenger boarding, disembarkation and information and cargo, in addition to the use of centralised infrastructure.
These comprise:
For further details, reference should be made to the description of the business in the Directors' Report. The Airport Fees, in consideration of the public utility nature of the airport services, are subject to regulation in compliance with current legislation and the tariff models elaborated by the Airport Regulatory Authority ("ART").
The company complies with its obligations in relation to airport fees, making available to carriers airport infrastructure for the landing, take off, lighting and parking of aircraft, the departure and embarkment of passengers and goods as well as the utilisation of centralised infrastructure (e.g. de-icing). These services are invoiced bi-monthly and/or monthly with standard payment terms of 30 days from invoice date end of month, with the exception of the boarding fee municipal surtax whose payment is on demand.
Commercial and non-commercial sub-license/leasing revenues concerns the provision of spaces and commercial areas and premises within the airport area (so-called sub-licenses) and externally to the airport area (so-called leasing).
This category includes sub-license/leasing with commercial tariffs (retail sub-licenses, parking sub-licenses etc.) and administrated tariffs (payments for the exclusive use of assets or payments for the use of a dedicated airport infrastructure to the individual carriers or operators (check-in counters, offices, operating premises).
Aeroporto Guglielmo Marconi di Bologna S.p.A. 191
The company complies with its obligations in relation to airport fees, making available to carriers airport infrastructure for the landing, take off, lighting and parking of aircraft, the departure and embarkment of passengers and goods as well as the utilisation of centralised infrastructure (e.g. de-icing). These services are invoiced bi-monthly and/or monthly with standard payment terms of 30 days from invoice date end of month, with the exception of the boarding fee municipal surtax whose payment is on demand.
The sub-license contracts between the company and its customers are within the definition of IAS 17 - Leasing and are therefore excluded from the application of IFRS 15 (reference IFR15.5). From January 1, 2019, these contracts will therefore fall within the scope of IFRS 16 which replaced IAS 17.
The application of the new standard is therefore centred on verification that the sub-license contracts principally involve the leasing of well-defined spaces/premises, and not including other services such as advertising and administration/utility services within the definitions contained in IFRS 15. In this case a reclassification was made in the financial statements for Revenue Streams within the scope of IFRS 15.
Parking revenues are represented by the provision of parking spaces internally and externally to the airport area based on public tariffs which are applied to all sales made.
The company complies with its obligations in relation to these services making available to its customers parking facilities. Invoicing of this service is only made on the request of the customer; the parking service is normally settled in cash. There were no effects from the application of IFRS 15.
Revenues from Construction Services concern the construction services undertaken by the company on behalf of the Granting Body for the investments concerning the Concession Rights. The company, as not a construction company, contracts with third parties responsible for constructing and improving the infrastructure. Accordingly, the fair value of the fees for the construction/improvement services rendered by the company is the fair value of the fees for the construction/improvement service rendered by third parties, plus a "Project Management" mark-up representative of the internal costs of planning and coordination of the work by a specific internal unit. The application of IFRS 15 did not result in any change in the recognition of revenues from construction service.
Other revenues: this revenue stream concerns the residual obligations compared to the previous contractual categories (security services, MBL services, training courses, cart collection services, baggage depot services, etc.). The invoicing of the various services in this category is normally aggregated monthly for continual services and/or individual orders. Some services also provide for immediate invoicing. The standard payment terms of these services are 30 days from invoice date end of month. For some types of services (training courses, badge issuance), advanced payment is requested.
In summary, in addition to that illustrated above, the analysis of the contracts and the aggregation of revenue accounts in accordance with the new revenue streams requiring separation of the payments underlying various contractual obligations, identified the following effects:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 192
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
In relation to contracts which provide for variable payments we report as follows: the commercial incentive contracts with carriers recorded as a decrease of airport fee revenues may provide for variable payments related to the achievement of traffic volumes and/or number of routes in the period (typically measured based on IATA seasons). From 2018 also the "one-off" promotional incentives, such as incentives for the start-up of new flights, up to now recorded under service costs, are recorded as a direct reduction of airport fee revenues, as already applied for the variable incentives recognised based on traffic. In the year 2018 this amounted to Euro 83 thousand compared to Euro 142 thousand in 2017.
The reclassification of company revenues based on revenue streams defined by IFRS 15 is shown in the following table:
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Airport fees | 49,742 | 46,316 | 3,426 |
| Parking | 15,948 | 15,096 | 852 |
| Revenues from construction services | 15,620 | 6,650 | 8,970 |
| Others | 5,556 | 5,232 | 324 |
| TOTAL IFRS 15 REVENUE STREAMS | 86,866 | 73,294 | 13,572 |
The reconciliation between IFRS 15 revenue streams and total revenues (note 24 of the Income Statement) is shown in the following table:
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Airport fees | 49,742 | 46,316 | 3,426 |
| Parking | 15,948 | 15,096 | 852 |
| Revenues from construction services | 15,620 | 6,650 | 8,970 |
| Other | 5,556 | 5,232 | 324 |
| TOTAL IFRS 15 REVENUE STREAMS | 86,866 | 73,294 | 13,572 |
| Commercial/non-comm. sub-licenses | 21,401 | 19,560 | 1,841 |
| TOTAL NON IFRS 15 REVENUE STREAMS | 21,401 | 19,560 | 1,841 |
| TOTAL NON IFRS 15 Revenues | 126 | 124 | 2 |
| TOTAL REVENUES | 108,393 | 92,978 | 15,415 |
IFRS 15 revenue streams related to the changes in the receivables/collections in the period is illustrated below.
| in thousands of Euro | receivables as at 31.12.2017 |
Revenues (*) | Collections/ off set |
receivables as at 31.12.2018 |
|---|---|---|---|---|
| Airport fees (*) | 7,069 | 51,367 | (49,683) | 8,753 |
| Parking | 75 | 19,432 | (19,437) | 70 |
| Revenues from construction services | 0 | 15,620 | (15,620) | 0 |
| Other | 842 | 6,196 | (5,769) | 1,269 |
| TOTAL IFRS 15 REVENUE STREAMS | 7,986 | 92,615 | (90,509) | 10,092 |
(*) The data included in the column "Revenues" differs from the Revenues shown in the previous table as this includes VAT, but not the accruals for the period (e.g. credit notes to be received for incentives, invoices to be issued).
Aeroporto Guglielmo Marconi di Bologna S.p.A. 193
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Revenues from aeronautical services | 51,084 | 47,636 | 3,448 |
| Revenues from non-aeronautical services | 40,636 | 37,687 | 2,949 |
| Revenues from construction services | 15,620 | 6,650 | 8,970 |
| Other operating revenues and income | 1,053 | 1,005 | 48 |
| REVENUES | 108,393 | 92,978 | 15,415 |
For the revenue performance in the period, reference should be made to the Directors' Report.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Revenues from centralised infrastructure/other airport | |||
| services | 196 | 154 | 42 |
| Exclusive-use revenues | 1,340 | 1,307 | 33 |
| Airport fee revenues | 68,469 | 65,446 | 3,023 |
| PRM revenues | 4,466 | 4,291 | 175 |
| Air traffic development incentives | (23,389) | (23,575) | 186 |
| Other aeronautical revenues | 2 | 13 | (11) |
| TOTAL REVENUES FROM AERONAUTICAL SERVICES | 51,084 | 47,636 | 3,448 |
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Passenger boarding fees | 34,437 | 33,182 | 1,255 |
| Landing, take-off and parking fees | 18,756 | 18,272 | 484 |
| Passenger security fees | 11,238 | 10,472 | 766 |
| Baggage stowed control fees | 3,190 | 2,942 | 248 |
| Freight loading and unloading charges | 810 | 837 | (27) |
| Reduction FSC fees and miscellaneous | 38 | (259) | 297 |
| TOTAL AVIATION FEE REVENUES | 68,469 | 65,446 | 3,023 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 194
The table below shows revenues from non-aeronautical services in 2018 and 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Sub-licensing of areas and premises | 18,244 | 16,908 | 1,336 |
| Reduction revenues from sub-license to FSC | 0 | (52) | 52 |
| Parking | 15,948 | 15,096 | 852 |
| Other commercial revenues | 6,444 | 5,735 | 709 |
| TOTAL REVENUES FROM NON-AERONAUTICAL SERVICES | 40,636 | 37,687 | 2,949 |
The revenues from non-aeronautical services report an increase related to the good performance of all the components in this category and, in particular, of the commercial premises and spaces sub-licenses, parking and MBL services.
Other commercial revenues are broken down as follows:
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Ticketing | 40 | 44 | (4) |
| Marconi Business Lounge | 2,539 | 2,280 | 259 |
| Advertising | 1,942 | 1,397 | 545 |
| Misc. commercial revenues | 1,923 | 2,015 | (92) |
| Reduction in other commercial revenues to FSC | 0 | (1) | 1 |
| TOTAL OTHER COMMERCIAL REVENUES | 6,444 | 5,735 | 709 |
Revenues from construction services concern the construction services undertaken by Aeroporto Guglielmo Marconi di Bologna S.p.A. on behalf of the ENAC granting entity for the capital investments previously commented upon in relation to the Concession Rights in Note 1.
These revenues amounted to Euro 15.6 million in 2018 and Euro 6.6 million in 2017.
The table below shows other revenues and income in 2018 and 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Compensation, reimbursements and other income | 1,035 | 966 | 69 |
| Operating grants | 16 | 20 | (4) |
| Capital gains | 2 | 19 | 0 |
| TOTAL OTHER REVENUES AND INCOME | 1,053 | 1,005 | 65 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 195
The table below presents consumables and goods in 2018 and 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Consumables and goods | 363 | 344 | 19 |
| Maintenance materials | 210 | 191 | 19 |
| Fuel and gasoline | 182 | 273 | (91) |
| TOTAL CONSUMABLES AND GOODS | 755 | 808 | (53) |
As indicated in the table, this category of costs reports an increase, mainly relating to consumable goods and maintenance materials.
The following table shows the breakdown of services costs for 2018 and 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Maintenance expenses | 4,551 | 4,133 | 418 |
| Utilities | 2,095 | 1,750 | 345 |
| Cleaning and accessory services | 2,084 | 1,919 | 165 |
| Third-party services | 5,725 | 5,075 | 650 |
| MBL Services | 343 | 301 | 42 |
| Advertising, promotion and development | 686 | 915 | (229) |
| Insurance | 656 | 631 | 25 |
| Professional and consultancy services | 1,725 | 1,947 | (222) |
| Fees and reimbursements for statutory bodies | 478 | 455 | 23 |
| Other service costs | 171 | 144 | 27 |
| TOTAL SERVICE COSTS | 18,514 | 17,270 | 1,244 |
Total service costs increased mainly due to higher charges for:
The savings in advertising, promotion and development (Euro 225 thousand) reduced to Euro 83 thousand, taking into account the one-off traffic development charges incurred in 2017 which, in accordance with the new accounting standard IFRS 15, from January 1, 2018 are recorded as a decrease in aeronautical revenues.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 196
A further breakdown in maintenance expenses is provided below:
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Owned assets maintenance expenses | 1,001 | 981 | 20 |
| Airport infrastructure | 2,989 | 2,694 | 295 |
| Third-party assets | 561 | 458 | 103 |
| TOTAL MAINTENANCE COSTS | 4,551 | 4,133 | 418 |
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Snow clearance | 965 | 441 | 524 |
| Porterage, transport third-party services | 558 | 395 | 163 |
| PRM assistance service | 1,574 | 1,512 | 62 |
| De-icing and other public service charges | 508 | 541 | (33) |
| Security service | 1,114 | 1,157 | (43) |
| Other outsourcing | 1,006 | 1,029 | (23) |
| TOTAL THIRD-PARTY SERVICES | 5,725 | 5,075 | 650 |
Construction service costs concern the construction costs incurred by Aeroporto Guglielmo Marconi di Bologna S.p.A. for the capital investments previously commented upon in relation to the Concession Rights in Note 1.
The following table shows the breakdown of this category of services costs for 2018 and 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Concession fees | 5,979 | 5,658 | 321 |
| Hire charges | 264 | 328 | (64) |
| Rental charges | 568 | 541 | 27 |
| EDP processing charges | 1,196 | 1,032 | 164 |
| Other rental and hire costs | (28) | (30) | 2 |
| TOTAL LEASES, RENTALS AND OTHER COSTS | 7,979 | 7,529 | 450 |
Total Rental, hire and similar costs recorded an increase in airport concession fees and security services, related to the rise in traffic, in addition to higher fees for data elaboration for the new investments in technology.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 197
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The following table shows the breakdown of other operating expenses for 2018 and 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Tax charges | 1,318 | 1,266 | 52 |
| Fire prevention service contribution | 1,374 | 1,403 | (29) |
| Capital losses | 3 | 48 | (45) |
| Other operating costs and expenses | 463 | 372 | 91 |
| Non-recurring expenses (income) | 0 | 318 | (318) |
| TOTAL OTHER OPERATING EXPENSES | 3,158 | 3,407 | (249) |
Operating expenses reported a decrease for "non-recurring charges", due to the absence of accessory charges to the purchase of a property in 2017.
The following table shows the breakdown of personnel costs for 2018 and 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Salaries and wages | 17,952 | 17,438 | 514 |
| Social security contributions | 4,904 | 4,662 | 242 |
| Severance | 1,309 | 1,260 | 49 |
| Retirement pensions and similar | 180 | 180 | 0 |
| Other personnel costs | 1,531 | 1,982 | (451) |
| TOTAL PERSONNEL COSTS | 25,876 | 25,522 | 354 |
The increase in personnel costs mainly relates to the expanded workforce, as presented in the following tables (+23 average resources), in addition to normal salary movements. "Other personnel costs", broken down in the following table, indicate a saving, mainly due to lower personnel departure incentive charges.
Other personnel costs are broken as follows:
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Staff canteen | 561 | 543 | 18 |
| Personnel training and refresher courses | 219 | 261 | (42) |
| Personnel travel expenses | 268 | 257 | 11 |
| Other personnel provisions | 79 | 91 | (12) |
| Misc. personnel costs | 404 | 830 | (426) |
| TOTAL OTHER PERSONNEL COSTS | 1,531 | 1,982 | (451) |
The average headcount by category in the two periods under consideration is shown below:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 198
| Average workforce (number) | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Executive Managers | 10 | 10 | 0 |
| White-collar workers | 381 | 364 | 17 |
| Blue-collar workers | 98 | 92 | 6 |
| TOTAL PERSONNEL | 489 | 466 | 23 |
The headcount at the end of the two financial years under consideration was as follows:
| Workforce (number) | As at 31.12.2018 | As at 31.12.2017 | Change |
|---|---|---|---|
| Executives | 10 | 9 | 1 |
| White-collar | 395 | 362 | 33 |
| Blue-collar | 97 | 75 | 22 |
| TOTAL PERSONNEL | 502 | 446 | 56 |
The table below shows amortisation, depreciation and write-downs in 2018 and 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Amortisation/impairment of Concession Rights | 5,659 | 5,552 | 107 |
| Amortisation of other intangible assets | 1,320 | 964 | 356 |
| Depreciation of tangible assets | 2,166 | 2,010 | 156 |
| TOTAL DEPRECIATION, AMORTISATION AND IMPAIRMENT | 9,145 | 8,526 | 619 |
The increase in depreciation and amortisation is due to the effects of the full year application from the progressive roll-out of investments over the last twelve months.
The account includes Euro 9.1 million of depreciation and amortisation, of which Euro 97 thousand of write-downs on Concession Rights for the write-off of projects no longer utilisable.
The following table shows the movement of the provisions for risks and charges in 2018 and 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Provisions for doubtful accounts | 42 | (17) | 59 |
| Provision for renewal of airport infrastructure | 3,696 | 2,537 | 1,159 |
| Provisions for other risks and charges | 284 | 236 | 48 |
| TOTAL PROVISIONS | 4,022 | 2,756 | 1,266 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 199
The increase is due to higher provision for renewal of airport infrastructure due to the increase in interventions undertaken and scheduled in advance of some works airside. Finally, the provision for other risks and charges primarily concerns amounts due to employees following the expiry of the Collective Bargaining Agreement for airport managers on December 31, 2016.
The following table shows the breakdown of Financial income and financial charges for 2018 and 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change | |
|---|---|---|---|---|
| Investment income | 13 | 0 | 13 | |
| Income from securities | 25 | 39 | (14) | |
| Other income | 125 | 224 | (99) | |
| Discounting income on provisions | 192 | 0 | 192 | |
| TOTAL FINANCIAL INCOME | 355 | 263 | 92 | |
| Interest expenses and bank charges | (496) | (634) | 138 | |
| Discounting charges on provisions | (82) | (148) | 66 | |
| Other financial expenses | (11) | (31) | 20 | |
| TOTAL FINANCIAL EXPENSES | (589) | (813) | 224 | |
| TOTAL FINANCIAL INCOME AND EXPENSES | (234) | (550) | 316 |
The financial management improved due to the increase in financial income and decrease in financial charges. The former increase derives from the change in interest rates which resulted in an increase in income from discounting of provisions and the decrease in the relative charges. In addition, we report the decrease in financial expenses due to both lower overall debt and the reduction in the interest rate on the Intesa San Paolo loan which matures in 2024.
The following table shows the taxes for the year for 2018 and 2017.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Current taxes | 6,381 | 4,909 | 1,472 |
| Deferred tax assets and liabilities | 352 | 459 | (107) |
| TOTAL TAXES FOR THE YEAR | 6,733 | 5,368 | 1,365 |
| Current taxes as a % of result before tax | 26.77% | 24.21% | 2.56% |
| Taxes for the year as a % of result before taxes | 28.25% | 26.47% | 1.77% |
The effective tax rate for the year 2018 was 28.25% compared to 26.47% in 2017. This decrease is mainly due to the omission, in the company, of income from the utilisation of the R&D tax credits as the focus was on projects which would increase the performance of the IT infrastructure and on the consolidation of the activities already commenced. The objective taking into account also the Investment Plan is to continue the research and development activities in 2019 and 2020.
The reconciliation between the IRES effective and theoretical tax rate is illustrated below:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 200
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
| Reconciliation between actual/theoretical Tax Rate (IRES) | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| Result before taxes | 23,834 | 20,276 | 3,558 |
| Ordinary tax rate | 24% | 24% | 0 |
| Theoretical tax charge | 5,720 | 4,866 | 978 |
| Effect of increase or decrease to the ordinary tax rate: | As at 31.12.2018 | As at 31.12.2017 | |
|---|---|---|---|
| Taxed provisions deductible in subsequent financial years | 368 | 426 | (58) |
| Costs deductible in subsequent financial years | 3,004 | 2,723 | 281 |
| Other non-deductible costs | 914 | 1,090 | (176) |
| Use of provisions taxed in prior financial years | (634) | (621) | (13) |
| Costs not deductible in prior financial years | (3,416) | (3,523) | 107 |
| Other differences | (2,211) | (1,881) | (330) |
| Total increases/decreases | (1,975) | (1,786) | (189) |
| Tax effect on changes at 24% | (474) | (429) | (52) |
| IRES for the year | 5,246 | 4,438 | 809 |
| Effective tax rate | 22.01% | 21.89% | 0.13% |
| Breakdown of taxes for the year | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
Change |
|---|---|---|---|
| IRES | 5,246 | 4,438 | 808 |
| IRAP | 1,135 | 1,010 | 125 |
| IRES Income for Research & Development bonus | 0 | (256) | 256 |
| Taxes for previous financial years | 0 | (283) | 283 |
| TOTAL | 6,381 | 4,909 | 1,472 |
For the definition of "Related Parties", reference should be made to IAS 24, approved by Regulation (EC) No. 1725/2003.
Intercompany transactions are carried out within the scope of ordinary operations and at normal market conditions. Related party transactions principally concern commercial and financial transactions, in addition to participation in the tax consolidation. None of these have particular economic or strategic significance for the company as they do not account for a significant percentage of the total financial statement amounts.
The Bologna Chamber of Commerce shareholders were identified as a Government party, therefore exempt from the disclosure regarding related parties as defined by IAS 24. The categorisation of the Bologna Chamber of Commerce as a Government party therefore limited the checks required for the identification of related parties to the mere identification of the Bologna Chamber of Commerce. No additional information is reported in the financial statements concerning transactions undertaken by the company with the Bologna Chamber of Commerce as no significant transactions are undertaken with this shareholder.
On January 29, 2018, with the co-optation of the director Livio Fenati, ratified by the Shareholders' Meeting of April 24, 2018, Telepass Spa became a related party until September 26, 2018, the date of his resignation. During the year, costs were reported for services regarding Telepass of Euro 109 thousand, related to the contract for the management of Telepass parking receipts.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 201
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
In addition to that above, inter-company transactions are added, the most important of which are outlined below.
Commercial transactions between the Parent Company and the subsidiary Tag Bologna Srl, in terms of receivables, principally concern the twenty-year sub-concession of the General Aviation traffic assistance infrastructure and the provision of services related to security and the remuneration reversed to the employer Adb of the director employees of the Parent Company, for a total of Euro 0.3 million, substantially unchanged compared to 2017.
Adb payables to the subsidiary mainly concern the capital grant for the covering of General Aviation terminal infrastructure operation and maintenance costs for the boarding and disembarking of passengers, against the financial advantage for AdB of including these costs in the calculation of passenger boarding fees. Service costs matured from Tag in 2018 amounted to Euro 0.19 million, also substantially unchanged compared to 2017.
Non-commercial transactions with Tag concerned:
During 2018, commercial transactions between the Parent Company and the subsidiary Fast Freight Marconi Spa mainly concern the provision of the following services:
for Euro 0.43 million (Euro 0.38 million in 2017).
Non-commercial transactions with FFM included:
Aeroporto Guglielmo Marconi di Bologna S.p.A. 202
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
The following tables present the balances of related parties transactions contained in the financial statements' balances.
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
||
|---|---|---|---|---|
| Total | of which related parties |
Total | of which related parties |
|
| Concession rights | 161,148 | 0 | 151,212 | 0 |
| Other intangible assets | 2,049 | 0 | 1,783 | 0 |
| Intangible assets | 163,197 | 0 | 152,995 | 0 |
| Land, property, plant and equipment | 14,873 | 0 | 14,441 | 0 |
| Investment property | 4,732 | 0 | 4,732 | 0 |
| Tangible assets | 19,605 | 0 | 19,173 | 0 |
| Equity Investments | 3,189 | 0 | 726 | 0 |
| Other non-current financial assets | 16,135 | 0 | 18,257 | 0 |
| Deferred tax assets | 5,822 | 0 | 6,487 | 0 |
| Other non-current assets | 1,423 | 0 | 1,450 | 0 |
| Other non-current assets | 26,569 | 0 | 26,920 | 0 |
| NON-CURRENT ASSETS | 209,371 | 0 | 199,088 | 0 |
| Inventories | 527 | 0 | 488 | 0 |
| Trade receivables | 13,759 | 156 | 12,561 | 107 |
| Other current assets | 4,358 | 1 | 3,970 | 18 |
| Current financial assets | 11,037 | 0 | 19,610 | 0 |
| Cash and cash equivalents | 12,825 | 0 | 13,947 | 0 |
| CURRENT ASSETS | 42,506 | 157 | 50,576 | 125 |
| Assets held-for-sale | 0 | 0 | 117 | 0 |
| TOTAL ASSETS | 251,877 | 157 | 249,781 | 125 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 203
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
||
|---|---|---|---|---|
| Total | of which related parties |
Total | of which related parties |
|
| Share capital | 90,314 | 0 | 90,314 | 0 |
| Reserves | 62,821 | 0 | 61,997 | 0 |
| Profit (loss) for the year | 17,101 | 0 | 14,909 | 0 |
| TOTAL SHAREHOLDERS' EQUITY | 170,236 | 0 | 167,220 | 0 |
| Severance and other personnel provisions | 3,870 | 0 | 4,061 | 0 |
| Deferred tax liabilities | 2,027 | 0 | 2,003 | 0 |
| Provision for renewal of airport infrastructure | 10,241 | 0 | 9,476 | 0 |
| Provisions for risks and charges | 1,021 | 0 | 1,254 | 0 |
| Non-current financial liabilities | 11,436 | 0 | 15,345 | 0 |
| Other non-current liabilities | 192 | 0 | 192 | 24 |
| NON-CURRENT LIABILITIES | 28,787 | 0 | 32,331 | 24 |
| Trade payables | 18,471 | 39 | 15,739 | 51 |
| Other liabilities | 26,141 | 128 | 23,837 | 1 |
| Provision for renewal of airport infrastructure | 1,717 | 0 | 3,498 | 0 |
| Provisions for risks and charges | 515 | 0 | 0 | 0 |
| Current financial liabilities | 6,010 | 0 | 7,156 | 0 |
| CURRENT LIABILITIES | 52,854 | 167 | 50,230 | 52 |
| TOTAL LIABILITIES | 81,641 | 167 | 82,561 | 76 |
| TOTAL SHAREHOLDERS' EQUITY & LIABILITIES | 251,877 | 167 | 249,781 | 76 |
| in thousands of Euro | for the year ended 31.12.2018 |
for the year ended 31.12.2017 |
|||
|---|---|---|---|---|---|
| Total | of which related parties |
Total | of which related parties |
||
| Revenues from aeronautical services | 51,084 | 85 | 47,636 | 0 | |
| Revenues from non-aeronautical services | 40,636 | 262 | 37,687 | 348 | |
| Revenues from construction services | 15,620 | 0 | 6,650 | 0 | |
| Other operating revenues and income | 1,053 | 122 | 1,005 | 65 | |
| Revenues | 108,393 | 469 | 92,978 | 413 | |
| Consumables and goods | (755) | 0 | (808) | 0 | |
| Service costs | (18,514) | 303 | (17,270) | (205) | |
| Construction service costs | (14,876) | 0 | (6,333) | 0 | |
| Leases, rentals and other costs | (7,979) | 0 | (7,529) | 0 | |
| Other operating charges | (3,158) | 0 | (3,407) | 0 | |
| Personnel costs | (25,876) | 0 | (25,522) | 0 | |
| Costs | (71,158) | (303) | (60,869) | (205) | |
| Amortisation/write-downs Concession rights | (5,659) | 0 | (5,552) | 0 | |
| Amortisation of other intangible assets | (1,320) | 0 | (964) | 0 | |
| Depreciation of tangible assets | (2,166) | 0 | (2,010) | 0 | |
| Depreciation, amortisation and impairment | (9,145) | 0 | (8,526) | 0 |
Aeroporto Guglielmo Marconi di Bologna S.p.A. 204
| in thousands of Euro | for the year ended 31.12.2018 |
31.12.2017 | for the year ended | |
|---|---|---|---|---|
| Total | of which related parties |
Total | of which related parties |
|
| Provisions for doubtful accounts | (42) | 0 | 17 | 0 |
| Provision for renewal of airport infrastructure | (3,696) | 0 | (2,537) | 0 |
| Provisions for other risks and charges | (284) | 0 | (236) | 0 |
| Provisions for risks and charges | (4,022) | 0 | (2,756) | 0 |
| Total Costs | (84,325) | (303) | (72,151) | (205) |
| EBIT | 24,068 | 0 | 20,827 | 0 |
| Financial income | 355 | 0 | 263 | 0 |
| Financial charges | (589) | 0 | (813) | 0 |
| Result before taxes | 23,834 | 0 | 20,277 | 0 |
| Taxes for the period | (6,733) | 0 | (5,368) | 0 |
| Profit (loss) for the year | 17,101 | 0 | 14,909 | 0 |
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The movements with regards to the individual related parties respectively in 2018 and 2017 are presented below.
| 2018 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| in thousands of Euro | Land, Property, plant and equipment |
Other non current financial assets |
Total Non Current Assets |
Trade Receivables |
Other current assets |
Current financial assets |
Total Current Assets |
Total Assets |
Other non current liabilities |
Trade payables |
Other liabilities |
Current financial liabilities |
Total Current Liabilities |
Total liabilities |
| Tag Bologna Srl | 0 | 0 | 0 | 64 | 1 | 0 | 65 | 65 | 0 | 39 | 17 | 0 | 57 | 57 |
| Fast Freight Marconi Spa | 0 | 0 | 0 | 93 | 0 | 0 | 93 | 93 | 0 | 0 | 111 | 0 | 111 | 111 |
| Total | 0 | 0 | 0 | 156 | 1 | 0 | 157 | 157 | 0 | 39 | 128 | 0 | 167 | 167 |
| 2017 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| in thousands of Euro | Land, Property, plant and equipment |
Other non current financial assets |
Total Non Current Assets |
Trade Receivables |
Other current assets |
Current financial assets |
Total Current Assets |
Total Assets |
Other non current liabilities |
Trade payables |
Other liabilities |
Current financial liabilities |
Total Current Liabilities |
Total liabilities |
| Tag Bologna Srl | 0 | 0 | 0 | 62 | 18 | 0 | 80 | 80 | 9 | 51 | 0 | 0 | 51 | 60 |
| Fast Freight Marconi Spa | 0 | 0 | 0 | 45 | 0 | 0 | 45 | 45 | 15 | 0 | 1 | 0 | 1 | 16 |
| Total | 0 | 0 | 0 | 107 | 18 | 0 | 125 | 125 | 24 | 51 | 1 | 0 | 52 | 76 |
| 2018 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| in thousands of Euro | Revenues from aeronautical services |
Revenues from non aeronautical services |
Other operating revenues and income |
TOTAL | REVENUES Service costs | Other operating expenses |
Personnel costs |
TOTAL COSTS |
Financial Income |
Financial Expenses |
| Tag Bologna Srl | 0 | 35 | 0 | 35 | (194) | 0 | 0 | (194) | 0 | 0 |
| Fast Freight Marconi Spa | 85 | 227 | 122 | 433 | 0 | 0 | 0 | 0 | 0 | 0 |
| Telepass Spa | 0 | 0 | 0 | 0 | (109) | 0 | 0 | (109) | 0 | 0 |
| Total | 85 | 262 | 122 | 469 | (303) | 0 | 0 | (303) | 0 | 0 |
| 2017 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| in thousands of Euro | Revenues from aeronautical services |
Revenues from non aeronautical services |
Other operating revenues and income |
TOTAL | REVENUES Service costs | Other operating expenses |
Personnel costs |
TOTAL COSTS |
Financial Income |
Financial Expenses |
| Tag Bologna Srl | 0 | 36 | 0 | 36 | (205) | 0 | 0 | (205) | 0 | 0 |
| Fast Freight Marconi Spa | 0 | 312 | 65 | 377 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 348 | 65 | 413 | (205) | 0 | 0 | (205) | 0 | 0 |
All the related party transactions described above were undertaken during the course of ordinary operations and on an arm's length basis.
At December 31, 2018, the company had an operating lease contract, irrevocable as per IAS 17 for equipment, plant and machinery, vehicles and land, for which the instalments maturing in 2019, in the subsequent five years and beyond this period are detailed below.
| in thousands of Euro | |
|---|---|
| Within 2019 | 591 |
| Beyond one year but within 5 years (2020-2024) | 1,900 |
| Beyond 5 years (2025 and subsequent) | 0 |
| Total | 2,491 |
At December 31, 2018, the company had sub-concession contracts for areas, offices and operating and commercial spaces at the passengers and goods terminal and for other airport infrastructure, as outlined in detail in section 2 of the Directors' Report. The following table presents the minimum future fees of the contracts irrevocable in accordance with IAS 17 December 31, 2018 and maturing in 2019, in the subsequent five years and beyond this period. The amounts indicated below were not considered variable fees nor sub-concession contracts at administered tariffs as subject to potential tariff changes, including reductions.
| in thousands of Euro | |
|---|---|
| Within 2019 | 10,336 |
| Beyond one year but within 5 years (2020-2024) | 20,315 |
| Beyond 5 years (2025 and subsequent) | 399 |
| Total | 31,050 |
In addition, the environmental commitments of the company were formalised with the signing in 2015 with the Regional Agencies of the Regional Agreement for reducing the Airport's carbon footprint, involving investments by the company totalling Euro 6.5 million over a time period consistent with the timeframe for the rolling out of the airport Master Plan or rather by 2023. In 2018, the air quality monitoring system installation was completed and the relative technical testing carried out, which now permits the system to operate continuously. For further information, reference should be made to the Environment paragraph of the Directors' Report.
Tangible fixed assets in progress December 31, 2018 (note 2) include for Euro 1.78 million the first two tranches of the contributions granted by the company to Marconi Express Spa for the construction of the People Mover "Airport" station following completion of 66% of the airport area works. The overall contribution of Adb amounts to Euro 2.7 million, with the final tranche of Euro 0.92 million earmarked for testing purposes. Under the same agreement (signed by AdB, the Municipality of Bologna, the Province of Bologna and the Region of Emilia-Romagna on July 23, 2007), AdB committed to completing the connection between the "Airport" and the Terminal. Against this commitment, tangible assets in progress at December 31, 2018 includes engineering and other accessory works of Euro 0.68 million.
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Non-current financial assets December 31, 2018 include Euro 10.9 million of the equity financial instrument in Marconi Express Spa, signed by the company in January 2016 for a similar value. The final tranche of Euro 0.9 million was paid in December 2018 on works completion.
With regards to the guarantees provided, reference should be made to the summary table at December 31 presenting the two comparative years. These concern:
sureties, mainly:
o to ENAC (the Italian Civil Aviation Authority) pursuant to the Full Management Agreement (Euro 4.4 million);
o co-obligation sureties of Adb and FFM for Euro 1.03 million issued by Assicurazioni Generali in favour of the Bologna Customs Agency for various customs deposits of the subsidiary;
a pledge of the equity financial instrument issued by Marconi Express S.p.a. and subscribed for by the company for a nominal value of Euro 10.87 million, securing the obligations of Marconi Express to the credit institutions that financed the People Mover project, settled at December 31, 2017 for Euro 10 million. The Pledge on Equity Financial Instruments agreement was signed on September 30, 2016;
a letter of patronage concerning the mortgage loan granted to the subsidiary Tag Bologna S.r.l. by Banca Agricola Mantovana (now Monte dei Paschi di Siena), equal to 51% of the residual principal, which at the end of the period amounted to Euro 2.2 million.
| in thousands of Euro | 31/12/2018 | 31/12/2017 | Change | % Change |
|---|---|---|---|---|
| Sureties | 6,428 | 6,278 | 150 | 2.4% |
| Pledge on Equity Financial Instruments | 10,873 | 10,873 | 0 | 0 |
| Patronage letters | 3,779 | 2,187 | 1,592 | 72.8% |
| Total guarantees granted | 21,079 | 19,338 | 1,742 | 9.0% |
With regards to the disclosure concerning the types and means of financial risk management under Article 2428, paragraph 2 No. 6 bis, reference should be made to the specific section of the Directors' Report, also with regards to the comment upon the other risks to which the company is subject.
The company received in 2018 total grants of Euro 9.75 thousand for the training of employees as per Article 1, paragraph 125 of Law 124/2017.
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No events have occurred subsequent to year end that would require changes in terms of the presented performance or equity and financial position and that would therefore necessitate adjustments and/or additional disclosures in the financial statements.
Dear Shareholders,
the financial statements of the company Aeroporto Guglielmo Marconi di Bologna Spa, which we present for your approval, report a profit of Euro 17,100,845.83, for which the Board of Directors proposes the following allocation:
The Chairman of the Board of Directors
(Enrico Postacchini)
Bologna, March 14, 2019
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Declaration of the Chief Executive Officer and the officer responsible for the preparation of the corporate accounting documents of Aeroporto Guglielmo Marconi di Bologna S.p.A. pursuant to the provision of article 154-bis paragraph 5 TUF (Testo Unico Finanziario [Consolidated Law on Financial Intermediation] –
Bologna, 14 March 2019
(Nazareno Ventola) (Patrizia Muffato)
The Chief Executive Officer Officer in charge of preparing the corporate accounting documents
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EY S.p.A. Via Massimo D'Azeglio, 34 40123 Bologna
Tel: +39 051 278311 Fax: +39 051 236666 ey.com
To the Shareholders of Aeroporto Guglielmo Marconi di Bologna S.p.A.
We have audited the financial statements of Aeroporto Guglielmo Marconi di Bologna S.p.A. (the "Company"), which comprise the statement of financial position as at December 31, 2018, the income statement, the statement of comprehensive income, the cash flow statement, statement of changes in shareholders' equity for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.
In our opinion, the financial statements give a true and fair view of the financial position of the Company as at December 31, 2018, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and with the regulations issued for implementing article 9 of Legislative Decree n. 38/2005.
We conducted our audit in accordance with International Standards on Auditing (ISA Italia). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the regulations and standards on ethics and independence applicable to audits of financial statements under Italian Laws. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
We identified the following key audit matter.
The provisions for renewal of airport infrastructure accounted for in the financial statements as of December 31, 2018 amounts to Euro 12,0 million and includes accruals for non-recurring maintenance expenses, as well as estimated future costs for restoration and replacement of assets under concession that the Company plans to incur in accordance with the current concession agreements. The processes and methodologies applied to evaluate and determine such estimated future costs are based on complex assumptions that, due to their nature, imply the use of management's judgment, in particular with reference to the nature, timing and amount of the maintenance costs, including the relevant financial component applied based on the timing of such maintenance services. Considering the judgment required by management in order to evaluate the nature, timing and amount of such maintenance services, we believe that the valuation of the provisions for renewal of airport infrastructure represents a key audit matter.
The disclosures relating to the valuation of the provisions for renewal of airport infrastructure are included in section "Measurement Criteria" under paragraph "Provisions for risks and charges", as well as in notes 16 and 21 "Provisions for renewal of airport infrastructure".
Our audit procedures performed in response to this Key Audit Matter included, among others:
Lastly, we reviewed the adequacy of the disclosures provided in the notes to the consolidated financial statements in relation to the valuation of provisions for renewal of airport infrastructure.
The Directors are responsible for the preparation of the financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union and with the regulations issued for implementing article 9 of Legislative Decree n. 38/2005, and, within the terms provided by the law, for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
The Directors are responsible for assessing the Company's ability to continue as a going concern and, when preparing the financial statements, for the appropriateness of the going concern assumption,
and for appropriate disclosure thereof. The Directors prepare the financial statements on a going concern basis unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
The statutory audit committee ("Collegio Sindacale") is responsible, within the terms provided by the law, for overseeing the Company's financial reporting process.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing (ISA Italia) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with International Standards on Auditing (ISA Italia), we have exercised professional judgment and maintained professional skepticism throughout the audit. In addition:
We have communicated with those charged with governance, identified at an appropriate level as required by ISA Italia, regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We have provided those charged with governance with a statement that we have complied with the ethical and independence requirements applicable in Italy, and we have communicated with them all
matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we have determined those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We have described these matters in our auditor's report.
The shareholders of Aeroporto Guglielmo Marconi di Bologna S.p.A., in the general meeting held on May 20, 2015, engaged us to perform the audits of the financial statements for each of the years ending December 31, 2015 to December 31, 2023.
We declare that we have not provided prohibited non-audit services, referred to article 5, paragraph 1, of EU Regulation n. 537/2014, and that we have remained independent of the Company in conducting the audit.
We confirm that the opinion on the financial statements included in this report is consistent with the content of the additional report to the audit committee (Collegio Sindacale) in their capacity as audit committee, prepared pursuant to article 11 of the EU Regulation n. 537/2014.
The Directors of Aeroporto Guglielmo Marconi di Bologna S.p.A. are responsible for the preparation of the Directors' Report and of the Report on Corporate Governance and Ownership Structure of Aeroporto Guglielmo Marconi di Bologna S.p.A. as at December 31, 2018, including their consistency with the related financial statements and their compliance with the applicable laws and regulations.
We have performed the procedures required under audit standard SA Italia n. 720B, in order to express an opinion on the consistency of the Directors' Report and of specific information included in the Report on Corporate Governance and Ownership Structure as provided for by article 123-bis, paragraph 4, of Legislative Decree n. 58, dated February 24, 1998, with the financial statements of Aeroporto Guglielmo Marconi di Bologna S.p.A. as at December 31, 2018 and on their compliance with the applicable laws and regulations, and in order to assess whether they contain material misstatements.
In our opinion, the Directors' Report and the above mentioned specific information included in the Report on Corporate Governance and Ownership Structure are consistent with the financial statements of Aeroporto Guglielmo Marconi di Bologna S.p.A. as at December 31, 2018 and comply with the applicable laws and regulations.
With reference to the statement required by article 14, paragraph 2, subparagraph e), of Legislative Decree n. 39, dated January 27, 2010, based on our knowledge and understanding of the entity and its environment obtained through our audit, we have no matters to report.
The Directors of Aeroporto Guglielmo Marconi di Bologna S.p.A. are responsible for the preparation of the non-financial information pursuant to Legislative Decree n. 254, dated 30 December 2016. We have verified that non-financial information has been approved by Directors.
Pursuant to article 3, paragraph 10, of Legislative Decree n. 254, dated 30 December 2016, such non-financial information is subject to a separate compliance report signed by us.
Bologna, March 28, 2019
EY S.p.A. Signed by: Alberto Rosa, Partner
This report has been translated into the English language solely for the convenience of international readers.
Aeroporto Guglielmo Marconi di Bologna S.p.A. Registered Office in Bologna Share capital Euro 90,314,162 fully paid-in Enrolled in the Bologna Companies Registry at No. 03145140376 Bologna Economic & Administrative Register No. - 268716
(pursuant to Article 153 of Legislative Decree 58/1998 and Article 2429, paragraph 2 of the Civil Code)
this report, drawn up as per Article 153 of Legislative Decree 58/1998 (hereafter "CFA") and Article 2429, paragraph 2 of the Civil Code, outlines the oversight activities carried out by the Board of Statutory Auditors during financial year 2018, in compliance with the indications of Consob Communication DEM/1025564 of April 6, 2001 and subsequent amendments and supplements.
During the year, the Board of Statutory Auditors performed its supervisory activities required by law, the "Rules of conduct for Boards of Statutory Auditors of listed companies" issued by the Italian Accounting Profession (Consigli Nazionale dei Dottori Commercialisti e degli Esperti Contabili), the CONSOB provisions concerning corporate controls and activities of the Board of Statutory Auditors and the indications of the Self-Governance Code.
The Board of Statutory Auditors verified, when accepting the appointment and later during the course of the appointment, that its members met the requirements of integrity and professionalism specified by Ministerial Decree No. 162 of March 30, 2000, that there were no reasons for removal from office or ineligibility pursuant to Article 148, paragraph 3 of Legislative Decree No. 58/1998 and that they met the same independence requirements that apply to directors under the Self-Governance Code.
The execution of the accounting and statutory audits is assigned to the Independent Audit Firm EY S.p.A. (hereinafter the "Independent Audit Firm" or "EY"), following appointment for the financial years 2015-2023 by the Shareholders' Meeting of May 20, 2015.
The following is reported based on information obtained during meetings of the Board of Directors and Internal Committees to the Board (the Control and Risks Committee and the Remuneration Committee) and through meetings with corporate departments and as a result of audits performed.
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The Board of Statutory Auditors considers that sufficient information was obtained on significant economic, equity and financial transactions carried out by the company, as shown in the documents that comprise the consolidated and separate financial statements and in the Directors' Report.
It should be noted that, in order to improve the airport's connectivity and intermodal transport, on January 21, 2016, the company subscribed to an equity financial instrument (EFI) for an amount of Euro 10,872,500, issued by Marconi Express S.p.A., the concession holder for the People Mover project (the railway link between Bologna Central Station and the Bologna Airport). Euro 4 million of the investment in the EFI was released on its subscription date, Euro 3 million in 2016 when work progress reached 20% and Euro 3 million in July 2017 when work progress reached 51%; the balance was paid in December 2018 on the completion of works. Moreover, the first two tranches were paid for a total of Euro 1,780,000 of the contribution amounting to Euro 2,700,000, granted by the company to Marconi Express S.p.A. for the construction of the People Mover "Airport" station. AdB is in addition completing the pedestrian bridge linking the Terminal and the "Airport" station. Furthermore, in order to better control the AdB general aviation infrastructure, on October 2, 2018, it acquired 49% of TAG Bologna S.r.l., which is now therefore wholly-owned.
No atypical or unusual transactions carried out in 2018 emerged from the information received from the Directors and from meetings with representatives of the Independent Audit Firm, including any inter-company or related party transactions. The Board did not receive communications from subsidiaries' Control Bodies or from the Independent Audit Firm, containing findings in this respect.
The characteristics of inter-company transactions carried out during the year, the parties involved and the corresponding financial effects are suitably reported in the Notes to the company's separate and consolidated financial statements, which also set out the related receivables/payables and cost/revenue transactions.
Related party transactions, implemented in compliance with the applicable "Related Party Transaction Policy" adopted by the Board of Directors in the meeting of April 13, 2015, are of an ordinary nature and principally concern commercial and financial transactions, in addition to participation in the tax consolidation. These transactions are also listed in the Notes to the company's separate and consolidated financial statements, which also set out the related
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receivables/payables and cost/revenue transactions, and the fact that these transactions will be carried out at normal market conditions.
In exercising its functions pursuant to Article 2403 of the Civil Code and Article 149 of the CFA, the Board of Statutory Auditors:
• verified compliance with law and the company's By-Laws;
• continuously obtained information from Directors on the activities performed, the general operating performance and its outlook, in addition to significant economic, equity and financial transactions carried out by the company, including through its subsidiaries, and in relation to such can reasonably assure that approved and executed transactions are in conformity with law and the by-laws of the company and were not manifestly imprudent, risk-related, in conflict of interest or contrary to the motions passed by the Shareholders' Meeting, or such as to compromise the integrity of company assets;
• oversaw the adequacy of the indications to the subsidiaries as per Article 114, paragraph 2 of Legislative Decree No. 58/1998, ensuring that subsidiaries' coordination activities (Fast Freight Marconi S.p.A and TAG Bologna S.r.l.) are also carried out through the presence of Parent Company executives on the corporate boards;
• exchanged information with subsidiaries' corresponding boards pursuant to Art. 151, paragraph 2 of Legislative Decree 58/1998;
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• held periodic meetings with the Independent Audit Firm, also in accordance with the provisions of Article 19, paragraph 1 of Legislative Decree No. 39/2010 and Article 150, paragraph 3 of the CFA, in order to supervise the financial disclosure process and its suitability and integrity, as well as compliance with legal provisions concerning the formation of financial statements, their layout and structure;
• verified the suitability of the administrative and accounting system and its capacity to accurately reflect operating events by obtaining information from managers of the respective departments and analysing the results of work carried out by the Independent Audit Firm. The certification as per Article 154-bis, paragraph 5 of Legislative Decree No. 58/1998, signed by the Chief Executive Officer and the Executive Officer for financial reporting, on the adequacy of the administrative and accounting procedures for the drafting of the statutory financial statements and the consolidated financial statements are annexed to these documents;
• acquired information and supervised the suitability of the company's organisational structure and the internal control system, including through participation in the meetings of the Control and Risks Committee. The Board of Statutory Auditors examined the assessment expressed by the Board of Directors in the meeting of March 14, 2019, on the basis of the preliminary report undertaken by the Control and Risks Committee, which considered AdB's internal control and risk management system to be generally suitable with respect to the characteristics of the company and the risk profile assumed.
• verified the internal audit manager's activity, taking note of his observations during periodic audits and examining the content of the drafted annual report which highlights that AdB's internal control and risk management system, despite some areas for improvement, is generally considered suitable to guarantee sound and correct business conduct in line with pre-set objectives;
• examined the annual disclosure report of the Supervisory Board relating to the updating of the Model, training activities performed, control on the functioning and compliance of the Model pursuant to Legislative Decree No. 231/2001, from which no significant events emerged;
• reviewed the report of the Ethics and Anticorruption Committee (a collective body which replaces the position of Prevention, Transparency and Anticorruption Manager (RPCT)), which has been assigned the duty to monitor and verify the effective implementation of the "Anticorruption Policy" and reviewed the activities carried out;
• did not receive any statements pursuant to Article 2408 of the Civil Code, nor any petitions from third parties;
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• verified the correct application of assessment criteria and procedures adopted by the Board of Directors to assess the independence of its members and has no observations to make in this regard;
• supervised compliance with the corporate governance rules laid down by the Self-Governance Code of listed companies, issued by Borsa Italiana and approved by the Corporate Governance Committee, to which the company declared and confirmed its compliance. The governance system adopted by the company is described in detail in the Corporate Governance and Ownership Structure Report for the year 2018, approved by the Board of Directors in the meeting of March 14, 2019;
• supervised the independence of the Independent Audit Firm EY S.p.A., pursuant to Article 19 of Legislative Decree 39/2010 and, in its concomitant capacity of Internal Control and Audit Committee, ascertained the compatibility of services, other than the statutory audit provided to the company, with the limitations envisaged by Article 5 of EU Regulation No. 537/2014. In 2018, the company paid Euro 87,306 in fees to EY S.p.A. for assignments involving audit services and the auditing of regulatory accounts, while the subsidiaries (Fast Freight Marconi S.p.A and TAG Bologna S.r.l.) paid Euro 13,369 for auditing services, in addition to Euro 8,836 for the CONSOB oversight contribution. In addition, the following non-audit services assignments were conferred by the Parent Company to EY S.p.A.: the provision of assistance in the performance of "Test controls" under the obligations and requirements referred to in Law 262/2005 (Euro 36,641), the support activities concerning the analysis of the impacts of the new accounting standards IFRS 9, IFRS 15 and IFRS 16 (Euro 12,800), the review of the requirements concerning the Non-Financial Information Report (Euro 8,800) and the certifications for the purposes of Legislative Decree No. 118 of June 23, 2011 (Euro 6,480). The Independent Audit Firm issued the "Statement of Independence" certifying that no situations were in place that may compromise their independence nor were there grounds for incompatibility in respect of AdB. Considering the above statement, it should be noted that no critical aspects emerged that could have compromised the Independent Audit Firm's independence.
The current Board of Directors was appointed by the Shareholders' Meeting of April 27, 2016 and will remain in office until the approval of the Financial Statements as at December 31, 2018.
The Board of Directors shall comprise nine members. Eight directors are non-executive, while five of these are independent as envisaged by Article 147-ter, paragraph 4, of Legislative Decree 58/1998 and as per the Self-Governance Code. On January 29, 2018, the Board of Directors
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replaced through co-option the resigning director Arturo Albano with the new non-executive and independent director Livio Fenati. Following his resignation, the Board of Directors on November 14, 2018 co-opted the director Marco TRONCONE. The Board of Statutory Auditors expressed a favourable opinion on the appointments in question, pursuant to Article 2386, paragraph 1 of the Civil Code.
During 2018, the Board of Statutory Auditors attended:
the Shareholders' Meeting of April 24, 2018;
11 Board of Directors' meetings;
4 Control and Risks Committee meetings;
5 Remuneration Committee meetings;
In all the above meetings, the Board of Statutory Auditors always received sufficient information on activities performed and the nature of transactions carried out. The undersigned Board of Statutory Auditors held 7 meetings. In 2019 (and until the date of this report), the Board of Statutory Auditors met on 3 occasions.
In the course of the supervisory activities carried out and based on the information obtained from the Independent Audit Firm during periodic meetings, pursuant to Article 150, paragraph 3 of Legislative Decree 58/1998, no significant data and information were noted that would need to be highlighted in this report, nor were there omissions and/or citable events and/or irregularities or, in any case, significant matters meriting mention in this report.
As per Article 3, paragraph 7 of Legs. Decree No. 254 of December 30, 2016, it is confirmed that, with regards to the Non-Financial Information Report, the Board of Statutory Auditors oversaw, to the extent of its remit, compliance with the provisions set out in the stated decree. The company appointed EY S.p.A. as the auditor, and to also undertake the tasks as per Article 3, paragraph 10 of the decree. The Independent Audit Firm issued a certification upon the consistency of the information provided in the Non-Financial Information Report against that required by Articles 3 and 4 of the decree and the reporting standard adopted.
The Board of Statutory Auditors carried out the necessary audits on compliance with the rules concerning the compilation of the statutory financial statements and Group consolidated financial statements as at December 31, 2018, approved by the Board of Directors on March 14, 2019, in accordance with the terms established by law. In particular, it acknowledges that the separate and
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consolidated financial statements were drawn up in compliance with International Financial Reporting Standards adopted by the European Union and that the company applied the format of financial statements and company information as established by CONSOB. Compliance with regulations relating to the preparation of the Directors' Report was verified and, in this regard, there are no particular matters to report. With reference to its content, we point out that this Directors' Report sufficiently illustrates the operating result, cash flows, financial position and operating performance during the year and provides significant data concerning the company within the scope of consolidation, also providing information on the principal risks and uncertainties which the company is exposed to.
On March 28, 2019, the Independent Audit Firm EY S.p.A. issued the reports pursuant to Article 14 of Legislative Decree No. 39 of January 27, 2010 and Article 10 of Regulation (EU) No. 537/2014, in which it declared that the separate and consolidated financial statements at December 31, 2018, provide a true and fair view of the statement of financial position, the result and cash flows of the company and the Group and that the Directors' Report and information contained in the Corporate Governance and Ownership Structure Report indicated in Article 123-bis, paragraph 4 of Legislative Decree 58/1998, are consistent with the company's statutory financial statements and Group consolidated financial statements.
The Independent Audit Firm also produced the Additional Report indicated in Article 11 of Regulation (EU) No. 537/2014 which denotes that there were no significant deficiencies in the internal control system or in the administrative and accounting system of the company.
The Board of Statutory Auditors concludes this Report on auditing activities carried out during 2018 by expressing a positive opinion on the activity performed by the company, its organisation, the effectiveness of the internal control system and the administrative and accounting system, compliance with the principles of correct administration and compliance with law and the By-Laws and, also in view of the results of the activity performed by the Independent Audit Firm appointed for the financial audit, expresses a favourable opinion on the approval of the financial statements at December 31, 2018 as drafted and approved by the Board of Directors in the meeting of March 14, 2019, and are in agreement with the proposal of the allocation of the net profit by the Board of Directors.
Aeroporto Guglielmo Marconi di Bologna S.p.A. 223
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version shall prevail.
We restate that, with the approval of the statutory financial statements for the year ended December 31, 2018, the mandate of the Board of Directors and the Board of Statutory Auditors concludes. The Shareholders' Meeting is therefore called to re-appoint these Boards.
Bologna, March 28, 2019 The Board of Statutory Auditors Pietro FLORIDDIA - Chairman Ms. Anna Maria FELLEGARA Mr. Matteo TIEZZI
Aeroporto Guglielmo Marconi di Bologna S.p.A. 224
This document is a courtesy translation from Italian into English. In case of any inconsistency between the two versions, the Italian original version
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