Relatório e Contas Consolidado 2002/2003

Transcription

1 Relatório e Contas Consolidado 2002/2003

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3 0.1 Chairman s Message The 2002/2003 season will always be remembered as one of the greatest in the history of FC Porto. The unforgettable times we have lived through during the fantastic victories in all competitions highlight the singularity of the success achieved. It has been through football and FC Porto in particular that Portugal has shown vitality and assumed an unusual competitive capacity in a European context. FC Porto represented Portuguese football at the highest level and shone; shone because of their winning mentality and the spirit of success present in their work, methodology and professionalism. The strength of FC Porto is based on the support of shareholders, members, supporters and commercial partners, who have always had faith in this project. The PortoGaia Sports Training Centre was the ideal place for the team to prepare and develop these ideals. We are proud of what we have achieved but are even more ambitious today than we were yesterday. This was the last full season at the Antas Stadium. We are going to leave behind the stage for many happy occasions, but we are moving towards a new dawn and towards further success in the future. The victories and capacity crowds of 2002/2003 have served to immortalise a stadium which we will always remain in our hearts. The new Dragão Stadium is a dream come true, unequivocal proof that everything is possible at FC Porto. We are, therefore, on the right track. The FC Porto Futebol, SAD (Sporting Plc) Board of Directors undertook a policy of containment and have responded effectively to the new demands of a market in crisis. The size of the squad has been reduced, fixed costs have been decreased, but efficiency has been maintained. The bringing together of this philosophy of success and the increased receipts expected from the running of the new Dragão Stadium allow us to look to the near future with great optimism. The future is clear. Chairman of the Board of Directors Jorge Nuno Pinto da Costa

4 Chairman s Message 02 Corporate Bodies 03 Development of Company Business 04 Relevant Information from after the Close of Financial Year 05 Future Prospects 06 Proposal for the Application of Results Consolidated Financial Statements and Annexes 01 Consolidated Balance Sheet 02 Consolidated Income Statements by Natures 30 Consolidated Income Statement by Cost Area 04 Notes to the Consolidated Financial Statements 05 Consolidated Cash-Flow Statements 06 Statutory Certification of Accounts 07 Audit Report 08 Auditing Committee Report Corporate Governance Report 01 Publication of Information 02 Exercise of the Right to Vote and Representation for Shareholders 03 Company rules 04 Board of Directors Qualified Shareholders Management Report Management Report 01

5 General Assembly 0.2 Chairman Fernando Arnaldo Sardoeira Pinto Secretary Miguel Angelo Abreu Bismarck Corporate Bodies Board of Directors Chairman Jorge Nuno de Lima Pinto da Costa Members Adelino Sá e Melo Caldeira Fernando Soares Gomes da Silva Reinaldo da Costa Teles Pinheiro Rui Miguel Duarte Alegre Auditing Committee Chairman Domingos José Vieira de Matos Member Ledo, Morgado & Associados - Sociedade de Revisores Oficiais de Contas, represented by José Carlos de Carvalho Velez Joaquim Manuel Sousa Ribeiro Substitute Jorge Bento Martins Ledo Company Secretary Daniel Lorenz Rodrigues Pereira Substitute Urgel Ricardo Santos Brandão Horta Martins Advisory Board Jorge Nuno Pinto da Costa Alípio Dias Adolfo Roque Álvaro Pinto Álvaro Rola Américo Amorim António Gonçalves António Lobo Xavier Armando Pinho Artur Santos Silva Augusto Paranhos Domingos Matos Fernando Pimenta Ilídio Pinho Ilídio Pinto João Nuno Macedo Silva Jorge Armindo Ludgero Marques Nuno Cardoso Rui Barros

6 Futebol Clube do Porto - Futebol S.A.D. Annual Report Development of Company Business Football 2002/2003 was the golden season for FC Porto. The victory in the UEFA cup was the highest point of an extremely successful year which fills all supporters with pride. The 2002/2003 season, which will always remain in the memory of every Porto supporter, probably began with the decision to sign a contract with José Mourinho during the 2001/2002 season. The technical team headed by José Mourinho had the opportunity to get to know a group of players which soon demonstrated its capacity to achieve great results. It was, however, the decisions regarding the formation of the squad for the 2002/2003 season which opened the way to success. One of these decisions was the return of the captain Jorge Costa, which was crucial to the achievements during the campaign. The investment carried out included the acquisition of the following players: César Peixoto Derlei Jankauskas Maniche Marco Ferreira Nuno Espírito Santo Nuno Valente Paulo Ferreira Pedro Emanuel Tiago These players brought much more than an improvement in the quality of the squad. They also raised moral, brought humility and strengthened the winning mentality of the squad, all indispensable for a group of good players to become a winning team. The 2002/2003 Super League was unquestionably dominated by FC Porto and culminated in a total of 86 points, which came from 27 victories, five draws and two defeats, with 73 goals scored and 26 goals conceded. The top scorer for FC Porto was Hélder Postiga with 13 goals. Winning the Super League guaranteed the presence of FC Porto in the 2003/2004 UEFA Champions League. The season was also marked by victories in every game against FC Porto s main rivals for the Portuguese League title. It can be seen in the graph below that FC Porto has dominated Portuguese football, with six national titles in the last ten years. Portuguese League Standings In the Portuguese cup FC Porto lifted the trophy after eliminating Trofense, Gil Vicente, Guimarães, Varzim, Naval and União de Leiria. The final, at the National Stadium in Lisbon, was an extraordinary outpouring of joy, support and affection by our supporters, who had from across the whole country to completely fill the stadium for this event. They had the good fortune to watch the conquest of another trophy with victory over União de Leiria from a solitary Derlei goal. The 2002/2003 UEFA Cup placed high-quality opposition in the path of FC Porto. Having overcome competition from Warsaw, Vienna, Lens and Denislizpor, the draw produced a tie with Panathinaikos, against whom FC Porto had already played in previous editions of the UEFA Champions League. After the one-nil home defeat at the Antas Stadium, there were few who believed that the tie could be turned around. However, a fantastic demonstration of ambition, desire and quality produced a two-nil victory in the intimidating atmosphere produced by the Greek public. This could be seen as the decisive 11

7 Report Futebol Clube do Porto - Futebol S.A.D. Annual Report Breakdown of Income game in the competition and was certainly a demonstration that FC Porto were more than capable of winning the trophy. The semi-finals produced Lazio as opponents, a club from one of the most competitive championships in the world. The 4-1 victory at the Antas Stadium, after Lazio scored right at the beginning of the game, opened the doors to the final in Seville. The goalless draw in Rome then sealed access to the deciding game of the UEFA cup. Seville will remain in the memory as the crowning glory of the 2002/2003 FC Porto. An explosive atmosphere surrounded the game and with two attack-minded teams and lots of goals there was emotion in every minute of the game. A deserved three-two victory was the final result. This game will go down in the history books of world football. This victory guaranteed participation in the final of the European Super Cup, which was played in Monaco against the winners of the UEFA Champions League. Portuguese League Classification Points Top Scorer FCP Goal-Average Europe 2000/2001 2nd 76 Pena (22) /4 Final UEFA 2% Others 12% TV 27% Transfer Fees 20% Sponsorship 2001/2002 3rd 68 Deco (13) nd Phase CL The trophies won during the season and the quality shown by the squad in stadiums across the whole of Europe allowed the realisation of capital gains through transfers and loans of athletes totalling 15 million EUR; the majority of which came from the transfer of the young player Hélder Postiga to Tottenham Hotspur. This income from transfers represents 27% of the total receipts of the company in the financial year. The realisation of capital gains took place within a transfer market stagnant across the whole of Europe. The policy of equipping the team with highquality athletes has not only provided excellent sporting results, but has also resulted in improving the potential of most of the company s sources of income, particularly the growth of receipts from transfers; an essential factor for the financial equilibrium of the company. These receipts rose from 3.6 million EUR in 2000/2001 to 15 million EUR in 2002/2003. In the last five financial years, only in 2000/2001 were significant capital gains not obtained through transfers, not as a result of a lack of interest by the market in FC Porto players, but resulting from a strategic option of the company. The 2002/2003 financial year was still not the year which marked a definitive turning point towards financial equilibrium. However, the fulfilment of the budget presented to the shareholders in November 2002, seems to indicate that the management vigour is reaping rewards. While the budget voted by the shareholders showed a negative result of 17 million EUR, the results for the financial year showed a loss of 18 million EUR. However, if we analyse the change in Operating Cash Flow over the last three years, using EBITDA, it will be seen that this indicator improves, rising from -4.2 million EUR in 2000/2001 to +4.6 million EUR this financial year. 3,4 18% Ticketing 16% UEFA Competitions 2002/2003 1st 86 Postiga (13) UEFA Cup Winner FC Porto - Futebol, SAD EBITDA 5% Merchandising Transfer Fees 15,0 12,9 4,6 3, The income from commercial partnerships has also grown at a sustained rate. The agreements with FC Porto leading commercial partners such as Nike, Revigrés, PT and BES, have provided an important source of income, the variable component of which, as a result of the victories during the season, has seen a notable increase. The sale of corporate seating at the Antas Stadium continues to be a success, a fact demonstrated by the clear excess of demand over available seating. In this particular area, as well as in other business areas, starting to utilize the Dragão Stadium, in future financial years, will bring a considerable increase on turnover ,2 In what concerns to the cash-flow, we can conclude, by analysing the graphic, that this indicator as improved during the last three years. Cash-Flow Sponsorship 1, ,0 1,8 9,4 7, ,3 The change in EBITDA and the Cash Flow of the company shows the tendency for improvement of the company current account in the last three years

8 Report Futebol Clube do Porto - Futebol S.A.D. Annual Report Receipts from ticketing (tickets, season tickets and shares) increased 26%. The entertainment for supporters rose in quality, the victories provided moments of great entertainment, emotion and uncertainty. The brilliant run in the UEFA Cup and the fact that the UEFA cup games at Antas Stadium were not broadcast live, contributed decisively to this increase. Ticketing Breakdown of Costs 27% Depreciations 8,5 9,5 7,1 51% Personnel Costs 4% Others 15% FSE s 3% Financial Costs The television market has cooled slightly, which the change in respective income highlights. FC Porto opted not to broadcast the UEFA Cup games this year because the offers made by broadcasters were not sufficiently attractive, opting instead for good gate receipts and greater support from supporters in the stadium. TV 10,5 Beside the salary costs, those relating to amortisation, which are largely intangible and reflect the investment in the acquisition of players, are a considerably portion of total costs, reaching 27% in 2002/03. An important indicator in a sports company relates to the value of the total income which is absorbed by salary costs. This ratio should preferably be under the 60%. In the last three years this ratio has stabilized between these limits, with the management strategy being to continue efforts to reduce this ratio until it stabilises at around 55%. Wages vs Turnover % 6, % 5, % As regards participation in European competition, the excellent performances on the pitch this season brought notable financial rewards from victory in the UEFA Cup; with an appearance in the final of the European Supercup also guaranteed as a result. Therefore, the income from being present in this final, 1.3 million EUR, is accounted for in the financial year under analysis. First place in the 2002/2003 Super League guaranteed automatic access to the 2003/04 UEFA Champions League. The financial structure of this competition is such that payment is made to participating clubs for their participation in the competition (in other words the fixed part whose receipt is guaranteed) and also according to results in the competition, for victories achieved, for passage to later stages of the competition and also from the distribution of money from the television market, paid according to the proportion of the money paid by the television broadcaster of the respective country. There is no longer a second group stage of the UEFA Champions League, which has been substituted by a knockout round before the 1/8 finals; a fact which increases the emotion surrounding the entertainment and uncertainty regarding the result, factors which attract spectators to the game. The cost structure shows that personnel costs have a significant weight in the budget of the company. The salaries of the athletes are the factor with the greatest influence over their economic performance. In 2002/2003 these costs represented 51% of the respective total costs. In this period, the value of the personnel costs includes bonuses paid for winning the UEFA Cup, the Super League, and Portuguese Cup. The asset structure worsened as a result of the deficit presented for the financial year. Company share holdings, at 30th June 2003, are approximately 16 million EUR. Financial autonomy of the company decreased from 19% at the end of the first quarter to 18% at the end of the financial year Total Assets Shareholder s Total Liabilities Financial Autonomy 40% 19% 18% The liabilities of the company at were 74 million EUR. However, due to contracting a long term loan, it verifies a reduction of 11% of short term liabilities and an increase of the medium and long term liabilities. The accounted value of the athletes under contract has seen a gradual reduction, decreasing from 39 million EUR at the end of 2000/01 to 35 million EUR on 30/6/2003. This is a result of the reduction of the number of players under contract and the tendency towards a reduction in the investment in new players Book Value of the Players PortoComercial PortoComercial is the commercial arm of the group of companies connected to FC Porto. Its commercial activity has grown in the last three years, as the chart below of the change in turnover of the company between 2000/2001 and 2002/2003, which shows a growth rate of 21%, clearly indicates. Deals already agreed comprise sponsorship and include the right to watch FC Porto games in specially designed corporate boxes, receipts from licensing of products with the registered FC Porto trademark and the sale of products through various existing means of distribution, mainly the network of Lojas Azuis (club shops) in Porto

9 Report Futebol Clube do Porto - Futebol S.A.D. Annual Report PortoComercial - Turnover 7,70 8,42 9,35 8,72 05 Future Prospects Cash flow at the close of 2002/03 was approximately 1.8 million EUR and the negative net result was approximately 18 million EUR, in line with the previous financial year. The Board of Directors believes it is fundamental to rebalance the profit account of the company through a combination of the following two factors: impact on receipts of beginning utilisation of the Dragão stadium reduction on the investment on new players and in personnel costs Budget In the next financial year, given that the commercialisation of corporate business will instead be developed by FC Porto, the turnover of PortoComercial, in this specific area, will diminish considerably. This alteration is part of a finance project designed to finance the construction of the Dragão stadium in which FC Porto retains the respective trading rights, and PortoComercial is entrusted with the effective marketing of corporate hospitality, for which there is commission for service provision. From November 2003 F.C.Porto - Futebol, SAD will begin using the new Dragão Stadium as the stage for its games. This modern infrastructure will provide an opportunity for growth in the receipts of the company on various levels, particularly through access for members, the public and companies to sporting events. The participation of FC Porto in the UEFA Champions League could increase the impact of opening the stadium. As a specific example, at the time of producing this report, it can already be confirmed that receipts from the sale of season tickets (only to individuals) will more than double this year s number. The impact will go far beyond this and be remarkable in the future both in other areas of company business and in other companies related to FC Porto. We now present the provisional evolution of Operational Cash-Flow (EBITDA) and the wage costs over turnover. PortoEstádio PortoEstádio is a company specially conceived and orientated for the management of sporting facilities, facilities which include the sports training centre EBIDTA 17,0 Wages vs Turnover and the new Dragão stadium. With the sports training centre opening this financial year, the activity of PortoEstádio regarding the management of this infrastructure conforms to the contract agreed with the owner, FC Porto. The principal client and user of this facility is FCP SAD. This financial year Porto stadium presented a turnover of about 110,000 EUR and a net result of approximately EUR % PortoMultimédia The activity of PortoMultimédia consists of the management of the FC Porto internet website ( In the last 12 months efforts have been made to adapt the contents to the commercial needs of FC Porto and to the interests of supporters of the club. A project has also been developed which denies access to certain parts of the web site and instead has introduced a quality service (premium service) with access to specific contents and which includes the transmission of training and exclusive live interviews. Tickets have also begun to be sold online. This financial year PortoMultimédia turnover was about 400,000 EUR and the net result was approximately -55,000 EUR. 4, Budget Bud The Board of Directors, in accordance with article 35 of the Commercial Law Code, intends to call an Extraordinary General Meeting, within the legal limits, to discuss and approve the proposals to be presented, which can be summarised as the following alternatives: 50% 04 Relevant information from after the close of financial year The closed season allowed some adjustment to the make-up of the squad, with the exit of players such as Paulinho, Capucho, Clayton and Postiga, and the acquisition of Benny McCarthy, Bosingwa, Ricardo Fernandes and Pedro Mendes. The final of the Cândido de Oliveira Supercup was played in Guimarães on the 10th August between the national champions and the defeated finalists in the Portuguese Cup, União de Leiria. The result was the lifting of another trophy by FC Porto, indicating a 2003/04 season in the image of the previous one. The European Super Cup was played in Monaco on the 29th of August 2003, a game of champions between AC Milan and FC Porto. The Italian team won the trophy with a goal from the Ukrainian Shevchenko giving them a one-nil victory. 06 reduction in share capital to cover the accumulated negative results; sale of shares to allow, at least, two-thirds coverage of share capital; combination of these two alternatives. Proposal for the application of results In the 2002/2003 financial year the individual accounts of Futebol Clube do Porto - Futebol, SAD showed a negative net result of ,04 Euros. According to article 376 of the Commercial Law Code, the Board of Directors proposes the following application of losses occurred during the financial year: Retained Earnings: ( ,04 Euros) Porto, 30th September