CONSOLIDATED MANAGEMENT REPORT 11
CONSOLIDATED PROFIT AND LOSS ACCOUNT (€ millions)
2014
2013*
2014/2013
€ Millions
%
€ Millions
%
VAR. %
Income from the hotel business
1,265.1
97.7%
1,252.6
96.5%
1.0%
Non-recurring income
29.8
2.3%
45.0
3.5%
(33.7%)
TOTAL INCOME
1,294.9
100.0%
1,297.6
100.0%
(0.2%)
Staff costs
(460.0)
(35.5%)
(450.0)
(34.7%)
2.2%
Direct management costs
(413.2)
(31.9%)
(404.1)
(31.1%)
2.3%
Non-recurring costs
(24.4)
(1.9%)
(22.6)
(1.7%)
8.1%
OPERATING PROFIT
397.2
30.7%
420.9
32.4%
(5.6%)
Reversal of provision for onerous contracts and other
16.1
1.2%
12.4
1.0%
30.0%
Leases and property tax
(281.7)
(21.8%)
(287.7)
(22.2%)
(2.1%)
Non-recurring leases and property tax
(2.4)
(0.2%)
(3.4)
(0.3%)
(27.9%)
EBITDA
129.1
10.0%
142.1
11.0%
(9.1%)
Provision for impaired assets
5.2
0.4%
(3.8)
(0.3%)
(236.4%)
Depreciation
(89.1)
(6.9%)
(88.9)
(6.8%)
0.3%
Non-recurring depreciation
(12.3)
(0.9%)
(11.7)
(0.9%)
4.8%
EBIT
32.9
2.5%
37.7
2.9%
(12.6%)
Financial expenses
(49.9)
(3.9%)
(57.9)
(4.5%)
(13.9%)
Non-recurring finance costs
(1.0)
(0.1%)
(11.1)
(0.9%)
(91.3%)
Non-recurring exchange differences
0.0
0.0%
7.6
0.6%
(100.0%)
Change in fair value of financial instruments
(2.0)
(0.2%)
1.9
0.1%
(207.4%)
Results of entities accounted for using the equity method
(1.6)
(0.1%)
(1.8)
(0.1%)
(12.5%)
Non-recurring results of entities accounted for using the equity
method
33.8
2.6%
(6.7)
(0.5%)
(604.3%)
EBT
12.2
0.9%
(30.4)
(2.3%)
(140.3%)
Corporation Tax
(22.7)
(1.8%)
(9.6)
(0.7%)
136.7%
PROFIT before minority interests
(10.4)
(0.8%)
(40.0)
(3.1%)
(73.9%)
Minority interests
0.9
0.1%
(1.5)
(0.1%)
(157.9%)
NET PROFIT
(9.6)
(0.7%)
(41.5)
(3.2%)
(77.0%)
Note: This consolidated income statement, on which the accounting aggregates of this Director’s Report are based, was prepared using hotel management grouping criteria that do not necessarily
coincide with the accounting principles and rules applied in the preparation of the consolidated financial statements of the NH Hotel Group. Further, the balances relating to 2014 are shown without
the retrospective application of the changes in legislation.
In 2014, NH Hotel Group obtained annual revenues amounting to €1,265.1 million, up by 1% on the previous year, representing an increase of €12.5 million.
It should be noted that this improvement is more significant when we take into account the loss of contributions from the hotels which left the scope
of consolidation last year, and the unfavourable exchange rate. If we discount these effects, revenue would have grown by 4.0% and EBITDA by 10.1%.
Operating costs increased slightly, in line with the Group’s increased activity, basic salary increases for unionised personnel in Central Europe, and the
costs associated with implementing the Strategic Plan and reinforcing operational, sales, website, revenue management and marketing personnel.
The Company was able to reduce total lease expenses by -2.1% in the twelve months of 2014 due to renegotiating agreements, mainly in Spain and
Italy, abandoning agreements with negative contributions, and offsetting increases resulting from negotiations in previous years and CPI revisions. In
the twelve months of 2014, 61 actions were carried out on leased hotels, achieving the cancellation of five leases, worth €0.7 million. These actions led
to annual savings of €10.7 million, of which approximately €6 million long-term. In the fourth quarter annualised savings of €0.8 million were achieved.
In 2014 the Group’s net interest expense was €49.9 million, a reduction of -13.9% compared to the previous year. This was largely due to the downward
trend of the Euribor, the reference interest rate for most of the Group’s variable interest rate debt, and the reduction of debt and margins due to the
refinancing of much of the Group’s debt, which was formalised in November 2013.
The change in Corporate Income Tax expense compared to 2013 corresponds to the approval of tax reform in Spain, where the tax rates applicable to
resident companies will be 28% in 2015 and 25% in 2016 and following years. Due to this regulation, the company has updated its tax credits.
In 2014, the negative result before tax of NH Hotel Group amounted to €10.4 million which, after applying corporation tax of €22.7 million, and non-
controlling interests, €0.9 million, produced net loss of €9.6 million.
