This section provides corporate and group information about Basic-Fit N.V. (the 'Company') and its subsidiaries (together with the Company referred to as the \u2018Group\u2019 and individually as \u2018Group entities\u2019).\u00a0
Basic-Fit N.V. is a company incorporated in the Netherlands and whose shares are publicly traded. The Company\u2019s registered office is at Wegalaan 60, Hoofddorp, the Netherlands. The Company is domiciled in the Netherlands and registered at the Chamber of Commerce in Amsterdam under trade registration number 66013577.
The Group is active in six countries: the Netherlands, Belgium, Luxembourg, France, Spain and Germany.
With 1,200 clubs and 3,350,000 memberships as at 31 December 2022, Basic-Fit is the largest fitness chain in Europe. Basic-Fit aims to provide affordable, innovative and high-quality fitness that is available to everyone, anytime, anywhere and in their own way.
The Group's consolidated financial statements for the year ended 31 December 2022 were authorised for issue in accordance with a resolution of the Management Board on 13 March 2023.
These consolidated financial statements reflect all of the assets, liabilities, revenue, expenses and cash flows of the Group. The Group consists of the following legal entities:
Basic-Fit N.V., Hoofddorp (the Netherlands)
Basic Fit International B.V., Hoofddorp (the Netherlands) (100% interest of Basic-Fit N.V.)
Basic Fit Nederland B.V., Hoofddorp (the Netherlands) (100% interest of Basic Fit International B.V.)
Basic-Fit Belgium B.V., Jette (Belgium) (99.6% interest of Basic Fit International B.V. and 0.4% of Basic Fit Nederland B.V.)
HealthCity Belgi\u00eb N.V., Jette (Belgium) (100% interest of Basic-Fit Belgium B.V.)
Basic-Fit Luxembourg S.A., Sandweiler (Luxembourg) (100% interest of Basic Fit International B.V.)
\u00adBasic Fit France S.A., Paris (France) (100% interest of Basic Fit International B.V.)
Basic Fit II S.A., Paris (France) (100% interest of Basic Fit France S.A.)
Basic-Fit Spain S.A., Madrid (Spain) (100% interest of Basic Fit International B.V.)
Basic-Fit Germany GmbH, D\u00fcsseldorf (Germany) (100% interest of Basic Fit International B.V.)
BF Developments B.V., Hoofddorp (the Netherlands) (100% interest of Basic Fit International B.V.)
B-Securit\u00e9 B.V., Hoofddorp (the Netherlands) (51% interest of BF Developments B.V.)
Basic Fit International B.V. is an intermediate holding company and operates as international headquarters of the Group.
Basic Fit France S.A. and BF Developments B.V. are intermediate holding companies and do not run fitness clubs or undertake other operations.
B-Securit\u00e9 B.V. is involved in the remote surveillance of a number of the fitness clubs that are operated by the Group.
In March 2022, Basic-Fit International B.V. acquired1 100% of HealthCity Germany GmbH, subsequently renamed to Basic-Fit Germany GmbH.
On 31 December 2022, Basic-Fit\u2019s main shareholders were, as reported to the Dutch Financial Markets Authority (AFM):
Ren\u00e9 Moos (AM Holding B.V.): 14.3%
Impactive Capital LP: 10.1%
North Peak Capital Management, LLC: 10.0%
OLP Capital Management Limited: 6.8%
3i Group plc ('3i') and funds managed by 3i: 6.6%
Our CFO, Hans van der Aar, owns 116,428 shares (0.2%).
This section starts with a summary of the impact of COVID-19 on the Group.
Furthermore, this section provides additional information about the overall basis of preparation that the Management Board consider is useful and relevant in understanding these financial statements, including the following:
Summary of other significant accounting policies affecting the results and financial position of the Group, including (if applicable) changes in accounting policies and disclosures during the year
Summary of areas that involve significant judgements and estimates
Standards that have been issued but not yet adopted by the Group
In 2022, the Group increased its network by 185 clubs to 1,200 clubs. At the end of 2022, Basic-Fit had a record number of 3.35 million memberships, compared with 2.22 million at 31 December 2021 (at a time that Basic-Fit was still negatively impacted by COVID-19 related restrictions in 2020 and 2021). Furthermore, in 2022 the average number of members per mature club increased by 26% and reached pre-COVID-19 levels. This means that the mature clubs have fully recovered from two years defined by the pandemic.
In 2020 and 2021, in direct response to the COVID-19 pandemic, several restrictions were implemented, such as temporary closings, a limitation on the number of members in a club and the obligation to wear a facemask. Members also had to reserve a timeslot to do their workout and at some point had to show a health pass to enter the clubs. In April 2022, the last government restrictions were lifted and members were once again free to enter all clubs without limitations, which resulted in a strong increase of memberships during the rest of 2022.
In 2021, Basic-Fit came to an agreement with its syndicate banks for an amendment of its covenant testing. As a result, the leverage ratio and interest cover ratio at 30 June 2022 were calculated based on adjusted EBITDA and interest as reported in the fourth quarter of 2021, multiplied by two plus adjusted EBITDA and interest as reported in the first six months of 2022. As of 31 December 2022, ratios are calculated based on the original terms in the facility agreement.
Together with the liquidity injections made in 2020 and 2021, which strengthened Basic-Fit\u2019s financial position, this helped Basic-Fit with the execution of its accelerated growth strategy. Basic-Fit believes it has shown that it has the ability to respond to adversity in a pragmatic way, still managing to open 185 clubs in 2022 and increasing memberships to 3.35 million.
In 2022, the Management Board prepared several forecast scenarios to estimate the impact of COVID-19 and economic circumstances on liquidity and covenant ratios in 2022 and through to 2024. As at 31 December 2022, the Group complied with its covenant ratios and, according to the aforementioned scenarios, the Management Board expects to comply with the covenant ratios in 2023 and 2024. The leverage ratio as at 31 December 2022 was 2.9 and the interest cover ratio was 11.7.
In preparing these Financial Statements, the Management Board considered the potential impact of climate change. Many of the effects arising from climate change will be longer term in nature, with an inherent level of uncertainty. In the long-term, Basic-Fit will replace all natural gas heating systems with more efficient electric systems in those clubs that are not yet natural gas free and Basic-Fit will install solar panels on its headquarters and clubs when possible. The impact for these financial statements is considered limited.
Based on the available liquidity on the date of publication of these financial statements, the Management Board expects to have suffficient liquidity in all scenarios and that Basic-Fit will meet its liabilities as they fall due in the next twelve months after the publication of these financial statements. Therefore, the Management Board continues to prepare these financial statements on a going concern basis and concludes that the situation does not involve material uncertainties that may cast significant doubt about the Group's ability to continue as a going concern.
The war in Ukraine has impacted economies on a global scale. The effects are wide ranging, including amongst others, rising inflation, the energy crisis in Europe, pressure on supply chains and increased interest rates in most parts of the world. Basic-Fit has considered to what extent rising energy bills, supply chain constraints, economic sanctions on Russia and significant inflation impacts business operations. Based on this, the group has concluded that the impact on the performance of the business is not material for the 2022 financial period. Utility unit costs remained nearly flat in 2022 thanks to fixed price contracts and there were no significant supply chain constraints. Furthermore, Basic-Fit did not notice a negative impact on revenues.
In direct response to the rising inflation (including energy prices), Basic-Fit introduced an energy taskforce, to reduce energy consumption in the coming years and the continuous focus on cost and capex control has been further intensified. Basic-Fit has fixed prices for 75% of the expected energy consumption in 2023. The goal is to reduce the energy consumption per club on average by 20% in the course of 2023 compared to the average energy consumption in 2022.
Basic-Fit managed to keep the average initial capex for new clubs in 2022 below \u20ac1.2 million and average maintenance capex at \u20ac55 thousand per club, which is in line with the amounts in previous years.
The increasing interest costs were partly compensated by interest rate swaps as disclosed in note 6.4 Financial risk management, note 6.5 Financial instruments and note 6.7 Finance income and costs.
The Company also assessed the implications of rising interest rates on the valuation of assets and liabilities (including goodwill). This assessment resulted in an increase in the discount rate used in the goodwill impairment testing as disclosed in note 4.1 Goodwill and an increase in the incemental borrowing rate as used to measure lease liabilities as disclosed in note 4.4 Right-of-use assets and lease liabilities. Due to the unpredictable nature of this risk, Basic-Fit actively monitors the economic developments.
The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and with Part 9 of Book 2 of the Dutch Civil Code. The consolidated financial statements have been prepared on the historical cost basis, except for the financial assets and liabilities (including derivative instruments), which are measured at fair value.
The consolidated financial statements are presented in euros and all values are rounded to the nearest thousand (\u20ac\u00a0x 1,000), except when otherwise indicated.
The preparation of consolidated financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group\u2019s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed below under \u2018Significant accounting judgements, estimates and assumptions\u2019.
The consolidated financial statements provide comparative information in respect of the previous period. In addition, the Group presents an additional statement of financial position at the beginning of the preceding period when there is a retrospective application of an accounting policy, a retrospective restatement, or a reclassification of items in financial statements. This situation is not applicable to these financial statements.
The preparation of the Group\u2019s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities (and the accompanying disclosures), and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
In the process of applying the Group\u2019s accounting policies, management has made various judgements. Those judgements that management has assessed to have the most significant impact on the amounts recognised in the consolidated financial statements are discussed in the individual notes to the related financial statement line items or below.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are also described in the individual notes to the related financial statement line items below. The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. However, existing circumstances and assumptions about future developments may change due to market changes or circumstances that are beyond the Group's control. Such changes are reflected in the assumptions when they occur.
The table below presents the areas that involve a higher degree of judgement or areas where assumptions and estimates are significant to the financial statements:
| \u00a0 | Note |
|---|---|
| Revenue recognition | 3.2 |
| Deferred tax assets | 3.9 |
| Impairment testing of goodwill | 4.1 |
| Impairment testing of non-current assets | 4.2 |
| Useful lives | 4.2 |
| Determining the lease term of contracts with renewal and termination options | 4.4 |
| Leases - estimating the incremental borrowing rate | 4.4 |
| Provision for expected credit losses | 5.2/6.5 |
In the process of applying the Group\u2019s accounting policies, management made the following judgements that have a significant impact on the amounts recognised in the consolidated financial statements (apart from those involving estimations, which are described above):
Recognition of provisions
The Group is subject to a number of factors that could lead to an outflow of economic benefits. When assessing whether such factors require either provision or disclosure, management is required to consider, among other factors, whether a legal or constructive obligation exists at the reporting date and whether the resulting risk of an outflow of economic benefits is probable (requiring a provision), less than probable but more than remote (requiring disclosure), or remote (requiring neither provision nor disclosure).
Decommissioning liabilities
For certain fitness club locations, the Group has a contractual obligation to restore locations to an agreed upon state. The Group has not recorded a decommissioning liability for such obligations. Management judges that, based on historical experience, the likelihood that the Group will be required to restore a location to its original state is remote. Fitness club locations are often renovated to a better state than their original state and, moreover, the duration of a lease contract is usually longer than 10 years. Consequently, lessors have made very few requests for the restoration of locations over the years when leases have been terminated. The Group has therefore not recognised any decommissioning liabilities.
The general accounting policies applied to the consolidated financial statements as a whole are described below, while other significant accounting policies related to specific items are described in the relevant notes. The description of accounting policies in the notes forms an integral part of the description of the accounting policies in this section. Unless otherwise stated, these policies have been consistently applied to all the years presented.
The consolidated financial statements incorporate the financial statements of the Company and entities controlled either directly, or indirectly, by the Company.
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated, unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been aligned with the Group\u2019s accounting policies where necessary to ensure consistency with the policies adopted by the Group.
The Group presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when it is:
Expected to be realised or intended to be sold or consumed in the normal operating cycle
Held primarily for the purpose of trading
Expected to be realised within twelve months after the reporting period
Or
Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
It is expected to be settled in the normal operating cycle
It is held primarily for the purpose of trading
It is due to be settled within twelve months after the reporting period
Or
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The Group\u2019s consolidated financial statements are presented in euros, which is also the parent company\u2019s functional currency. For each entity, the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency. Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. The Group rarely has transactions in foreign currencies, and gains and losses resulting from the settlement of such transactions are generally recognised in profit or loss.
The statement of cash flows has been prepared using the indirect method, whereby profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing cash flows. Interest paid is classified as financing cash flows, while interest received is classified as investing cash flows. Dividends (if applicable) are classified as financing cash flows.
The Group applied for the first time certain standards and amendments that are effective for annual periods beginning on or after 1 January 2022. Several amendments and interpretations applied for the first time in 2022, but did not have an impact on the financial statements of the Group.
The Group has not opted for the early adoption of any other standard, interpretation or amendment that has been issued but is not yet effective.
Certain new accounting standards and interpretations have been issued but are not yet effective for the year ended 31 December 2022. These standards and interpretations are not expected to have a material impact on the entity in the current or future reporting periods, or on foreseeable future transactions.
This section presents the disclosure of operating segments and the notes related to items in the statement of profit or loss (except for finance income and costs). If applicable, relevant notes on balance sheet items, which also relate to items in the statement of profit or loss, are also presented in this section. A detailed description of the results for the year is provided in the business and financial review section in the Management Board report.
The chief operating decision-maker ('CODM'), who is responsible for allocating resources and assessing the performance of the operating segments, has been identified as the Company\u2019s CEO, CFO, COO and CCO (\u2018Leadership team\u2019). The CODM examines the Group\u2019s performance from a geographical perspective and has identified six operating segments: the Netherlands, Belgium, Luxembourg, France, Spain and Germany.
The business activity of all of these operating segments is the operation of value-for-money fitness clubs under the same Basic-Fit label. The formula for the operation of these clubs is the same in all countries: memberships and membership fees are similar, and the cost structure is similar. Furthermore, all operating segments and their business activities are located in EU-member countries. The political and economic environment of these countries is similar, and the euro is used in all countries. Moreover, the Benelux countries (Belgium, the Netherlands and Luxembourg) generated similar profit margins (underlying EBITDA) pre-COVID-19, as did France and Spain. However, the profit margins in the Benelux were not (yet) comparable to those in France and Spain, which are the countries where the fastest growth has been realised in past years and is also expected for the coming years. Profit margins in the period 2020 and 2021 were heavily impacted by temporary club closures as a result of COVID-19 and 2022 was still a recovery year due to the time it took to recover from the loss in memberships during the pandemic. As a result, these years are less comparable.
For Basic-Fit, Germany is a new operating segment with only a few club openings in the fourth quarter of 2022. As a result, profit margins were negative in 2022 but fast growth in clubs and of profit margins is expected in the coming years.
Given similar economic characteristics and ignoring the impact of temporary club closures on profit margins in the period 2020 to 2022, as well as the fact that the nature of the services, the types of members, the methods for distribution and the regulatory environments are similar, the operating segments Belgium, the Netherlands and Luxembourg have been aggregated into one reportable segment (Benelux), and the operating segments France, Spain and Germany have also been aggregated into one reportable segment (France, Spain & Germany). In preparing the segment disclosures, management is required to use judgement in applying the aggregation criteria as set out in IFRS 8.22/BC30A.
The Basic-Fit CODM primarily uses underlying EBITDA as an alternative performance measure to monitor operating segment results and performance. Total revenues and underlying EBITDA per reporting segment are as follows:
| For the year ended 31 December 2022 | Benelux | France, Spain & Germany | Total |
|---|---|---|---|
| Revenues | 364,489 | 430,082 | 794,571 |
| Underlying EBITDA segments | 151,688 | 95,697 | 247,385 |
| Other reconciling items | \u00a0 | \u00a0 | (43,605) |
| Total underlying EBITDA | \u00a0 | \u00a0 | 203,780 |
| Reconciliation of underlying EBITDA to profit/(loss) before tax: | \u00a0 | \u00a0 | \u00a0 |
| Underlying EBITDA | \u00a0 | \u00a0 | 203,780 |
| Depreciation, amortisation and impairment charges | \u00a0 | \u00a0 | (331,389) |
| Finance costs \u2013 net | \u00a0 | \u00a0 | (58,633) |
| Invoiced rent | \u00a0 | \u00a0 | 193,642 |
| COVID-19 rent credits | \u00a0 | \u00a0 | 2,415 |
| Exceptional items: | \u00a0 | \u00a0 | \u00a0 |
| - COVID-19 related costs | \u00a0 | \u00a0 | (8,438) |
| - Other exceptional costs and profits | \u00a0 | \u00a0 | (4,518) |
| Profit/(loss) before tax | \u00a0 | \u00a0 | (3,141) |
| For the year ended 31 December 2021 | Benelux | France & Spain | Total |
|---|---|---|---|
| Revenues | 169,009 | 171,737 | 340,746 |
| Underlying EBITDA segments | 49,638 | 10,752 | 60,390 |
| Other reconciling items | \u00a0 | \u00a0 | (28,760) |
| Total underlying EBITDA | \u00a0 | \u00a0 | 31,630 |
| Reconciliation of underlying EBITDA to profit/(loss) before tax: | \u00a0 | \u00a0 | \u00a0 |
| Underlying EBITDA | \u00a0 | \u00a0 | 31,630 |
| Depreciation, amortisation and impairment charges | \u00a0 | \u00a0 | (283,881) |
| Finance costs \u2013 net | \u00a0 | \u00a0 | (56,755) |
| Invoiced rent | \u00a0 | \u00a0 | 167,375 |
| COVID-19 rent credits | \u00a0 | \u00a0 | 23,143 |
| Exceptional items: | \u00a0 | \u00a0 | \u00a0 |
| - COVID-19 related costs | \u00a0 | \u00a0 | (79,554) |
| - Other exceptional costs and profits | \u00a0 | \u00a0 | (3,310) |
| Profit/(loss) before tax | \u00a0 | \u00a0 | (201,352) |
Other reconciling items represent corporate costs that are not allocated to the operating segments. These corporate costs mainly consist of personnel costs and IT costs.
COVID-19 related exceptional costs include personnel costs, club rent and related housing expenses and other costs, to the extent that Basic-Fit did not receive government compensation related to the time that clubs were closed. Other exceptional costs and profits include start-up costs for the segment Germany, costs related to club closures and other costs that can be considered as exceptional based on the facilities agreement1 with the banks.
The Group operates in six countries. Note 3.2 Revenue contains a breakdown of the revenues of these countries, as well as those of the Netherlands, the Group\u2019s country of domicile. Furthermore, there are no customers that account for 10% or more of revenue in any year presented.
A breakdown of the non-current assets is as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| The Netherlands (country of domicile) | 620,619 | 560,277 |
| Belgium | 426,417 | 402,022 |
| Luxembourg | 37,746 | 36,299 |
| France | 1,300,976 | 1,167,343 |
| Spain | 218,304 | 124,581 |
| Germany | 15,276 | - |
| Total | 2,619,338 | 2,290,522 |
Non-current assets for this purpose consist of property, plant and equipment, right-of-use assets, goodwill and other intangible assets. The additions to non-current assets (the Benelux segment \u20ac145 million, the France, Spain & Germany segment \u20ac403 million) are directly related to the investments in new club openings in 2022.
In the first months of 2022, Basic-Fit was still confronted with COVID-19 related government measures in all countries, including two weeks of lockdown in the Netherlands in early January 2022. In April 2022, the last government restrictions were lifted and members were once again free to enter all clubs without limitations. At that point, the Group reverted to regular 'pre-COVID' revenue accounting.
COVID-19 had a significant impact on revenue recognition since 2020. Memberships were frozen for several months in 2020 and 2021 during the forced club closures. This freeze meant that memberships were put on hold and members were not direct debited. After the freeze period, members were direct debited again. For periods that membership dues were received but the clubs were closed, Basic-Fit offered several compensation options. These options included an upgrade to a Premium membership, a free sportswater add-on, the return of fees paid as a discount over six payment periods, a goodie bag and no payback of membership fees.
Basic-Fit only recognised revenues during the aforementioned freeze periods for the access that members have to the online Basic-Fit platform via the app. Therefore, Basic-Fit determined a standalone selling price of the app. Such revenue was only recognised for members who have to make future payments. Hence, revenue was only recognised during the freeze period for members who were inside the non-cancellable membership period.
With regard to the members who failed to inform Basic-Fit before 31 December 2020 regarding the compensation option they preferred, Basic-Fit did not know whether they had to offer one of the compensation options. Recognising revenue in 2020 for these members could have resulted in a reversal of cumulative revenue in 2021 at the moment it became clear which option these members preferred. Given the uncertainty, Basic-Fit decided not to recognise revenue in the financial statements for the year ended 31 December 2020 for these members with respect to the compensation options. Once these members chose a compensation option in 2021, revenues have been recognised in line with the accounting policy as described in this note. For members who ultimately did not choose any compensation option, revenue not taken into account in 2020 was recognised in 2021. This situation was not applicable at the end of 2021 nor 2022 as no similar compensation options were offered in these years.
In the following table, revenue is disaggregated by revenue type, by country and based on the timing of revenue recognition:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Type of goods or service | \u00a0 | \u00a0 |
| Fitness membership revenue | 764,398 | 330,642 |
| Other club revenue | 24,264 | 7,577 |
| Other non-club revenue | 5,909 | 2,527 |
| Total | 794,571 | 340,746 |
| \u00a0 | \u00a0 | \u00a0 |
| Geographical markets | \u00a0 | \u00a0 |
| The Netherlands | 191,012 | 87,447 |
| Belgium | 160,838 | 74,300 |
| Luxembourg | 12,639 | 7,262 |
| France | 394,533 | 150,497 |
| Spain | 34,912 | 21,240 |
| Germany | 637 | - |
| Total | 794,571 | 340,746 |
| \u00a0 | \u00a0 | \u00a0 |
| Timing of revenue recognition | \u00a0 | \u00a0 |
| Products and services recognised over time | 722,448 | 313,064 |
| Products recognised at a point in time | 72,123 | 27,682 |
| Total | 794,571 | 340,746 |
The increase in revenues is directly related to the fact that during 2021, Basic-Fit faced several measures by local governments in all countries, such as temporary club closures. During these club closures, Basic-Fit only recognised revenues for the access that members had to the online Basic-Fit platform via the app. Furthermore the increase in revenues is directly related to opening of new clubs (Basic-Fit added 185 clubs to its network), more members per club and on average more revenue per member. Revenues from the 'All-in' membership' that was gradually introduced in the second half of 2022, were not material in 2022.
Other club revenue includes revenue from personal trainer services, day passes, promotional revenue and rental income from physiotherapists and other third parties. Furthermore this includes other club related revenues, such as revenue from sales via vending machines. The increase in other club revenues is directly related to temporary club closures in 2021, the increase in clubs and members in 2022 as well as an increase in promotional revenue.
Other non-club revenue relates to revenue from sales via the online store.
Basic-Fit receives considerations before revenues are recognised (e.g. collected membership fees for future periods), but also recognises revenues before considerations are received (e.g. access to the clubs during a 'free' period). A combination of timing differences between receipts and revenue recognition per member is possible. In the event that the revenues recognised exceed the received considerations, this is recognised as part of receivables. In the event that the received considerations exceed the revenues recognised, this is recognised as deferred revenues.
The following table provides information about receivables and deferred revenues from contracts with customers:
| \u00a0 | 31 December 2022 | 31 December 2021 | 1 January 2021 |
|---|---|---|---|
| Receivables, included in 'Trade and other receivables' | 35,646 | 9,417 | 16,022 |
| Deferred revenues, included in 'Trade and other payables' | 17,435 | 18,688 | 46,570 |
The receivables relate to amounts due from customers for services performed in the past period(s), less any provision for impairment. Furthermore, receivables include amounts related to timing differences for situations where the revenues recognised exceed the received considerations. The increase in receivables is the result of the strong increase in members in 2022, resulting in more member receivables (unpaid membership fees) and more situations in which revenues recognised exceed the received considerations.
The contract liabilities relate to the advance consideration received from customers, for which revenue is recognised over time in situations that the received considerations exceeds the revenues recognised. The decline in deferred revenues in 2022 resulted from a decreasing number of situations in which the received considerations exceeded the revenues recognised.
All remaining performance obligations are expected to be recognised within one year.
The Group\u2019s principal sources of revenue are membership services, principally fitness club memberships, including joining fees and add-ons for drinks and/or live group lessons. In addition, in the Basic-Fit clubs, additional services are provided by external parties (e.g. personal trainers, physiotherapists), who pay a monthly fee to obtain access to the club and the members, and these are accounted for under other revenues.
Other club revenues also include revenues related to the sale of day passes and revenues related to the sale of nutritional products and drinks within the club by a third party. Under this full-service vending construction, the Group receives a percentage of the revenue generated by the vending machines. These amounts are shown as revenues for the Group in its statement of profit or loss. Revenues are measured at the fair value of the consideration received or receivable and represent amounts receivable for goods supplied and services rendered, stated net of discounts, returns and value added taxes. The Group recognises revenues when the amount of revenues can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met for each of the Group\u2019s activities, as described below.
The Group provides fitness club services for its members. For sales of services, revenue is recognised in the accounting period in which the services are rendered (over the contract term). Delivery of fitness club services extends throughout the term of membership. Joining fees are recognised over the contract period for one-year contracts and over the expected duration of the membership (\u2018average length of stay\u2019) for \u2018Flex contracts\u2019 (contracts that can be cancelled every month).
Membership fees collected but not earned are included in deferred revenue. The Group's promotional offers often include a discount granting a free period (e.g. current month free or next month free), waiving of the joining fee (fully or partially), granting a promotional item or discount voucher for the online store, or a combination of these. The member's payment will be based on the applicable promotion, but the monthly revenue is determined for the entire contract period by taking into consideration the discounts granted that are allocated using relative amounts.
In addition to the performance obligations as described above (access to fitness clubs, joining fees, promotional items/vouchers and add-ons), there are multiple other performance obligations such as access to the Basic-Fit app, use of massage chairs and discounts on the add-on for drinks. These performance obligations have the same revenue recognition pattern as the access to the fitness club, together considered as providing fitness club services for members. In addition, Basic-Fit may recognise revenue related to access to the Basic-Fit app during a freeze period before membership fees are collected. A combination per member of timing differences between receipt and revenue recognition is possible. The deferred revenues represent the net effect of these timing differences.
All compensation options offered to members (with continued access to Basic-Fit\u2019s online platform) are considered a contract modification in the light of IFRS 15. The modification is treated as a termination of the existing contract and the creation of a new contract. As a result, revenue recognised to date on the original contracts is not adjusted. Instead, the remaining portion of the original contracts and the modification are accounted for, together, on a prospective basis by allocating the remaining considerations to the remaining performance obligations, including those added in the modification.
Up until August 2022, Basic-Fit sold 'Comfort' and 'Premium' contracts1 to its members. The main difference between a \u2018Comfort\u2019 and a \u2018Premium\u2019 contract is that with a \u2018Premium\u2019 contract, members can share their membership card with a family member and members can always train with a friend. As of August 2022, the 'Comfort' contract was replaced by a 'Basic' contract. With a 'Basic' contract, a member can only workout in one club, while with a 'Premium' contract, members have access to all clubs in all countries. Furthermore in the last months of 2022, Basic-Fit introduced an 'All-in' membership option. This membership is a combination of a 'Premium' one-year membership and the two or three-year rental of a bike. Since August 2022, live group lessons are included in the Basic and Premium contracts and this is no longer sold as an add-on to new members.
Members with an existing 'Comfort' contract (until August 2022) can continue to make use of the privileges of that contract until they cancel their contract, downgrade their contract to 'Basic' or upgrade their contract to 'Premium'.
Members have the option to upgrade or downgrade their contract. This is not possible for members who have chosen the \u2018Flex\u2019 option. In the event that a member opts to upgrade or downgrade their contract, the original contract is ended at the date of modification and the member enters into a new membership with a duration of one year (three years for the bike rent in the case of the 'All-in' contract). An upgrade or downgrade should be recognised as a contract modification. In the event of an upgrade, the new services are accounted for as a separate contract. Any remaining discount on the original contract continues to be spread over the original contract term. In the event of a downgrade, revenue recognised to date on the original contract is not adjusted. Instead, the remaining portion of the original contracts and the modification are accounted for, together, on a prospective basis by allocating the remaining considerations to the remaining performance obligations, including those added in the modification. As a result, the (remaining) discount on the original contract is spread over the contract term of the new modified contract.
The Group sells nutritional and other fitness-related products in its fitness clubs via vending machines, as well as via its online store. Sales of these products are recognised when the products are sold to the customer.
Significant revenue recognition estimates relate to the identification of performance obligations and the revenue allocation as a result of the performance obligations identified. Furthermore, these estimates relate to the value that is allocated to the use of the online platform for the period that memberships were frozen (and not charged) and the accounting treatment of those members who had not explicitly chosen a compensation option.\u00a0
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Cost of food and drink | (8,658) | (4,848) |
| Other cost of sales | (13,740) | (9,054) |
| Total | (22,398) | (13,902) |
'Cost of food and drink' includes \u20ac30 thousand (2021: \u20ac873 thousand) related to stocks whose expiration date has passed. 'Other cost of sales' consists primarily of sports apparel and other goods that are sold to members and/or via the online store.\u00a0
The increase in costs of consumables used is directly related to the increase in revenues as disclosed in note 3.2 Revenue.
Cost of consumables used are accounted for in the year incurred.
Employee benefits expense can be broken down as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Salaries and wages (including share-based payments)1 | (120,998) | (64,804) |
| Social security contributions | (24,527) | (15,112) |
| Pension costs \u2013 defined contribution plans | (2,254) | (1,590) |
| Total | (147,779) | (81,506) |
Salaries and wages include \u20ac29 thousand government grants (2021: \u20ac30.3 million) and social security contributions include \u20ac774 thousand government grants (2021: \u20ac877 thousand) as further disclosed in note 3.10 Government grants.
The increase in employee benefits expense is directly related to the increasing number of clubs and the decrease in government grants.
In the year under review, the average number of employees calculated on a full-time equivalent ('FTE')basis was 4,145 (2021: 3,373).
| Average number FTE during the year | 2022 | 2021 |
|---|---|---|
| Benelux | 1,867 | 1,697 |
| France, Spain & Germany | 2,278 | 1,676 |
| Total | 4,145 | 3,373 |
| \u00a0 | \u00a0 | \u00a0 |
| Club | 3,539 | 2,849 |
| Headquarters | 606 | 524 |
| Total | 4,145 | 3,373 |
Salaries, wages and social security contributions are charged to statement of profit or loss based on the terms of employment, where they are due to employees and the tax authorities respectively.
The Group operates a number of defined contribution pension plans. A defined contribution plan is a pension plan under which the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as an employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
The Company has equity-settled share-based payment plans for members of the Management Board and certain employees as part of their remuneration. Performance shares are awarded on an annual basis under the long-term incentive plan (LTIP) and will vest three years after the award date, subject to continued employment and based on achievement of a target revenue growth per annum and a target debt / EBITDA ratio over the three-year performance period. Linear vesting applies between threshold (50%), target (100%) and maximum (150%) vesting levels.
Due to the NOW regulations and other government support measures during the COVID-19 period, no bonus can and will be paid over the years 2020 and 2021. The Supervisory Board and Management Board have exercised their discretionary competence and decided in 2022 that the LTIP 2018 (covering the year 2020) would vest on a pro rata basis, but that the overperformance for the years 2018 and 2019 would be ignored. As a result, LTIP 2018, which originally should have vested in June 2021, now vested in June 2022 based on 66.67% 'at target' performance basis, not considering threshold performance or overperformance.
LTIP 2019, which originally should have vested in May 2022, did not vest as targets were not met and the Supervisory Board and Management Board did not exercise their discretionary competence. As a result, the granted shares were forfeited in the reporting period.
When a particular participant\u2019s employment is terminated, unvested awards will be forfeited. The unvested awards do not entitle the participant to any share ownership rights, such as the right to receive dividends and voting rights.
Ordinary shares released to the members of the Management Board after vesting of awards are subject to a mandatory holding period of five years from the award date, provided that a sufficient number of such ordinary shares can be sold to cover any taxes due upon vesting.
Details of the number of share awards outstanding are as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 262,576 | 228,072 |
| Awarded during the year | 54,966 | 35,857 |
| Performance adjustment | (20,087) | - |
| Exercised during the year | (40,191) | - |
| Forfeited during the year | (56,145) | (1,353) |
| At 31 December | 201,119 | 262,576 |
The fair value of the performance shares awarded in 2022 has been determined with reference to the share price of the Company\u2019s ordinary shares at the date of granting. Since dividends are not expected during the vesting period, the weighted average fair value of the performance shares awarded in 2022 is equal to the share price at the date of granting of \u20ac37.60 (2021: \u20ac38.20).
The share-based payment expenses recognised in 2022, with a corresponding entry directly in equity, amount to \u20ac28 thousand (2021: \u20ac347 thousand). Exercised share-based payments amounted to \u20ac1,085 thousand (2021: nil).
The Company settles the share-based payment plans on a net basis by with\u00adholding the number of shares with a fair value equal to the monetary value of the employee\u2019s tax obligation and only issues the remaining shares on completion of the vesting period. The Group expects to withhold an amount of \u20ac1.1 million (2021: \u20ac2.8 million) and pay this to the relevant tax authorities with respect to the vesting of outstanding share-based payment awards, with nil (2021: \u20ac1.2 million) of this within one year.
The Group has a number of equity-settled share-based payment plans, under which the Management Board members and selected eligible em\u00adploy\u00adees perform services in exchange for equity instruments of the Company.
The total amount to be expensed for services performed is determined by reference to the grant date fair value of the share-based payment awards made, including the impact of any non-vesting conditions and market conditions. The fair value determined at the grant date is expensed on a straight-line basis over the three-year vesting period, based on the Group's estimate of the number of awards that will eventually vest, with a cor\u00adre\u00adspond\u00ading credit to equity.
If applicable, the difference between the amount based on the estimated number of shares awarded and the amount based on the actual number of shares awarded that vest is recognised in the consolidated statement of profit or loss in the financial year in which the shares awarded vest.
Service conditions and non-market performance conditions are taken into account in the number of awards expected to vest. At each reporting date, the Group revises its estimates of the number of awards that are expected to vest. The impact of the revision of vesting estimates, if any, is recog\u00adnised in the consolidated statement of profit or loss for the period.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Depreciation of property, plant and equipment | (151,134) | (125,186) |
| Depreciation of right-of-use assets | (171,566) | (147,737) |
| Amortisation of other intangible assets | (8,689) | (10,846) |
| Impairment of property, plant and equipment | - | (112) |
| Total | (331,389) | (283,881) |
The increase in depreciation charges is directly related to the increasing number of clubs.
Reference is made to note 4.2 Other intangible assets, note 4.3 Property, plant and equipment and note 4.4 Right-of-use assets and lease liabilities.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Net gain on disposal of property, plant and equipment and right-of-use assets | 2,941 | 700 |
| Insurance reimbursements | 680 | 105 |
| Government grants1 | 330 | 35,502 |
| Other operating income | 300 | 1,191 |
| Total | 4,251 | 37,498 |
The gain on disposal of property, plant and equipment mainly relates to the disposal of fitness equipment.
Operating income that cannot be allocated to revenues as described in note 3.2 Revenue is recognised as other operating income.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Other personnel expenses | (21,849) | (12,409) |
| Housing expenses | (122,176) | (86,755) |
| Net marketing expenses | (47,162) | (16,982) |
| Write-off of bad debts, incl. collection agency costs | (13,827) | (19,742) |
| Short-term and low-value lease expenses and other lease adjustments1 | (1,649) | (1,079) |
| Other car expenses | (1,596) | (992) |
| Overhead and administrative expenses | (35,920) | (28,736) |
| Total | (244,179) | (166,695) |
The increase in other operating expenses is directly related to the increasing number of clubs.
Expenses arising from the Group\u2019s business operations are accounted for in the year incurred. Marketing expenses arising from the Group\u2019s business operations are accounted for in the year incurred. The Group receives marketing contributions from its main suppliers of fitness equipment based on separate marketing contribution agreements that are unrelated to the purchase of fitness equipment from these suppliers, and therefore qualify as distinct services. The amount of the contribution is determined between the Group and the relevant suppliers by evaluating the joint marketing efforts. The Group recognises these contributions as a reduction against the marketing expenses in the statement of profit or loss, as these are reimbursements for joint marketing costs incurred by the Group.
The major components of income tax expense for the years 2022 and 2021 are as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Current income tax: | \u00a0 | \u00a0 |
| Current income tax charge | (2,900) | (963) |
| \u00a0 | (2,900) | (963) |
| Deferred income tax: | \u00a0 | \u00a0 |
| Change in deferred tax asset for carry-forward losses available for offsetting against future taxable income | 158 | 51,022 |
| Changes in other deferred tax assets and liabilities recognised in profit or loss | 2,196 | 1,245 |
| \u00a0 | 2,354 | 52,267 |
| Total income tax | (546) | 51,304 |
In 2022, all aggregate current and deferred taxes arising in the reporting period have been recognised in the consolidated statement of profit or loss.
In 2021, an amount of \u20ac16.2 million in deferred taxes relating to the issue of convertible bonds has been directly debited to equity and an amount of \u20ac1.0 million in deferred taxes relating to incremental costs directly attributable to the newly issued shares has been directly credited to equity. All other current and deferred taxes arising in the reporting period have been recognised in the consolidated statement of profit or loss.
The effective income tax amount on the Group\u2019s profit before tax differs from the statutory income tax amount that would arise using the applicable statutory income tax rate. This difference is reconciled below.
| \u00a0 | 2022 | % | 2021 | % |
|---|---|---|---|---|
| Profit (loss) before income tax | (3,141) | \u00a0 | (201,352) | \u00a0 |
| Income tax based on Basic-Fit\u2019s domestic rate | 810 | 25.8% | 50,338 | 25.0% |
| Effects of tax rates in foreign jurisdictions | 210 | 6.7% | 818 | 0.4% |
| Adjustments in respect of prior years\u2019 current and deferred taxes | 81 | 2.6% | (30) | 0.0% |
| Remeasurement of deferred tax assets and liabilities | 11 | 0.4% | (935) | (0.5)% |
| Impact CVAE tax France | (1,712) | (54.5)% | (684) | (0.3)% |
| Recognition of previously unrecognised deferred tax assets and liabilities | 357 | 11.4% | - | 0.0% |
| Future tax rate adjustments | - | 0.0% | 1,483 | 0.7% |
| Impact of tax incentives | 98 | 3.1% | 137 | 0.1% |
| Impact of non-taxable government grants | - | 0.0% | 409 | 0.2% |
| Non-deductible expenses for tax purposes: | \u00a0 | 0.0% | \u00a0 | 0.0% |
| Share-based payments | (7) | (0.2)% | (87) | 0.0% |
| Other non-deductible expenses | (394) | (12.5)% | (145) | (0.1)% |
| At the effective income tax rate | (546) | (17.4)% | 51,304 | 25.5% |
Income tax based on Basic-Fit\u2019s domestic rate
The income tax based on Basic-Fit\u2019s domestic rate is based on the Dutch statutory income tax rate of 25.8% (2021: 25.0%). This reflects the income tax that would have been applicable assuming that all its result were to be taxable at the Dutch statutory tax rate and there were no permanent differences between taxable base and financial results and no Dutch tax incentives were applied.
Effects of tax rates in foreign jurisdictions
This reflects that a portion of Basic-Fit\u2019s result is realised in countries other than the Netherlands where different tax rates are applicable.
Adjustments in respect of prior years\u2019 current and deferred taxes
The movements in the adjustments in respect of prior years\u2019 current and deferred taxes for the years 2021 and 2022 relate to differences between the estimated income taxes and final corporate income tax returns.
Remeasurement of deferred tax assets and liabilities
These remeasurement of deferred tax assets and liabilities relates to adjustments in deferred tax assets and liabilities calculated at future tax rates, while the effective tax rate is calculated at the current tax rate (in 2021) and other minor remeasurements (in 2021 and 2022).
Impact CVAE tax France
CVAE ('Cotisation sur la Valeur Ajout\u00e9e des Entreprises') is a corporate value-added contribution in France that meets, based on the Group\u2019s analysis, the definition of an income tax as established under IAS 12. The current income tax charge includes an amount of \u20ac2,262 thousand (2021: \u20ac931 thousand) related to the CVAE tax in France. As the CVAE tax is deductible for French corporate income tax calculation, the net impact as reflected in the effective tax reconciliation is \u20ac1,712 thousand (2021: \u20ac684 thousand)
Recognition of previously unrecognised deferred tax assets and liabilities
Basic-Fit succesfully reached an agreement with the French tax authorities related to \u20ac1.4 million in carry-forward losses as part of an acquisition in 2019. As a result of this agreement, these losses can be used to offset against future taxable profits.
Future tax rate adjustments
As a result of tax reforms in the Netherlands, Basic-Fit remeasured deferred tax assets and liabilities in 2021. Tax reform plans are taken into account as soon as the plans are substantively enacted. In December 2021, the Dutch government increased the tax rate from 25.0 % to 25.8% as of 2022.\u00a0
Impact of tax incentives
Adjustments in respect of tax incentives mainly relate to (energy) investment allowances in the Netherlands and Luxembourg. Furthermore, this item includes the stepped tax that is applicable in some countries where a certain threshold is taxable at a lower tax rate than the remaining result.
Impact of non-taxable government grants
Adjustments in respect of non-taxable government grants relates to government grants received in the Netherlands and France that are excluded from taxable income.
Non-deductible expenses for tax purposes
Non-deductible expenses for tax purposes reflects the impact of permanent non-tax-deductible items such as share-based payment expenses and other non-deductible or partly deductible expenses, such as meals and entertainment expenses.
A breakdown of current income tax receivable and current income tax payable per country is as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Belgium | 12 | - |
| Luxembourg | 116 | 112 |
| France1 | - | 75 |
| Total Income tax receivable | 128 | 187 |
| \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | 2022 | 2021 |
| Belgium | 40 | 19 |
| France1 | 1,822 | - |
| Spain | - | 3 |
| Total Income tax payable | 1,862 | 22 |
Deferred taxes relate to the following:
| \u00a0 | Consolidated statement of financial position at 31 December | Consolidated statement of comprehensive income | ||
|---|---|---|---|---|
| \u00a0 | 2022 | 2021 | 2022 | 2021 |
| Losses available for offsetting against future taxable income | 94,090 | 93,932 | 158 | 51,022 |
| Tax incentives (investment allowance) | 779 | 717 | 62 | 71 |
| Purchase price allocation | (6,106) | (6,777) | 700 | 846 |
| Goodwill amortisation for tax purposes | (13,327) | (11,999) | (1,328) | (1,888) |
| Leases | 17,085 | 15,185 | 1,900 | 2,553 |
| Convertible bonds | (13,644) | (15,704) | 2,060 | 536 |
| Valuation of property, plant and equipment | 241 | 817 | (526) | (332) |
| Timing of expense recognition | 154 | (130) | 284 | (105) |
| Derivative financial instruments | (528) | 428 | (956) | (436) |
| Deferred tax benefit/(expense) | \u00a0 | \u00a0 | 2,354 | 52,267 |
| Net deferred tax assets/(liabilities) | 78,744 | 76,469 | \u00a0 | \u00a0 |
This is reflected in the statement of comprehensive income as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Statement of profit or loss | 2,354 | 52,267 |
| Statement of other comprehensive income | - | - |
| Total | 2,354 | 52,267 |
After netting deferred tax assets and deferred tax liabilities within the same tax entity for an amount of \u20ac34.7 million (2021: \u20ac35.3 million), these positions are as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Deferred tax assets | 78,744 | 76,469 |
| Deferred tax liabilities | - | - |
| Net deferred tax assets (liabilities) | 78,744 | 76,469 |
The following table presents the expected timing of the reversal of deferred tax assets and liabilities:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| To be recovered within 12 months | 7,786 | 1,681 |
| To be recovered after more than 12 months | 70,958 | 74,788 |
| Total | 78,744 | 76,469 |
The gross movement on the deferred income tax account is as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Opening balance as at 1 January | 76,469 | 39,396 |
| Income tax benefit during the period recognised in profit or loss | 2,354 | 52,267 |
| Deferred taxes acquired in business combinations | (79) | - |
| Deferred taxes recognised directly in equity | - | (15,194) |
| Closing balance as at 31 December | 78,744 | 76,469 |
As at 31 December 2022, Basic-Fit recognised \u20ac94.1 million (2021: \u20ac93.9 million) deferred tax assets for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies. In evaluating whether it is probable that sufficient taxable income will be generated to realise the benefit of these deferred income tax assets, the Group considered all available evidence, including forecasts, business plans and appropriate tax planning measures.
The Group took into account examples of positive evidence to support an assertion that it is probable that taxable profits will be available:
Losses occurred due to identifiable one-time/non-recurring events (COVID-19);
A strong earnings history exclusive of the loss that created the unused tax loss carried forward;
Convincing tax planning strategies;
The business generates sustainable profit margins which are sufficient to enable the Group to utilise existing tax losses carried forward and which can be utilised for that purpose (e.g. in the same tax jurisdiction).
Conversely, the following examples of negative evidence that may indicate that it is not probable that future taxable profits will be available are not applicable to Basic-Fit:
A recent history of operating losses for tax purposes;
The taxable entity is a start-up business;
History of significant variances of actual outcomes against business plans;
Losses of major customers and/or of significant contracts;
Uncertainty regarding the company's going concern status;
History of restructuring without returning to profitability or emerging from a bankruptcy;
The taxable entity expects losses in early future years;
The taxable entity has a history of unused tax losses and/or credits expiring; and
The losses relate to the core activity of the company and thus may reoccur in the future.
Deferred tax assets have been recognised for all loss carry-forwards of the tax jurisdictions HealthCity Belgi\u00eb N.V., Basic-Fit Belgium B.V., Basic-Fit Luxembourg S.A., Basic Fit II S.A., Basic-Fit Germany GmbH and the fiscal unity in the Netherlands consisting of Basic-Fit N.V., Basic Fit International B.V., Basic Fit Nederland\u00a0B.V. and BF Developments. Based on the budget for 2023 onwards for these jurisdictions, and with reference to the assumptions and significant judgements as described above, it is considered more likely than not that these entities will be able to offset the loss carry-forwards in the coming eight years, taking into account temporary differences. In assessing whether it is probable that sufficient future taxable profits will be available, it has been taken into account that the entities have a track record of taxable income in past years (before COVID-19). Furthermore, it is noted that most of the losses are due to an identifiable non-recurring event, namely the COVID-19 pandemic, or due to start-up losses related to Basic-Fit Germany GmbH.
Furthermore, deferred tax assets have been recognised for part of the loss carry-forwards of Basic-Fit Spain S.A. Most of the loss carry-forwards of Basic-Fit Spain S.A. were incurred in the period before the company started operating under the Basic-Fit brand (by the end of 2013, with 17 clubs). Based on the budget for 2023 onwards and with reference to the sections above, the Group expects to be able to offset at least part of the losses against taxable profits in the coming years. In assessing whether it is probable that sufficient future taxable profits will be available, it has been taken into account that Basic-Fit Spain S.A. has a track record of taxable income in past years (before COVID-19, but also in 2022). A deferred tax asset is recognised for the expected recovery of losses in the coming eight years. Basic-Fit will evaluate from year to year whether to recognise more of the currently unrecognised tax loss carry-forwards related to Basic-Fit Spain S.A., which will result in a higher deferred tax asset. Such recognition of a deferred tax asset will result in lower (deferred) income tax in the consolidated statement of profit or loss and therefore higher profit in the year of recognition.
In total, no deferred tax assets have been recognised for gross loss tax carry-forwards amounting to \u20ac43.2 million (2021: \u20ac43.2 million), mainly related to Basic-Fit Spain S.A. There are no restrictions on the expiration of these tax loss carry-forwards.
The income tax expense or credit for the period is the tax payable or receivable on the current period\u2019s taxable result, based on the applicable income tax rate for each jurisdiction adjusted for changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and amends tax assets and liabilities where appropriate.
Current tax assets and tax liabilities are offset when the entity has a legally enforceable right to offset and intends either to settle on a net basis or realise the asset and settle the liability simultaneously.
Deferred income tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Nor is the deferred income tax accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss and at the time of the transaction does not give rise to equal amounts of taxable and deductible temporary differences. Deferred income tax is determined using tax rates (and laws) that have been enacted, or substantially enacted, by the end of the reporting period, and are expected to apply when the related deferred income tax asset is realised,or the deferred income tax liability is settled.
Deferred tax assets are recognised for unused tax losses, deductible temporary tax differences, and tax credits to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the likely timing and level of future taxable profits, together with future tax planning strategies.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the Group is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities, and when the deferred income tax assets and liabilities relate to income taxes levied by the same tax authority on either the taxable entity or different taxable entities, where there is an intention to settle the balances on a net basis.
The Group is subject to income taxes in the Netherlands and a number of other jurisdictions. Judgement is required to determine current tax expenses, uncertain tax positions, deferred tax assets and deferred tax liabilities, plus the extent to which deferred tax assets can be recognised. Estimates are based on forecast future taxable income and tax planning strategies. The utilisation of deferred tax assets is dependent on future taxable profit in excess of the profit arising from the reversal of existing taxable temporary differences. The recognition of deferred tax assets is based on the assessment of whether it is more likely than not that sufficient taxable profit will be available in the future to utilise the reversal of temporary differences and tax losses. Recognition of deferred tax assets involves judgement regarding the future financial performance of the particular legal entity or tax group that has recognised the deferred tax asset.
Wage subsidy and other support programmes are accounted for in accordance with IAS 20 \u2018Accounting for Government Grants and Disclosure of Government Assistance\u2019. In 2022, Basic-Fit received \u20ac803 thousand (2021: \u20ac31.2 million, reducing employees benefits expense as disclosed in note 3.4 Employee benefits expense).
Other operating income includes \u20ac403 thousand (2021: \u20ac1.1 million) related to cost compensation programmes offered by the Dutch, Belgian, German and Spanish governments.
Furthermore, in 2022, Basic-Fit recognised a (negative) correction of \u20ac74 thousand related government grants as part of financial rescue packages offered by the French government in response to the outbreak of the COVID-19 pandemic (2021: \u20ac34.4 million recognised as \u2018Other operating income\u2019 in note 3.7 Other operating income).
Government grants are recognised when there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.
Government grants that are receivable as compensation for expenses or losses that have already been incurred, or for the purpose of giving immediate financial support to the Group with no related future costs, are recognised as other operating income in the period in which the grants become receivable.
This section discloses the Group\u2019s non-current assets, including leased assets and the related lease liabilities and investments made during the year, either through separate asset acquisitions or business combinations.
The movement in goodwill over the years was as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| As at 1 January | 203,604 | 203,604 |
| Acquired through business combinations1 | 1,239 | - |
| As at 31 December | 204,843 | 203,604 |
| \u00a0 | \u00a0 | \u00a0 |
| Accumulated impairment at 31 December | - | - |
Goodwill acquired through business combinations is allocated to and monitored on the level of the five cash-generating units (CGUs) as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| The Netherlands | 104,021 | 102,782 |
| Belgium | 83,425 | 83,425 |
| Luxembourg | 12,595 | 12,595 |
| France | 1,607 | 1,607 |
| Spain | 3,195 | 3,195 |
| Total | 204,843 | 203,604 |
Fair value less costs of disposal (FVLCD) for the year ended 31 December 2022 was estimated using a discounted cash flow (DCF) analysis applying the expected cash flow approach. For this approach, management prepared two scenarios instead of a single cash flow scenario:
The 'growth scenario' is based on the assumption that the Group almost doubles in terms of the number of clubs in the forecast period 2023-2027. Given the track record of the Group (from 338 to 1,200 clubs in the period 2015-2022) and Basic-Fit's growth ambitions, management considers this the most realistic scenario.
The 'consolidation scenario' is based on the assumption that the Group stops opening new clubs as of 2023.
In both scenarios, the EBITDA-margins are expected to increase to slightly above the EBITDA margins that are already realised in the currently mature clubs (before the impact of COVID-19) as a result of an increase in revenues (including an increase in revenue per member) and as a result of synergies on overhead and marketing costs.
While many scenarios and probabilities may exist, management ultimately believes that these two scenarios reflect a representative range of possible outcomes. The calculations for these cash flow projections are based on financial budgets and business plans prepared by management and approved by the Management Board. The budgets and business plans are updated to reflect the most recent developments as at the reporting date. Management\u2019s expectations reflect the performance to the reporting date and are based on its experience in times of recession and consistent with the assumptions that a market participant would make.
Based on the calculated recoverable amounts in the 2022 impairment test of the 'growth scenario', there is significant headroom1 for all CGUs (on average more than 300% of the total carrying amount2). The sensitivity analysis conducted, including a terminal growth rate of 0.0% instead of 2.0%, does not indicate that a reasonably possible change in the key assumptions on which the Group has based its determination of the recoverable amounts would result in impairment.
Although the 'consolidation scenario' is considered to be less likely than the 'growth scenario', Basic-Fit also tested for impairment based on a scenario that the Group does not open any clubs as of 2023, meaning that the total number of clubs remains stable at 1,200. In this more conservative scenario, there is also ample headroom, varying from more than 40% for CGU Spain up to more than 200% for all other CGUs. A similar sensitivity analysis for the the 'consolidation scenario' as conducted for the 'growth scenario' does not indicate that a reasonably possible change in the key assumptions on which the Group has based its determination of the recoverable amounts of the 'consolidation scenario' would result in any impairment.
Goodwill on the acquisition of subsidiaries is included in intangible assets. Goodwill is not amortised but is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
The Group tests goodwill and other applicable assets for impairment annually in December, or whenever management identifies conditions that may indicate a risk of impairment, by comparing their recoverable amount with their carrying amount.
Goodwill is allocated to CGUs for the purpose of impairment testing. The goodwill is allocated to those CGUs, or groups of CGUs, that are expected to benefit from the business combination in which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal management purposes. Management monitors goodwill on a country basis. Therefore, goodwill has been allocated to the Netherlands, Belgium, Luxembourg, France and Spain. An impairment loss is recognised for the amount by which the asset\u2019s carrying amount exceeds its recoverable amount and is recognised immediately in the statement of profit or loss. The recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and its value in use. In estimating the recoverable amount, management is required to make an estimate of the expected future cash flows from the cash-generating unit in the forecast period and also to determine a suitable discount rate in order to calculate the present value of those cash flows. Such estimates are subject to a certain degree of judgement and uncertainty.
Impairments to goodwill are not subsequently reversed.
Reference is also made to note 4.5 Business combinations.
The recoverable amount as at 31 December 2021 and 2022 was determined based on fair value less cost of disposal calculations, based on a market participant's perspective, using cash flow projections based on the financial forecast, covering a five-year period. These cash flow projections include both existing clubs and new club openings.
Discount rates used are post-tax and reflect specific risks relating to the relevant operating segments and market uncertainties in general. Management considered the effects of applying a pre-tax approach and concluded that this will not materially change the outcome of the impairment test.
The post-tax discount rates applied to the cash flow projections are shown in the table below. Cash flows beyond the five-year period are extrapolated using a terminal growth rate of 2.0% (2021: 0.5%) for all CGUs, which is the lowest of the current risk free rate and the long term inflation expectation.
Post-tax WACC discount rate
| \u00a0 | Netherlands | Belgium | Luxembourg | France | Spain | Germany |
|---|---|---|---|---|---|---|
| 2022 | 10.2% | 10.9% | 10.2% | 10.8% | 12.1% | 10.2% |
| 2021 | 7.1% | 7.6% | 7.1% | 7.5% | 8.3% | - |
Pre-tax WACC discount rate
| \u00a0 | Netherlands | Belgium | Luxembourg | France | Spain | Germany |
|---|---|---|---|---|---|---|
| 2022 | 12.7% | 13.7% | 13.0% | 13.0% | 15.1% | 12.2% |
| 2021 | 9.1% | 9.5% | 9.3% | 9.2% | 10.0% | - |
Risks in relation to climate-related matters have been considered in determining the values of the key assumptions, but did not materially impact the measurement of the recoverable amount.
The input to the Group\u2019s key assumptions includes those that are based on non-observable market data (level 3 input in accordance with IFRS 13).
The calculations of fair value less cost of disposal for the CGUs are most sensitive to the following assumptions:
\u2022 Terminal growth rate;
\u2022 Discount rates;
\u2022 Revenue growth; and
\u2022 EBITDA margin improvement.
Terminal growth rate \u2013 The terminal growth rate is based on market development and industry expectations.
Discount rates \u2013 The post-tax rates used to discount the projected cash flows reflect specific risks relating to relevant CGUs, based on market data in which both the cost of equity and cost of debt are derived on the basis of a peer group of companies operating in the same industry as Basic-Fit.
Revenue growth \u2013 The growth rates are based on historical experience of membership developments taking into consideration the maturity of existing clubs. In addition, differences in revenue growth per CGU depend on the number of clubs we expect to open per country.
The 'growth scenario' assumes a compound annual growth rate of revenues over the forecast budget period 2023-2027 of 9% (2021: 13%) for the Netherlands, 11% (2021: 15%) for Belgium, 4% (2021: 9%) for Luxembourg, 18% (2021: 27%) for France, 40% (2021: 58%) for Spain and 159% for Germany. In the 'consolidation scenario', the average annual growth rate of revenues for all CGUs is 4.9% (2021: 8.5%). After the forecast period, revenues are expected to increase by 2.0% annually in both scenarios.
EBITDA margin improvement \u2013 The cash flow projections assume long term EBITDA margins in line with those already realised in the currently mature clubs (before the impact of COVID-19), with an increase as a result of synergies on overhead and marketing in the 'growth scenario' and an increase in revenue per member.
The movement in other intangible assets over the years was as follows:
| \u00a0 | Trademark | Customer relationships | Other intangible assets | Total |
|---|---|---|---|---|
| As at 1 January 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 44,918 | 63,516 | 29,300 | 137,734 |
| Accumulated impairments and amortisation | (15,722) | (58,927) | (14,436) | (89,085) |
| Net book value | 29,196 | 4,589 | 14,864 | 48,649 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Year ended 31 December 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Opening net book value | 29,196 | 4,589 | 14,864 | 48,649 |
| Additions | - | - | 5,839 | 5,839 |
| Cost of disposals | - | - | (2,451) | (2,451) |
| Amortisation for the year | (2,245) | (2,330) | (6,271) | (10,846) |
| Accumulated depreciation of disposals | - | - | 2,452 | 2,452 |
| Closing net book value | 26,951 | 2,259 | 14,433 | 43,643 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As at 31 December 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 44,918 | 63,516 | 32,688 | 141,122 |
| Accumulated impairments and amortisation | (17,967) | (61,257) | (18,255) | (97,479) |
| Net book value | 26,951 | 2,259 | 14,433 | 43,643 |
| \u00a0 | Trademark | Customer relationships | Other intangible assets | Total |
|---|---|---|---|---|
| Year ended 31 December 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Opening net book value | 26,951 | 2,259 | 14,433 | 43,643 |
| Additions | - | - | 7,341 | 7,341 |
| Acquired through business combinations1 | - | 293 | - | 293 |
| Cost of disposals | - | - | (8,508) | (8,508) |
| Amortisation for the year | (2,246) | (1,319) | (5,124) | (8,689) |
| Accumulated depreciation of disposals | - | - | 8,495 | 8,495 |
| Closing net book value | 24,705 | 1,233 | 16,637 | 42,575 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As at 31 December 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 44,918 | 63,809 | 31,521 | 140,248 |
| Accumulated impairments and amortisation | (20,213) | (62,576) | (14,884) | (97,673) |
| Net book value | 24,705 | 1,233 | 16,637 | 42,575 |
Customer relationships and brand names acquired in a business combination are recognised at fair value at the acquisition date. Separately acquired customer relationships and brand names are recognised at historical cost. Customer relationships and brand names have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses. Brand names are amortised on a straight-line basis over their estimated useful life of 20 years. For customer relationships, amortisation is calculated based on the pattern of economic benefits that Basic-Fit obtains from these customer relationships. If such a pattern cannot be reliably estimated the amortisation is calculated using the straight-line method over their estimated useful lives of 7-8 years.
Other intangible assets are mostly software-related and are measured at cost on initial recognition. Following initial recognition, other intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is recognised in the statement of profit or loss when incurred.
Costs associated with maintaining computer software programmes are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets when the following criteria are met:
\u2022 it is technically feasible to complete the software product so that it will be available for use;
\u2022 management intends to complete the software product and use or sell it; \u2022 there is an ability to use or sell the software product;
\u2022 it can be demonstrated how the software product will generate probable future economic benefits;
\u2022 adequate technical, financial and other resources to complete the development and to use or sell the software product are available; and
\u2022 the expenditure attributable to the software product during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the software product include the software development employee costs. Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
Judgement is required in evaluating whether subsequent development expenditure is to be capitalised as an internally generated intangible asset or expensed as incurred. The key elements of judgement are whether the development project will generate incremental probable future economic benefit and which projects result in substantial improvements that increase the functionality of the asset. Economic benefit is determined as either an increase in revenues or a reduction in costs. Only those projects that are a substantial improvement and that result in direct and incremental economic benefit will be capitalised.
Software-as-a-Service (SaaS) arrangements are service contracts providing the Group with the right to access the cloud provider\u2019s application software over the contract period. Costs incurred to configure or customise, and the ongoing fees to obtain access to the cloud provider\u2019s application software, are recognised as operating expenses when the services are received, unless the criteria to recognise the expenditures as an intangible asset are satisfied.
The useful lives of intangible assets are assessed as either finite or indefinite. The Group has assessed the remaining useful life to be finite for all recognised other intangible assets.
Other intangible assets with finite lives are amortised over their useful economic lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit or loss in the expense category consistent with the function of the intangible assets.
Computer software development costs recognised as assets are amortised over their estimated useful lives, which do not exceed five years.
Gains or losses arising from the derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised.
Other intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset\u2019s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and its value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows, which are largely independent of the cash inflows from other assets or groups of assets (CGUs). Other intangible assets are tested for impairment as part of the CGUs and as further disclosed in note 4.1 Goodwill.
Non-financial assets other than goodwill that have suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
The Group determines whether other intangibles assets, as well as property, plant and equipment and right-of-use assets are impaired whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. This requires an estimation of the recoverable amount of the relevant CGU. The recoverable amount is the higher of fair value less costs of disposal and value in use. For the purpose of impairment testing, assets are grouped at the lowest levels for which there are separately identifiable cash flows, known as CGUs.\u00a0
Impairment testing is an area involving management judgement, requiring assessment as to whether the carrying amount of assets can be supported by the net present value of future cash flows derived from such assets, using cash flow projections that have been discounted at an appropriate rate. In calculating the net present value of the future cash flows, certain assumptions need to be made in respect of highly uncertain matters. Furthermore, for impairment testing, reference is made to note 4.1 Goodwill.
No impairment charge has been recorded for other intangible assets in either period presented.
The useful lives and residual values of the Group\u2019s assets are determined by management at the time the asset is acquired and reviewed annually for appropriateness. Estimated useful economic lives of property, plant and equipment, and intangibles are based on management's judgement and experience. The depreciation or amortisation charge is adjusted prospectively when management ascertains that the actual useful life differs materially from the estimates used to calculate depreciation and amortisation. Due to the significance of capital investment, variations between actual and estimated useful lives could impact operating results both positively and negatively.
The useful life used to amortise intangible assets relates to the expected future performance of the assets acquired and management's judgement for the period over which economic benefit will be derived from the asset.
Changes in useful lives and residual values did not result in any material changes to the Group\u2019s deprecation or amortisation charge in the years reported.
Costs incurred to configure or customise the cloud provider\u2019s application software are recognised as operating expenses when the services are received. In a contract under which the cloud provider provides both the SaaS configuration and customisation, and the SaaS access over the contract term, the directors applied judgement to determine whether these services are distinct from each other or not, and therefore, whether the configuration and customisation costs incurred are expensed as the software is configured or customised (i.e. upfront), or over the SaaS contract term.
Specifically, where the configuration and customisation activities significantly modify or customise the cloud software, these activities are not distinct from the access to the cloud software over the contract term. Judgement has been applied in determining whether the degree of customisation and modification of the cloud-based software is significant. At 31 December 2022, the Group recognised no prepayments (2021: \u20ac249 thousand) in respect of customisation and configuration activities undertaken in implementing SaaS arrangements that are considered not to be distinct from the access to the SaaS access over the contract term.
The movement in property, plant and equipment during the years was as follows:
| \u00a0 | Land and building | Building improvement | Other fixed assets | Total |
|---|---|---|---|---|
| As at 1 January 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,000 | 735,113 | 421,573 | 1,158,686 |
| Accumulated impairments and depreciation | (500) | (202,292) | (208,779) | (411,571) |
| Net book value | 1,500 | 532,821 | 212,794 | 747,115 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Year ended 31 December 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Opening net book value | 1,500 | 532,821 | 212,794 | 747,115 |
| Additions | - | 138,316 | 77,071 | 215,387 |
| Cost of disposals | - | (2,797) | (2,834) | (5,631) |
| Transfer (cost) | - | (15,272) | 15,272 | - |
| Transfer (accumulated depreciation) | - | 13,769 | (13,769) | - |
| Depreciation for the year | (50) | (68,105) | (57,031) | (125,186) |
| Impairment | - | (112) | - | (112) |
| Accumulated depreciation of disposals | - | 2,797 | 2,826 | 5,623 |
| Closing net book value | 1,450 | 601,417 | 234,329 | 837,196 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As at 31 December 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,000 | 855,360 | 511,082 | 1,368,442 |
| Accumulated impairments and depreciation | (550) | (253,943) | (276,753) | (531,246) |
| Closing net book value | 1,450 | 601,417 | 234,329 | 837,196 |
| \u00a0 | Land and building | Building improvement | Other fixed assets | Total |
|---|---|---|---|---|
| Year ended 31 December 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Opening net book value | 1,450 | 601,417 | 234,329 | 837,196 |
| Additions | - | 194,321 | 124,965 | 319,286 |
| Acquired through business combinations1 | - | 2,198 | 130 | 2,328 |
| Cost of disposals | - | (13,567) | (53,484) | (67,051) |
| Depreciation for the year | (25) | (80,329) | (70,780) | (151,134) |
| Accumulated depreciation of disposals | - | 13,447 | 35,487 | 48,934 |
| Closing net book value | 1,425 | 717,487 | 270,647 | 989,559 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As at 31 December 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,000 | 1,040,000 | 583,846 | 1,625,846 |
| Accumulated impairments and depreciation | (575) | (322,513) | (313,199) | (636,287) |
| Closing net book value | 1,425 | 717,487 | 270,647 | 989,559 |
As at 31 December 2022, the carrying amount of 'Other fixed assets' includes assets under construction of \u20ac20.4 million (2021: \u20ac7.4 million) and fitness equipment leased out or available to be leased out as part of the All-in membership for a total of \u20ac21.2 million (2021: nil). In 2021, transfers between building improvement and other fixed assets of \u20ac15.3 million (less \u20ac13.8 million accumulated depreciation) related to equipment items, previously recognised as part of building improvement.
In 2022, no impairment losses were recognised, In 2021, the impairment loss of \u20ac112 thousand represented the write-down of certain property, plant and equipment in Luxembourg.
Additions to other fixed assets include a \u20ac44 million transfer from inventories related to fitness equipment in July 2022. Part of this equipment, with a book value of \u20ac18 million, was acquired by a fitness equipment supplier in December 2022. This disposal is partly settled with purchase invoices in 2022 and will, for the remaining outstanding balance, be settled with purchase invoices in 2023. As both the transfer and the sale are non-cash transactions, these are adjusted in the consolidated statement of cash flows.
Property, plant and equipment is stated at historical cost less accumulated depreciation and accumulated impairment losses. Historical costs include expenditure that is directly attributable to the acquisition of the items and is calculated after deducting trade discounts.
Subsequent costs are included in the asset\u2019s carrying amount, or recognised as a separate asset as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the costs of the item can be measured reliably.
The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. Depreciation is calculated using the straight-line method to allocate their costs, net of their residual values, over their estimated useful lives as follows:
\u2022 Land: not depreciated
\u2022 Building: 30 years;
\u2022 Building improvements: 5\u201320 years;
\u2022 Exercise equipment: 4\u20138 years; and
\u2022 Other property, plant and equipment: 5\u201310 years.
The assets\u2019 residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in Other operating income in the consolidated statement of profit or loss.
Fixed assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset\u2019s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and its value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows, which are largely independent of the cash inflows from other assets or groups of assets (CGUs).
Non-financial assets other than goodwill that have suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
For significant estimates related to impairment testing and useful lives, see note 4.2 Other intangible assets.
The Group has lease contracts for buildings, vehicles and, to a limited extent, other equipment used in its operations. Leases for buildings generally have contractual lease terms of between nine and twenty years, while vehicles and other equipment generally have contractual lease terms of between three and five years. The Group\u2019s obligations under its leases are secured by the lessor\u2019s title to the leased assets. The Group has several lease contracts that include extension and termination options and variable lease payments, which are discussed in more detail below.
The Group also has certain leases with contractual lease terms of twelve months or less and leases for low-value office equipment. The Group applies the \u2018short-term lease\u2019 and \u2018lease of low-value assets\u2019 recognition exemptions for these leases.
Set out below are the carrying amounts of right-of-use assets recognised and the movements over the years:
| \u00a0 | Leased buildings | Leased vehicles | Other equipment | Total |
|---|---|---|---|---|
| As at 1 January 2021 | 1,100,412 | 3,462 | 442 | 1,104,316 |
| Additions | 188,567 | - | - | 188,567 |
| Remeasurements | 59,237 | 1,696 | - | 60,933 |
| Depreciation | (145,591) | (1,914) | (232) | (147,737) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As at 31 December 2021 | 1,202,625 | 3,244 | 210 | 1,206,079 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Additions | 230,312 | - | - | 230,312 |
| Acquired through business combinations1 | 510 | - | - | 510 |
| Remeasurements | 115,531 | 1,514 | (19) | 117,026 |
| Depreciation | (169,410) | (2,099) | (57) | (171,566) |
| As at 31 December 2022 | 1,379,568 | 2,659 | 134 | 1,382,361 |
Set out below are the carrying amounts and the movements during the years of lease liabilities related to these right-of-use assets:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| As at 1 January | 1,305,159 | 1,187,663 |
| Additions | 231,285 | 190,319 |
| Remeasurements | 117,045 | 60,890 |
| Accretion of interest | 32,573 | 32,922 |
| COVID-19 rent credits received | (2,415) | (23,143) |
| Payment of lease instalments | (202,108) | (143,492) |
| As at 31 December | 1,481,539 | 1,305,159 |
| Of which: | \u00a0 | \u00a0 |
| Non-current lease liabilities | 1,265,086 | 1,109,022 |
| Current lease liabilities | 216,453 | 196,137 |
Remeasurements to right-of-use assets and lease liabilities are related the (periodical) indexation of leasepayments, renewals of lease contracts, as well as changes in the assumptions related to renewal options.
As a result of the deferral of lease payments and rent credits received, the lease payments in 2022 as reported in the overview above (\u20ac202.1 million), are recognised in the statement of cash flows as lease liabilities interest paid (\u20ac33.4 million) and repayment of lease liability principal (\u20ac168.7 million) respectively. Lease payments in 2021 (\u20ac143.5 million), are recognised in the statement of cash flows as lease liabilities interest paid (\u20ac28.5 million) and repayment of lease liability principal (\u20ac115.0 million) respectively.
The maturity analysis of lease liabilities is disclosed in note 6.4 Financial risk management.
As part of its response to COVID-19, Basic-Fit negotiated rent waivers with landlords for a total amount of \u20ac2.4 million (2021: \u20ac23.1 million). This is recorded as a separate line item in the consolidated statement of profit or loss.
The following amounts are recognised in profit or loss during the years related to right-of-use assets and lease liabilities:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Depreciation expense of right-of-use assets | (171,566) | (147,737) |
| Interest expense on lease liabilities | (32,573) | (32,922) |
| COVID-19 rent credits | 2,415 | 23,143 |
| Expense relating to short-term leases1 | (1,156) | (391) |
| Expense relating to leases of low-value assets1 | (576) | (670) |
| Expense relating to lease recalculations and other lease related cost1 | 83 | (18) |
| Total amounts recognised in profit or loss | (203,373) | (158,595) |
The Group had total lease-related cash outflows of \u20ac203.8 million in 2022 (2021: \u20ac144.6 million). The Group also had non-cash additions to right-of-use assets and lease liabilities of \u20ac348.3 million in 2022 (2021: \u20ac251.2 million). The future cash outflows relating to leases that have not yet commenced are disclosed in note 7.2 Contingencies and commitments.
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The right-of-use asset for acquired leases is measured at the present value of the remaining lease payments adjusted for any favourable or unfavourable lease terms recognised when compared to market terms. These favourable and unfavourable contracts are recognised at fair value on the acquisition date for contracts whose terms are respectively favourable or unfavourable compared with current market terms, and they are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method, based on the term of the lease contracts.
Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of their estimated useful life and the lease term.
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of whether to purchase the underlying asset.
The Group applied the practical expedient issued by the International Accounting Standards Board as a part of the Amendment to IFRS 16 (COVID-19-Related Rent Concessions) and records rent credits granted by lessors as profit in the Consolidated Statement of Profit or Loss and not as a lease modification resulting in the remeasurement of right-of-use assets and lease liabilities.
The Company has elected to separate lease and non-lease components included in lease payments for property leases. Regarding vehicles leases, Basic-Fit applies the practical expedient not to separate non-lease components from lease components. Therefore, the full monthly lease fees will be reflected on Basic-Fit\u2019s statement of financial position. Basic-Fit applies a portfolio approach for vehicle leases to effectively account for the right-of-use assets and lease liabilities.
The Group applies the short-term lease recognition exemption to its short-term leases (i.e. those leases that have a lease term of twelve months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases that are considered of low value (i.e. below \u20ac5,000). Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a straight-line basis over the lease term.
Extension options
Most of the lease contracts for buildings include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and to align with the Group\u2019s business needs. Management exercises significant judgement in determining whether it is reasonably certain that these extension and termination options will be exercised (see below).
Extension options are included in the lease term when the Group has such an economic incentive that exercising the option is reasonably certain. The Group considers available evidence at the time of the assessment, including potentially favourable terms upon extension, potential termination penalties, the relative costs associated with potential relocation or termination of the lease and the extent of leasehold improvements undertaken. Additionally, the size and the relative importance of the leased premises as well as the availability of easily substitutable assets are taken into consideration when assessing whether the Group has an economic incentive to extend a lease for which it holds an option to do so.
Periods covered by termination options are included as part of the lease term only when it is reasonably certain that these will not be exercised.
Significant judgement in determining the lease term of contracts with renewal and termination options The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain that this will be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain that this will not be exercised.
The Group applies judgement in evaluating whether it is reasonably certain it will or will not exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or the termination. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation of the leased asset).
The Group cannot readily determine the interest rate implicit in the lease, so it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group \u2018would have to pay\u2019, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease. The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary\u2019s stand-alone credit rating).
Basic-Fit\u2019s IBRs are built up of the following components:
\u2022 Base rate: risk-free rate
\u2022 Country risk premium: premium for the higher risk associated with the country where the lease is situated
\u2022 Credit rating (unsecured): premium based on Basic-Fit's credit rating per country
\u2022 Lease-specific adjustment: adjustment to the (unsecured) credit rating to reflect the secured borrowing position related to the lease
Basic-Fit determines the IBR per country, taking into account the term of the lease based on three ageing buckets (up to 10 years, 10-20 years and more than 20 years). The IBRs range from 1.3% to 5.4% in 2022 (2021: 0.4% to 2.7%).
In 2022, the Group acquired four fitness clubs in the Netherlands through asset deals and one fitness club in Germany through a share deal:
| Acquiree/ Club location | Country | Deal type | Month |
|---|---|---|---|
| Cologne (DE) | Germany | Sharedeal1 | March 2022 |
| Veldhoven (NL) | The Netherlands | Assetdeal | April 2022 |
| Amstelveen (NL) | The Netherlands | Assetdeal | July 2022 |
| Rotterdam (NL) | The Netherlands | Assetdeal | July 2022 |
| Waalwijk (NL) | The Netherlands | Assetdeal | July 2022 |
All acquisitions are considered good opportunities for further growth and with the acquisition in Germany, this meant the start for Basic-Fit in a sixth country. The total purchase price net of cash was \u20ac5.3 million, which was mostly allocated to property, plant and equipment, receivables, customer relationships and a favourable lease contract (included in right-of-use assets). The goodwill of \u20ac1.2 million represents the excess of the consideration transferred after the recognition of newly acquired net identifiable assets and liabilities totalling \u20ac4.1 million and relates to the fact that Basic-Fit foresees good opportunities on the locations and these locations fit well within the cluster strategy of the Group.
Of these acquisitions, three clubs were acquired from a party related to the CEO of the Company at an acquisition price of \u20ac4.1 million (see note 8.3 Related party transactions). These transactions were made at terms equivalent to those that prevail in arm\u2019s length transactions.
There were no acquisitions in the year 2021.
The following tables summarise the considerations paid for the acquisitions in 2022 and 2021, the fair value of assets acquired and the liabilities assumed at the acquisition date.
| Fair value recognised on acquisition | 2022 | 2021 |
|---|---|---|
| Assets | \u00a0 | \u00a0 |
| Property, plant and equipment | 2,328 | - |
| Customer relationships | 293 | - |
| Favourable lease contract (right-of-use assets) | 510 | - |
| Non-current financial assets | 5 | - |
| Inventories and receivables | 1,361 | - |
| Cash and cash equivalents | 22 | - |
| Liabilities | \u00a0 | \u00a0 |
| Other provisions | (166) | - |
| Accrued expenses and deferred income | (239) | - |
| Deferred income tax assets and liabilities | (79) | - |
| Total identifiable net assets acquired at fair value | 4,035 | - |
| Goodwill arising on acquisition | 1,239 | - |
| Purchase consideration transferred | 5,274 | - |
| Less: cash acquired | (22) | - |
| Net outflow of cash - investing activities | 5,252 | - |
From the date of acquisition, the revenue and net income of the business combinations acquired in 2022 for the period 2022 amounts to \u20ac1.5 million and a loss of \u20ac1.1 million respectively. If the business combinations had been acquired at the start of the annual reporting period, the revenue and net income of the acquired business combinations would have been \u20ac4.1 million and a loss of \u20ac0.4 million respectively.
Business combinations are accounted for using the acquisition method. The costs of an acquisition are measured as the aggregate of the consideration transferred, which is measured at fair value at the acquisition date and the amount of any non-controlling interest in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interest in the acquiree at fair value or at the proportionate share of the acquiree\u2019s identifiable net assets.
Acquisition-related costs are expensed as incurred and included in administrative expenses.
The Group determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.
Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent considerations classified as equity are not remeasured and its subsequent settlement is accounted for within equity. Contingent considerations classified as assets or liabilities that are financial instruments and within the scope of IFRS 9 Financial Instruments, are measured at fair value with the changes in fair value recognised in the statement of profit or loss in accordance with IFRS 9. Other contingent considerations that are not within the scope of IFRS 9 are measured at fair value at each reporting date with changes in fair value recognised in profit or loss.
Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired exceeds the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in the excess fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group\u2019s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed of in these circumstances is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained.
The notes in this section specify the Group\u2019s working capital, including disclosures related to cash and cash equivalents.
The composition of the inventories was as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Food and drinks | 3,621 | 3,288 |
| Fitness equipment | 755 | 20,144 |
| Other goods | 16,517 | 8,280 |
| Total | 20,893 | 31,712 |
'Food and drinks' consist primarily of sportswater that members with a (paid) 'sportswater add-on' can drink in the clubs. 'Fitness equipment' relates to equipment that is held for sale to members and third parties. The decrease in 2022, can be explained by a transfer to fixed assets as this fitness equipment is no longer held for sale but is leased out or available to be leased out to members as part of the All-in membership, as further disclosed in note 4.3 Property, plant and equipment.
'Other goods' includes goods that are sold via the online store and vending machines and to third parties, which increased due to a high volume of purchases in December 2022.
Inventories are stated at the lower of costs and net realisable value. Costs comprise direct materials. Costs are assigned to individual items of inventory on the basis of weighted average costs. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Member and trade receivables | 54,082 | 28,011 |
| Less: allowance for expected credit losses | (18,436) | (18,594) |
| Receivables \u2013 net | 35,646 | 9,417 |
| Security deposits | 8,912 | 6,740 |
| Loan receivable | 29 | 40 |
| Taxes and social charges (mainly VAT) | 17,709 | 18,477 |
| Prepayments | 5,236 | 9,543 |
| Other receivables and accrued income | 18,213 | 34,642 |
| Total receivables | 85,745 | 78,859 |
| Less: non-current portion of security deposits | 8,912 | 6,740 |
| Less: non-current loans receivable | 29 | 40 |
| Total non-current portion | 8,941 | 6,780 |
| Total current portion | 76,804 | 72,079 |
The decrease in 'Other receivables and accrued income' mainly relates to government grants receivable.
The fair value of the receivables approximates the carrying amount. No breakdown of the fair values of trade and other receivables has been included, as the differences between the carrying amount and the fair values are insignificant. In determining the expected credit loss allowance, the Group has considered any change in the risk profile of its members following the COVID-19 pandemic and the economic uncertainty.
The carrying amounts of the Group\u2019s trade and other receivables are all denominated in euros.
Movements in the Group provision for impairment of receivables were as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| As at 1 January | (18,594) | (15,418) |
| Provision for impairment recognised during the year | (14,647) | (19,468) |
| Receivables written off during the year as uncollectable | 14,805 | 16,292 |
| As at 31 December | (18,436) | (18,594) |
The creation and release of provisions for impaired receivables have been included in 'Other operating expenses' in the statement of profit or loss (note 3.8 Other operating expenses). Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash. As described in note 6.4 Financial risk management regarding credit risk, all member-related receivable balances are automatically past due. The estimated provision for impairment losses is recognised based on the expected credit loss for each of the ageing buckets.
The other classes in trade and other receivables do not contain impaired assets and are not past due. Based on the credit history of these other classes, the Group expects these amounts to be received when due (the Group does not hold any collateral with respect to these receivables).
Trade and other receivables include amounts due from members for services performed in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets. Trade receivables are generally due for settlement within 30 days or less and are therefore all classified as current.
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost, using the effective interest rate method, less provision for impairment.
Reference is made to note 6.5 Financial instruments for the accounting policy related to financial assets and liabilities, derivative financial instruments and fair value measurement.
The composition of cash and cash equivalents was as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Cash in bank and on hand | 42,165 | 69,712 |
| Cash in transit | 1,345 | 392 |
| Total | 43,510 | 70,104 |
All cash and cash equivalents are available for immediate use by the Group, except for an amount of \u20ac205 thousand (2021: \u20ac205 thousand) related to bank guarantees.
In the statement of cash flows, cash and cash equivalents include cash on hand and deposits held at call with financial institutions. In the statement of financial position, bank overdrafts are shown within borrowings in current liabilities.
The composition of trade and other payables was as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Trade payables | 149,167 | 121,433 |
| Deferred revenues | 17,435 | 18,688 |
| Holiday allowance and vacation days accrual | 11,274 | 9,416 |
| VAT payable | 3,303 | 685 |
| Payroll tax payable | 7,012 | 6,248 |
| Interest payable | 1,705 | 516 |
| Investment obligations | 10,894 | 31,586 |
| Housing cost payable | 12,608 | 13,676 |
| Other liabilities and accrued expenses | 9,418 | 8,955 |
| Total | 222,816 | 211,203 |
All current liabilities fall due in less than one year. Investment obligations are related to investments in opened clubs, for which no invoice is received yet.
The fair value of the current liabilities approximates the carrying amount due to their short-term nature. The decrease in deferred revenues is disclosed in more detail in note 3.2 Revenue. The increase in other lines in the table above are mostly directly related to the growth in members and clubs.
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid. The amounts are unsecured and are usually paid within 30-60 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within twelve months after the reporting period. They are initially recognised at their fair value and subsequently measured at amortised cost using the effective interest rate method.
For deferred revenues, reference is made to note 3.2 Revenue.
This section includes notes related to financing items such as equity, borrowings, financial risk management and financial instruments. Related items such as the earnings per share calculation and financial income and costs, are included in this section.
The subscribed share capital as at 31 December 2022 amounted to \u20ac3.96 million (2021: \u20ac3.96 million) and was divided into 66,000,000 shares fully paid-up with a nominal value per share of \u20ac0.06.
In April 2021, the Company issued 6,000,000 ordinary shares at a price of \u20ac34.00 per share resulting in an increase in total equity value of \u20ac204 million. Of this amount, \u20ac203.6 million is recorded in the share premium reserve and \u20ac360 thousand in the share capital.
The movement in share capital over the past two years was as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| As at 1 January | 3,960 | 3,600 |
| Issued ordinary shares | - | 360 |
| As at 31 December | 3,960 | 3,960 |
The share premium of \u20ac203.6 million from the proceeds of the issuance of new shares in April 2021 is recorded less incremental costs qualified as directly attributable to the newly issued shares of \u20ac4.2 million, net of the related tax impact of \u20ac1.1 million.
The movement in share premium over the past two years was as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| As at 1 January | 690,526 | 490,025 |
| Issued ordinary shares (net of transaction costs) | - | 200,501 |
| As at 31 December | 690,526 | 690,526 |
In 2022, the Company purchased 22,263 shares for a total amount of \u20ac878 thousand to satisfy obligations related to the equity-settled share-based compensation plans. In 2021, there were no treasury share transactions.
The movement in the equity settled share-based reserve over the past two years was as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| As at 1 January | 1,937 | 1,590 |
| Share-based payments expense during the year | 28 | 347 |
| Exercised share-based payments during the year | (1,085) | - |
| As at 31 December | 880 | 1,937 |
The share-based payments reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration. See note 3.5 Share-based payments for further details.
The movement over the past two years was as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| As at 1 January | 48,720 | - |
| Issuance of convertible bonds (net of tax) | - | 48,720 |
| As at 31 December | 48,720 | 48,720 |
The equity component of convertible bonds reserve is recognised net of tax and relates to the convertible bonds issued by the Group in June 2021. As disclosed in note 3.9 the deferred taxes relating to the issue of these convertible bonds were directly debited to equity.
Reference is made to note 6.3 Borrowings and note 6.5 Financial instruments for the disclosure and accounting policy of the convertible bond.
The losses for the respective periods 2022 and 2021 have been included in retained earnings.
Ordinary shares are classified as share capital.
The share premium represents the amount by which the fair value of the consideration received exceeds the nominal value of shares issued. Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction, net of tax, from the proceeds.
Treasury shares are deducted from equity for the consideration paid, including any directly attributable incremental costs (net of income taxes), until the shares are cancelled or reissued. When such shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and related income tax effects, is included in equity.
Reference is made to the accounting policy in note 6.5 Financial instruments related to compound financial instruments for the accounting policy related to 'equity components of convertible bonds'.
The calculation of basic and diluted earnings per share is based on the following data:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Earnings | \u00a0 | \u00a0 |
| Profit (loss) for the period attributable to the ordinary equity holders of the Company | (3,687) | (150,048) |
| Interest on convertible bonds (net of tax) | 9,811 | 5,177 |
| Profit attributable to ordinary equity holders of the parent adjusted for the effect of dilution | 6,124 | (144,871) |
| \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 |
| Number of shares | \u00a0 | \u00a0 |
| Weighted average number of ordinary shares for basic earnings per share | 66,000,000 | 64,076,712 |
| Effect of dilutive potential ordinary shares | 5,999,012 | 3,273,823 |
| Weighted average number of ordinary shares for diluted earnings per share | 71,999,012 | 67,350,535 |
| \u00a0 | \u00a0 | \u00a0 |
| Earnings per share (in \u20ac) | \u00a0 | \u00a0 |
| Basic earnings per share | (0.06) | (2.34) |
| Diluted earnings per share | (0.06) | (2.34) |
The number of potential dilutive weighted-average shares not taken into consideration above, due to their antidilutive effect, amount to 5,999,012 ordinary shares (2021: 3,237,823). These shares are related to convertible bonds.
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date these financial statements were authorised.
Basic earnings per share are calculated by dividing the net result for the year attributable to ordinary equity holders of the parent company by the weighted average number of ordinary shares outstanding during the year. Treasury shares are deducted from the number of ordinary shares outstanding on a weighted basis.
Diluted earnings per share are calculated by dividing the net result for the year attributable to ordinary equity holders of the parent company adjusted for the interest on convertible bonds by the weighted average number of ordinary shares outstanding during the year, plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
The Group\u2018s interest-bearing borrowings at 31 December 2022 and 31 December 2021, including the movements during 2022 and 2021, are summarised in the following tables:
| \u00a0 | \u00a0 | \u00a0 | Cash settled | \u00a0 | Other changes (non-cash) | \u00a0 | \u00a0 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | Balance as at 1 January 2022 | \u00a0 | New loans | Repayments | Transaction costs | \u00a0 | Amortisation | Additions (lease liabilities) | COVID-19 rent credits | Accretion of interest | \u00a0 | Balance as at 31 December 2022 |
| Floating rate borrowings (non-current and current) | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Bank borrowings | 250,000 | \u00a0 | - | - | - | \u00a0 | - | - | - | - | \u00a0 | 250,000 |
| Drawn revolving credit facility | - | \u00a0 | 210,000 | - | - | \u00a0 | - | - | - | - | \u00a0 | 210,000 |
| GO-C facility | 40,000 | \u00a0 | - | (26,667) | - | \u00a0 | - | - | - | - | \u00a0 | 13,333 |
| Schuldschein | 83,500 | \u00a0 | - | (73,500) | - | \u00a0 | - | - | - | - | \u00a0 | 10,000 |
| Borrowing costs | (2,185) | \u00a0 | - | - | - | \u00a0 | 715 | - | - | - | \u00a0 | (1,470) |
| \u00a0 | 371,315 | \u00a0 | 210,000 | (100,167) | - | \u00a0 | 715 | - | - | - | \u00a0 | 481,863 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Fixed rate borrowings and lease liabilities (non-current and current) | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Convertible bonds \u2013 liability component | 238,581 | \u00a0 | - | - | - | \u00a0 | - | - | - | 8,667 | \u00a0 | 247,248 |
| Schuldschein | 8,000 | \u00a0 | - | - | - | \u00a0 | - | - | - | - | \u00a0 | 8,000 |
| Lease liabilities | 1,305,159 | \u00a0 | - | (202,108) | - | \u00a0 | - | 348,330 | (2,415) | 32,573 | \u00a0 | 1,481,539 |
| Other bank borrowings | 60 | \u00a0 | - | (60) | - | \u00a0 | - | - | - | - | \u00a0 | - |
| \u00a0 | 1,551,800 | \u00a0 | - | (202,168) | - | \u00a0 | - | 348,330 | (2,415) | 41,240 | \u00a0 | 1,736,787 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | 1,923,115 | \u00a0 | 210,000 | (302,335) | - | \u00a0 | 715 | 348,330 | (2,415) | 41,240 | \u00a0 | 2,218,650 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Of which: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current lease liabilities | 1,109,022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,265,086 |
| Non-current borrowings | 517,729 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 723,778 |
| Current lease liabilities | 196,137 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 216,453 |
| Current borrowings | 100,227 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 13,333 |
| \u00a0 | \u00a0 | \u00a0 | Cash settled | \u00a0 | Other changes (non-cash) | \u00a0 | \u00a0 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | Balance as at 1 January 2021 | \u00a0 | New loans | Repayments | Transaction costs | \u00a0 | Amortisation | Additions (lease liabilities) | COVID-19 rent credits | Accretion of interest | \u00a0 | Balance as at 31 December 2021 |
| Floating rate borrowings (non-current) | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Bank borrowings | 250,000 | \u00a0 | - | - | - | \u00a0 | - | - | - | - | \u00a0 | 250,000 |
| Drawn revolving credit facility | 210,500 | \u00a0 | 1,997 | (212,497) | - | \u00a0 | - | - | - | - | \u00a0 | - |
| GO-C facility | 60,000 | \u00a0 | - | (20,000) | - | \u00a0 | - | - | - | - | \u00a0 | 40,000 |
| Bridge loan | - | \u00a0 | 60,000 | (60,000) | - | \u00a0 | - | - | - | - | \u00a0 | - |
| Schuldschein | 83,500 | \u00a0 | \u00a0 | - | - | \u00a0 | - | - | - | - | \u00a0 | 83,500 |
| Borrowing costs | (2,801) | \u00a0 | - | - | - | \u00a0 | 616 | - | - | - | \u00a0 | (2,185) |
| \u00a0 | 601,199 | \u00a0 | 61,997 | (292,497) | - | \u00a0 | 616 | - | - | - | \u00a0 | 371,315 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Fixed rate borrowings and lease liabilities (non-current and current) | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Convertible bonds \u2013 liability component | - | \u00a0 | 237,700 | - | (3,743) | \u00a0 | - | - | - | 4,624 | \u00a0 | 238,581 |
| Schuldschein | 8,000 | \u00a0 | - | - | - | \u00a0 | - | - | - | - | \u00a0 | 8,000 |
| Lease liabilities | 1,187,663 | \u00a0 | - | (143,492) | - | \u00a0 | - | 251,209 | (23,143) | 32,922 | \u00a0 | 1,305,159 |
| Other bank borrowings | 120 | \u00a0 | - | (60) | - | \u00a0 | - | - | - | - | \u00a0 | 60 |
| \u00a0 | 1,195,783 | \u00a0 | 237,700 | (143,552) | (3,743) | \u00a0 | - | 251,209 | (23,143) | 37,546 | \u00a0 | 1,551,800 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | 1,796,982 | \u00a0 | 299,697 | (436,049) | (3,743) | \u00a0 | 616 | 251,209 | (23,143) | 37,546 | \u00a0 | 1,923,115 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Of which: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current lease liabilities | 1,013,496 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,109,022 |
| Non-current borrowings | 546,259 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 517,729 |
| Current lease liabilities | 174,167 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 196,137 |
| Current borrowings | 63,060 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 100,227 |
The revolving credit facility is presented as non-current borrowings, as the Group expects and has an unconditional right to renew the revolving credit facility every three months until the maturity date.
On 17 June 2021, the Company issued convertible bonds due 17 June 2028 at 100% of their nominal value in an aggregate principal amount of \u20ac303.7 million. The convertible bonds have an interest rate of 1.50% payable semi-annually in arrears in equal instalments on 17 June and 17 December each year, commencing on 17 December 2021. The convertible bonds have a maturity of seven years and a denomination of \u20ac100,000 each. The bonds are convertible into ordinary shares of the Company at the option of the bondholders during the conversion period ending on the earlier of seven business days prior to the maturity date or any relevant redemption date. The initial conversion price was set at \u20ac50.625, (a 35% premium over the reference share price) and will be subject to adjustment in certain circumstances in line with market practice.
The Company will have the option to redeem all, but not some only, of the bonds for the time being outstanding at their principal amount together with accrued interest, at any time on or after 8 July 2025 provided that the volume-weighted average price of a share on Euronext Amsterdam shall have exceeded 130% of the conversion price on each of not less than 20 trading days in any period of 30 consecutive trading days. Any outstanding bonds are also redeemable at any time after the settlement date if at least 85% of the issued bonds have been converted, settled or redeemed.
Bondholders will be entitled to require an early redemption of their convertible bonds at their principal amount, together with accrued but unpaid interest, on 17 June 2026 or in the event of a change of control as defined in the terms and conditions.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Carrying amount of liability at 1 January | 238,581 | - |
| \u00a0 | \u00a0 | \u00a0 |
| Proceeds from issue of convertible bonds | - | 303,700 |
| Transaction costs | - | (4,783) |
| Net proceeds | - | 298,917 |
| Amount classified as equity (net of transaction costs of \u20ac1.0 million)1 | - | (64,960) |
| Amount classified as liability (net of transaction costs of \u20ac3.8 million) | - | 233,957 |
| \u00a0 | \u00a0 | \u00a0 |
| Accrued interest | 13,222 | 6,902 |
| Interest paid | (4,555) | (2,278) |
| Carrying amount of liability at 31 December 2022 | 247,248 | 238,581 |
The facility agreement consists of a \u20ac250 million term loan and a \u20ac200 million revolving facility, expiring in June 2025.
The agreement includes an additional \u20ac150-million accordion facility of which \u20ac120 million (2021: \u20ac100 million) is available to be drawn at the date of publication of these financial statements. Basic-Fit can request the syndicated banks to make the remaining \u20ac30 million (2021: \u20ac50 million) available under the terms of the senior facility agreement, but that amount is not yet committed.
The interest is variable and based on Euribor plus a margin that depends on certain leverage covenants (Euribor plus margin were 4.40% as at 31 December 2022 and 2.45% as at 31 December 2021). The term loan and RCF are unsecured.\u00a0
As at 31 December 2022, an amount of \u20ac10.1 million (2021: \u20ac9.1 million) of the revolving facility of \u20ac320 million (including \u20ac120 million from the accordion) had been used for bank guarantees and \u20ac210.0 million had been drawn in cash (2021: the remaining part was not drawn).
In May 2020, the Company entered into a \u20ac60 million GO-C facility agreement, repayable quarterly on a straight line basis over two years, after an initial one-year grace period. The interest is variable and based on Euribor plus a margin that depends on certain leverage covenants (Euribor plus margin were 5.20% as at 31 December 2022 and 2.71% as at 31 December 2021). As part of the GO-C regulation, the Dutch State (Staat der Nederlanden) guarantees 80% of the loan for the benefit of the lenders. Furthermore, as part of the GO-C regulation, the Company is not allowed to pay any dividends until the loan has been fully repaid. The loan is recognised on the basis of IFRS 9 as the interest is a market-rate as required by the GO-C regulation. Therefore, IAS 20 related to accounting for government grants is not applicable. As at 31 December 2022, the remaining debt of \u20ac13.3 million (2021: \u20ac26.7 million) related to repayments within twelve months after the reporting period is classified as current borrowings.
In October 2019, Basic-Fit completed a Schuldschein issuance in euro-denominated tranches with maturities of three and five years. As at 31 December 2022, the outstanding amount was \u20ac18.0 million (2021: \u20ac91.5 million). For an amount of \u20ac8.0 million, the interest is fixed at 1.55% (2021: 2.05%) and for the remaining part, the interest is variable and based on Euribor plus a margin, together 3.45% (2021: 1.96%). This loan is unsecured. As at 31 December 2021, an amount of \u20ac73.5 million related to repayments within twelve months after the reporting period was classified as current borrowings.
The carrying amount of the borrowings is presented net of finance costs (2022: \u20ac1.5 million; 2021: \u20ac2.2 million). Finance costs are charged to the statement of profit or loss based on the effective interest rate method over the period to maturity of the loans.
This loan was repayable in quarterly instalments of \u20ac15 thousand. The interest rate is fixed at 1.90%.
The Group recognises lease liabilities to make lease payments related to the right to use the underlying assets. Reference is made to note 4.4 Right-of-use assets and lease liabilities for a more detailed disclosure.
Borrowings are initially recognised at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest rate method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period. However, a revolving credit facility is classified as non-current if the Group expects, and has the discretion, to roll over for at least twelve months after the reporting period.
The Group does not have any qualifying assets, which are assets that necessarily take a substantial period of time to prepare for their intended use or sale. Therefore, borrowing costs are not capitalised and are expensed in the period in which they are incurred.
Reference is made to note 6.5 Financial instruments for the accounting policy related to financial assets and liabilities, derivative financial instruments and fair value measurement.
The Group\u2019s activities expose it to a variety of financial risks. Management identifies and evaluates the financial risks based on principles for overall risk management. The Group\u2019s overall risk management programme seeks, in accordance with our Corporate Treasury Policy, to minimise potential adverse effects on the Group\u2019s financial performance.
Credit risk arises from cash, cash equivalents and deposits with banks and financial institutions, as well as credit exposures to outstanding receivables for membership fees or other membership services that could not be collected upfront. The carrying amounts of these financial instruments as disclosed in notes 5.2 Trade and other receivables and 5.3 Cash and cash equivalents represent the Group\u2019s maximum credit exposure.
The Group\u2019s policy is that all members need to pay membership fees upfront, which means that credit risk related to membership fees is limited to those fees that could not be collected upfront. The first measure to limit credit risk is to deny access to the services provided by the Group to members with overdue receivables until the receivables have been fully paid. The second measure is the Group\u2019s collection policy of using debt collection agencies for all receivables due for more than 120 days. The Group does not hold collateral as security for the membership receivables. The Group evaluates the concentration of risk with respect to trade receivables as low, as its members are located in several jurisdictions.
As a result of the Group\u2019s prepayment policy, any account receivables balances are automatically past due.
An ageing analysis of the Group\u2019s trade and other receivables that are past due (including provision for expected credit losses) is as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Overdue <30 days | 19,265 | 3,420 |
| Overdue 31-60 days | 2,470 | 3,829 |
| Overdue 61-90 days | 3,632 | 1,149 |
| Overdue >90 days | 10,279 | 1,019 |
| Balance incl. provision | 35,646 | 9,417 |
The receivables consist of member receivables and trade receivables. These receivables are assessed collectively to determine whether an impairment should be recognised. As a direct result of the COVID-19 pandemic, and economic uncertainty increasing in 2022, the Group noticed that it was more difficult to collect the outstanding amounts. In determining the expected credit loss allowance the Group considered any change in the risk profile of its members following the COVID-19 pandemic and the economic uncertainty as of 2022. For the receivables, the estimated impairment losses are recognised in a separate provision for impairment, which is based on the expected credit loss for each of the ageing buckets. As at 31 December 2022, the provision stood at \u20ac18.4 million (2021: \u20ac18.6 million). The Group avoids the concentration of credit risk on its cash and cash equivalents by spreading them over reputable banks: ABN AMRO, Rabobank, ING, KBC and BNP Paribas. No collateral is held for the aforementioned liquid assets.
The Group\u2019s funding strategy is focused on ensuring that it has continuous access to capital. On a weekly basis, management prepares a cash flow forecast to identify the cash needs for the short and medium term and on a quarterly basis for the longer term. Additionally, management monitors on a daily basis the intra-month cash needs by assessing the cash inflows and outflows. In direct response to the impact of the COVID-19 pandemic, management intensified the monitoring of cash needs and frequently updated the forecasts based on the latest available information and expectations related to temporary club closures and re-openings.
The revolving credit facility of \u20ac320 million (2021: \u20ac300 million) has a maturity date of June 2025. Basic-Fit can request the syndicated banks to make the remaining \u20ac30 million of the accordion facility available under the terms of the SFA, but the amount is not yet committed. The facilities can only be cancelled by the lenders upon the receipt of a timely period of notice after an event of default (including non-payment, breach of (financial) covenants or breach of other obligations, in each case subject to materiality thresholds, qualifications and cure periods).
The table below provides an overview of all committed and undrawn facilities as at 31 December 2022:
| (In \u20ac\u00a0millions) | Facility (committed) | Undrawn | Covenant applicable |
|---|---|---|---|
| Term loan | 250.0 | - | Yes |
| Revolving credit facility1 | 320.0 | 99.9 | Yes |
| GO-C facility | 13.3 | - | Yes |
| Schuldschein | 18.0 | - | Yes |
| \u00a0 | 601.3 | 99.9 | \u00a0 |
The following table analyses the Group\u2019s financial liabilities in terms of relevant maturity groupings, based on their contractual maturities for all non-derivative financial liabilities, and net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within twelve months equal their carrying balances, as the impact of discounting is not significant. For interest rate swaps, the cash flows have been estimated using forward interest-rates applicable at the end of the reporting period.
| \u00a0 | 2022 | ||||||
|---|---|---|---|---|---|---|---|
| \u00a0 | Less than 6 months | 6 months to 1 year | 1-2 years | 2-5 years | Over 5 years | Total | Carrying amount |
| Non-derivatives | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Convertible bonds | 2,278 | 2,278 | 4,555 | 13,666 | 305,978 | 328,755 | 247,248 |
| Borrowings1 | 24,094 | 10,625 | 39,126 | 470,423 | \u00a0 | 544,268 | 491,333 |
| Lease liabilities | 110,643 | 108,425 | 216,354 | 596,115 | 618,350 | 1,649,887 | 1,481,539 |
| Trade payables | 149,167 | - | - | - | - | 149,167 | 149,167 |
| Total non-derivatives | 286,182 | 121,328 | 260,035 | 1,080,204 | 924,328 | 2,672,077 | 2,369,287 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Derivative financial liability | - | - | - | - | - | - | - |
| Total derivatives | - | - | - | - | - | - | - |
| \u00a0 | 2021 | ||||||
|---|---|---|---|---|---|---|---|
| \u00a0 | Less than 6 months | 6 months to 1 year | 1-2 years | 2-5 years | Over 5 years | Total | Carrying amount |
| Non-derivatives | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Convertible bonds | 2,278 | 2,278 | 4,555 | 13,667 | 310,533 | 333,311 | 238,581 |
| Borrowings1 | 18,905 | 92,390 | 22,298 | 281,061 | - | 414,654 | 381,560 |
| Lease liabilities | 104,871 | 92,790 | 184,720 | 508,735 | 570,758 | 1,461,874 | 1,305,159 |
| Trade payables | 121,433 | - | - | - | - | 121,433 | 121,433 |
| Total non-derivatives | 247,487 | 187,458 | 211,573 | 803,463 | 881,291 | 2,331,272 | 2,046,733 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Derivative financial liability | 706 | 605 | 333 | - | - | 1,644 | 1,660 |
| Total derivatives | 706 | 605 | 333 | - | - | 1,644 | 1,660 |
Foreign exchange risk
The Group only operates in the Eurozone, so currency risk is limited, due to the fact that all revenues (and almost all expenses) are incurred in euro. There is therefore no significant exposure to foreign currency
fluctuations.
Price risk
The Group has limited exposure to price risk. The Group's main exposure is to fluctuations in energy costs. Basic-Fit has fixed prices for 75% of the expected energy consumption in 2023. To reduce the energy costs per club, Basic-Fit established an energy savings task force to scrutinise the energy consumption and identify where further efficiencies can be achieved.
Interest rate risk and cash flow risk
The Group\u2019s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. Basic-Fit aims to hedge a minimum of 50% of its variable interest exposure. The Group manages its cash flow interest rate risk by mostly using floating-to-fixed interest rate swaps. Under the swap agreements, the Group agrees with another party to exchange, at specified intervals, the difference between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional principal amounts.
The exposure of the Group\u2019s borrowings to interest rate changes and the contractual re-pricing dates of the fixed interest rate borrowings (including lease liabilities) at the end of the reporting period were as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Variable rate borrowings | 483,333 | 373,500 |
| Fixed interest rate borrowings (including lease liabilities) | 1,736,787 | 1,551,800 |
| Total | 2,220,120 | 1,925,300 |
Swaps currently in place cover approximately 42.4% (2021: 54.9%) of the variable loan principal outstanding.
The contracts require settlement of net interest receivable or payable every 90 days.
At the end of the reporting period, the Group had the following variable rate borrowings and interest rate swap contracts (which are disclosed under 'Derivative financial instruments and hedging activities' in note 6.5 Financial instruments) outstanding:
| \u00a0 | 31 December 2022 | \u00a0 | 31 December 2021 | ||||
|---|---|---|---|---|---|---|---|
| \u00a0 | Weighted average interest rate | Balance | % of the total loans | \u00a0 | Weighted average interest rate | Balance | % of the total loans |
| Bank overdrafts and bank loans | 4.36% | 483,333 | 21.77% | \u00a0 | 2.37% | 373,500 | 19.40% |
| Interest rate swaps (notional amount) | \u00a0 | (205,000) | \u00a0 | \u00a0 | \u00a0 | (205,000) | \u00a0 |
| Net exposure to cash flow interest rate risk | \u00a0 | 278,333 | 12.54% | \u00a0 | \u00a0 | 168,500 | 8.75% |
Over the past two years, the following gains/(losses) were recognised in profit or loss and other comprehensive income with respect to interest rate swaps:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Gain (loss) recognised in profit or loss | 3,705 | 1,796 |
| Reclassified from other comprehensive income to profit or loss | - | - |
According to interest rate sensitivity analyses performed for the years ending 31 December 2022 and 2021, the impact on the consolidated statement of profit or loss (post-tax) due to upward or downward movements in the interest rates of 1% were as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Increase by 100 basis points (derivative financial instruments) | - | 1,796 |
| Decrease by 100 basis points (derivative financial instruments) | - | (1,778) |
| Increase by 100 basis points (non-derivative financial instruments) | (3,586) | (1,413) |
| Decrease by 100 basis points (non-derivative financial instruments) | 3,586 | 297 |
There was no impact on components of equity due to upward or downward movements in the interest rates.
The Group\u2019s receivables are carried at amortised cost. They are not subject to interest rate risk as defined in IFRS 7, since neither the carrying amount nor the future cash flows will fluctuate due to changes in market interest rates.
Management did not identify any other market risks that could have a significant impact on the Group.
Reference is made to note 6.5 Financial instruments for the accounting policy with respect to financial assets and liabilities, derivative financial instruments and fair value measurement.
Financial instruments by category comprise the following:
| Assets | 2022 | 2021 | ||
|---|---|---|---|---|
| \u00a0 | Derivatives at FVPL1 | Loans and receivables | Derivatives at FVPL1 | Loans and receivables |
| Loan receivable | - | 29 | - | 40 |
| Derivative financial instruments (current) | 2,045 | - | - | - |
| Trade and other receivables excluding prepayments | - | 35,646 | - | 9,417 |
| Cash and cash equivalents | - | 43,510 | - | 70,104 |
| Total | 2,045 | 79,185 | - | 79,561 |
| Liabilities | 2022 | 2021 | ||
|---|---|---|---|---|
| \u00a0 | Derivatives at FVPL1 | Other financial liabilities at amortised cost | Derivatives at FVPL1 | Other financial liabilities at amortised cost |
| Borrowings (excluding lease liabilities) | - | 737,111 | - | 617,956 |
| Lease liabilities | - | 1,481,539 | - | 1,305,159 |
| Derivative financial instruments | - | - | 1,660 | - |
| Trade and other payables excluding non-financial liabilities | - | 149,167 | - | 121,433 |
| Total | - | 2,367,817 | 1,660 | 2,044,548 |
The carrying amount of the above financial instruments under 'Assets' represents the maximum exposure to credit risk, with the exception of derivative financial instruments. The Group\u2019s maximum exposure related to financial derivative instruments is disclosed in the maturities table as part of the liquidity risk disclosure in note 6.4 Financial risk management.
See note 6.4 Financial risk management for a description of the credit quality of financial assets that are neither past due nor impaired.
Derivatives are classified as Level 2 valuation, in accordance with the fair value hierarchy as described in IFRS 13.
As at 31 December 2022, the Group had five (2021: five) derivative financial instruments measured at fair value. These interest rate swaps swap quarterly interest payments, where the Group pays a fixed interest and receives interest based on the three-month Euribor rate. The Group does not apply hedge accounting to these swaps.
| \u00a0 | Notional amount | Inception | Termination | Fixed interest | Carrying amount 2022 | Carrying amount 2021 |
|---|---|---|---|---|---|---|
| Interest rate swaps (five) | 205,000 | January 2019 | May 2023 | 0.131% | 2,045 | (1,660) |
| Total | 205,000 | \u00a0 | \u00a0 | \u00a0 | 2,045 | (1,660) |
The movements in 2022 and 2021 arising from cash flows and non-cash changes in the Group\u2018s derivative financial instruments are summarised in the following table:
| \u00a0 | \u00a0 | Cash flows | Other changes (non-cash) | \u00a0 | |
|---|---|---|---|---|---|
| \u00a0 | Balance as at 1 January1 | Repayments | Fair value changes through P&L2 | Fair value changes through OCI3 | Balance as at 31 December1 |
| 2022 | (1,660) | - | 3,705 | - | 2,045 |
| 2021 | (3,456) | - | 1,796 | - | (1,660) |
As at 31 December 2022 and 31 December 2021, the carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables, and short-term borrowings approximated their fair values due to the short-term maturities of these assets and liabilities.
As at 31 December 2022 and 31 December 2021, the fair values of other long-term financial assets (security deposits) were not materially different from the carrying amounts.
As at 31 December 2022, the fair values of the long-term borrowings (excluding lease liabilities) were not materially different from the carrying amounts. As at 31 December 2021, the fair values of the long-term borrowings (excluding lease liabilities) amounted to \u20ac274.5 million (carrying amount \u20ac279.1 million).
As at 31 December 2022, the fair values of the convertible bonds amounted to \u20ac224 million (carrying amount \u20ac247 million. As at 31 December 2021, the fair value of the convertible bonds was not materially different from the carrying amount.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Initial recognition and measurement
Financial assets are classified, at initial recognition, and subsequently measured at amortised cost and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset\u2019s contractual cash flow characteristics and the Group\u2019s business model for managing them. The Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component are measured at the transaction price determined under IFRS 15. Reference is made to the accounting policies in Note 3.2 Revenue.
For a financial asset to be classified and measured at amortised cost, it needs to give rise to cash flows that are \u2018solely payments of principal and interest (SPPI)\u2019 on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at instrument level. The Group\u2019s business model for managing financial assets refers to how it manages its financial assets to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require the delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset.
Subsequent measurement
For the purposes of subsequent measurement, financial assets are classified into two categories:
\u2022 Financial assets at amortised cost (debt instruments)
\u2022 Financial assets at fair value through profit or loss
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of the following conditions are met:
\u2022 The financial asset is held within a business model with the objective of holding financial assets to collect contractual cash flows
and
\u2022 The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding
Financial assets at amortised cost are subsequently measured using the effective interest rate method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
The Group\u2019s financial assets at amortised cost include trade receivables.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the statement of profit or loss.
Impairment of financial assets
Aside from this note, other disclosures relating to impairment of financial assets (trade receivables) are included in note 5.2 Trade and other receivables.
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
For trade receivables, the Group applies a simplified approach for the calculation of ECLs. The Group does not, therefore, track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
\u2022 The rights to receive cash flows from the asset have expired
or
\u2022 The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u2018pass-through\u2019 arrangement and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Group\u2019s financial liabilities include trade and other payables, loans and borrowings, including bank overdrafts and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below.
Financial liabilities at fair value through profit or loss
The Group has not designated any financial liabilities as at fair value through profit or loss.
Loans and borrowings
This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, as well as through the effective interest rate amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included as finance costs in the statement of profit or loss. This category generally applies to interest-bearing loans and borrowings.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. A voluntary forgiveness of a lease liability granted by the lessor without other changes to the lease as a (partial) derecognition of a lease liability is accounted for as a credit to profit or loss.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss. If the terms are not substantially different, the original liability is not derecognised and a modification gain or loss is determined based on the original effective interest rate. However, if the financing agreement has a prepayment option at par without significant penalty, the adjustment is treated as a modification with a prospective adjustment of the effective interest rate to reflect the new market rate and without recognising a gain or loss on modification.
Compound financial instruments issued by the Group comprise convertible bonds denominated in euro that can be converted to ordinary shares at the option of the holder, when the number of shares to be issued is fixed and does not vary with changes in fair value. The liability component of compound financial instruments is initially recognised at the fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognised at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest rate method. The equity component of a compound financial instrument is not remeasured. Interest related to the financial liability is recognised in profit or loss. On conversion at maturity, the financial liability is reclassified to equity and no gain or loss is recognised.
Initial recognition and subsequent measurement
The Group uses interest rate swaps as derivative financial instruments to hedge its interest rate risks. Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
The Group did not apply hedge accounting for the remaining financial instruments as at 31 December 2022. Therefore, all changes related to these financial instruments will be recognised in profit or loss.
The Group measures financial instruments such as derivatives at fair value at each reporting date.
Fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
\u2022 In the principal market for the asset or liability
or
\u2022 in the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 \u2014 Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 \u2014 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable Level 3 \u2014 Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For all years presented, the Group only held financial instruments that classify as Level 2 fair values. The Group did not hold any Level 1 or Level 3 financial instruments, nor were there any transfers between levels in the year under review. The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques that maximise the use of observable market data where it is available and rely as little as possible on entity-specific estimates. If all significant inputs required to assign a fair value to an instrument are observable, the instrument is included in Level 2. The fair value of the interest rate swaps is calculated as the present value of the estimated future cash flows, based on observable yield curves (discounted cash flow model).
Significant judgement is required in determining the expected credit loss allowance. For this purpose, any change in the risk profile of members following the COVID-19 pandemic should be considered.
The Group\u2019s objectives when managing capital are to safeguard the Group\u2019s ability to continue as a going concern, to provide returns for shareholders and benefits for other stakeholders.
In 2018, the Group closed a multicurrency term loan (\u20ac250 million) and revolving credit facilities agreement (\u20ac200 million). The agreement includes an additional \u20ac150-million accordion facility, of which \u20ac120 million is available to be drawn at the date of publication of these financial statements. Basic-Fit can request the syndicated banks to make the remaining \u20ac30 million available under the terms of the senior facility agreement, but that amount is not yet committed. In 2019, the Group completed a Schuldschein issuance with a German private placement. At 31 December 2022, an amount of \u20ac18.0 million was outstanding (2021: \u20ac83.5 million). In response to the impact of COVID-19, the Group entered into a \u20ac60-million GO-C facility agreement in May 2020.
In June 2021 Basic-Fit successfully raised \u20ac303.7 million through an offering of senior unsecured convertible bonds with a maturity of seven years.\u00a0
The Group monitors capital on the basis of its leverage ratio and its interest cover ratio. The leverage ratio is calculated as net debt divided by the consolidated adjusted EBITDA (as defined under the bank covenants). Net debt is calculated as total borrowings (excluding capitalised finance costs) less cash and cash equivalents. Consolidated adjusted EBITDA is calculated as underlying EBITDA plus permitted pro forma adjustments. The interest cover ratio is calculated as consolidated adjusted EBITDA divided by net finance costs. The calculation of these covenants is based on frozen GAAP and is therefore not influenced by the adoption of IFRS 16.
The net debt at 31 December 2022 and at 31 December 2021 was as follows (including and excluding lease liabilities related to right-of-use assets):
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Total borrowings (incl. capitalised finance costs) | 2,218,650 | 1,923,115 |
| Less: cash and cash equivalents | (43,510) | (70,104) |
| Net debt including lease liabilities | 2,175,140 | 1,853,011 |
| Lease liabilities1 | 1,481,516 | 1,305,064 |
| Net debt excluding lease liabilities | 693,624 | 547,947 |
The increase in net debt is directly related to the investments in new club openings and the financial impact of COVID-19 in 2021, as far as not compensated by the proceeds from the equity raise in April 2021.\u00a0
In 2021, Basic-Fit reached an agreement with its syndicate banks on an amendment of its covenant testing at 31 December 2021 and 30 June 2022. As a result, the leverage ratio and interest cover ratio as at 31 December 2021 was calculated based on adjusted EBITDA (as defined under the bank covenants) and interest as reported in the fourth quarter of 2021, multiplied by four. Furthermore, the leverage ratio and interest cover ratio as at 30 June 2022 was calculated based on adjusted EBITDA and interest as reported in the fourth quarter of 2021, multiplied by two plus adjusted EBITDA and interest as reported in the first six months of 2022.
Under the terms of the current facilities, the Group is required to comply at any relevant period with certain financial covenants as defined in the facilities agreement (until the expiration date of the agreement):
The leverage ratio should not be more than 3.50
The interest cover ratio should be more than 2.00
As at 31 December 2022, the Group complied with these covenants. The leverage ratio was 2.9 and the interest cover ratio was 11.7.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Finance income: | \u00a0 | \u00a0 |
| Other interest income | 2 | - |
| Total finance income | 2 | - |
| \u00a0 | \u00a0 | \u00a0 |
| Finance costs: | \u00a0 | \u00a0 |
| Interest on convertible bonds | (13,222) | (6,902) |
| Interest on external debt and borrowings | (15,384) | (16,916) |
| Lease liabilities interest | (32,573) | (32,922) |
| Valuation difference derivative financial instruments | 3,705 | 1,796 |
| Other finance costs (including waiver fees) | (1,161) | (1,811) |
| Total finance costs | (58,635) | (56,755) |
| \u00a0 | \u00a0 | \u00a0 |
| Total finance costs - net | (58,633) | (56,755) |
Reference is made to note 6.5 Financial instruments for the accounting policy related to financial assets and liabilities, derivative financial instruments and fair value measurement.
This section includes notes related to provisions, contingencies and commitments.
Provisions consist of:
expected outflows of resources (costs) related to potential legal and other risks;
expected costs associated with the restructuring of operations;
specific legal provisions in France related to retirement benefits ('IDR'); and
other expected outflows of resources (costs) as a result of past events
The movement in provisions over the past two years was as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| As at 1 January | 1,271 | 1,825 |
| Charged to profit or loss | 540 | 417 |
| New in consolidation1 | 166 | - |
| Utilised | (103) | (199) |
| Unused amounts reversed | (194) | (772) |
| As at 31 December | 1,680 | 1,271 |
| Of which: | \u00a0 | \u00a0 |
| Non-current portion of provisions (> 1 year) | 1,285 | 846 |
| Current portion of provisions (< 1 year) | 395 | 425 |
Management is of the opinion that the provision is adequate to resolve all the claims.
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated.
Restructuring provisions are recognised only when the Group has a constructive obligation, which is when:
(i) there is a detailed formal plan that identifies the business or part of the business concerned, the location and number of employees affected, the detailed estimate of the associated costs, and the timeline; and
(ii) the employees affected have been notified of the plan\u2019s main features.
Provisions are measured at the best estimate of the expenditure required to settle the obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the obligation, the carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
Provisions are not recognised for future operating losses. When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit or loss net of any reimbursement.
The cases and claims against the Group often raise difficult and complex factual and legal issues which are subject to many uncertainties and complexities, including but not limited to the facts and circumstances of each particular case and claim, the jurisdiction in which each suit is brought, and the differences in applicable law. In the normal course of business, management consults with legal counsel and certain other experts on matters related to such claims and litigation.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation, using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as an interest expense.
Significant capital expenditure contracted or planned, based on lease commitments for new clubs to be opened after balance date, before the end of the reporting period but not recognised as a liability, are as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Property, plant and equipment | 94,630 | 56,322 |
The Group entered into several lease agreements for which it uses the low-value or short-term exemption option of IFRS 16 and entered into several agreements that do not (or do not yet) meet the definition of a lease.
Future payment obligations under these agreements are as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Within one year | 10,842 | 5,782 |
| After one year but not more than five years | 111,547 | 54,884 |
| More than five years | 157,803 | 81,553 |
| Total | 280,192 | 142,219 |
These lease commitments include lease agreements for new clubs that are not effective yet and that can be dissolved on the basis of resolutive conditions, for example if the required permits are not obtained or if the builiding is not delivered by the lessor in the condition as agreed.
No discount factor is used in determining these commitments.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Future minimum lease payments expected to be received in relation to non-cancellable sub-leases of operating leases | 4,064 | 5,915 |
The Group does not have any contingent rentals or sub-lease expenses.
As at 31 December 2022, approximately \u20ac10.1 million in total had been issued in bank guarantees (31 December 2021: \u20ac9.1 million).
The Group is involved in a number of legal proceedings that have arisen in the ordinary course of business. Although it is not possible to predict the outcome of these disputes with reasonable certainty, management does not expect these pending or potential legal proceedings to have any materially negative impact on the Group's consolidated financial position or profitability. Accordingly, the Group has not recognised any legal provisions in these consolidated financial statements, if it is not probable that an outflow of economic resources will be required. However, the outcome of legal proceedings can be extremely difficult to predict, and the final outcome may be materially different from management's current expectations.
Basic-Fit N.V., Basic Fit International B.V., BF Developments and Basic Fit Nederland B.V. formed a fiscal unity for income tax at year-end 2022. For VAT purposes, the aforementioned companies and B-Securit\u00e9 B.V. formed a fiscal unity at year-end 2022. As a result, the companies within the fiscal unity are jointly and severally liable for each other's income tax and VAT debts.
HealthCity Belgi\u00eb N.V. formed a VAT unity with Basic-Fit Belgium BVBA at year-end 2022. As a result, the companies are jointly and severally liable for each other's VAT debts.
This section includes notes related to the remuneration of key management personnel and the Supervisory Board, related party transactions, auditor\u2019s remuneration and subsequent events.
Compensation of the Management Board members and other key management personnel was as follows:
| \u00a0 | Ren\u00e9 Moos (CEO) | Hans van der Aar (CFO) | Other key management personnel | Total | ||||
|---|---|---|---|---|---|---|---|---|
| \u00a0 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
| Base Salary | 729 | 729 | 601 | 562 | 703 | 500 | 2,033 | 1,791 |
| Pension allowance | 109 | 109 | 90 | 84 | 40 | 37 | 239 | 230 |
| Total fixed compensation | 838 | 838 | 691 | 646 | 743 | 537 | 2,272 | 2,021 |
| Short-term incentive | 182 | - | 198 | - | 232 | - | 612 | - |
| Long-term share-based payments | -22 | 47 | -10 | 27 | 21 | 64 | -11 | 138 |
| Total variable compensation | 160 | 47 | 188 | 27 | 253 | 64 | 601 | 138 |
| Social charges | 17 | 15 | 13 | 13 | 212 | 187 | 242 | 215 |
| Other | 32 | 36 | 43 | 45 | 44 | 37 | 119 | 118 |
| Total other benefits/expenses | 49 | 51 | 56 | 58 | 256 | 224 | 361 | 333 |
| Total remuneration | 1,047 | 936 | 935 | 731 | 1,252 | 825 | 3,234 | 2,492 |
In 2022, the annual base salaries for Ren\u00e9 Moos and Hans van der Aar amounted to \u20ac729,063 (2021: \u20ac729,063) and \u20ac601,209 (2021: \u20ac561,879) respectively.
The members of the Management Board do not participate in the Company\u2019s collective pension scheme but receive a comparable payment (pension allowance) set at a maximum of 15% of their base salary.
The remuneration reported as long-term share-based payments is based on costs incurred under IFRS (see note 3.5 Share-based payments).
The short-term incentive (STI) achievement for 2022 for the Management Board was approved by the Supervisory Board on 8 February 2023. This resulted in an STI pay-out for 2022 of 25% of the annual base salary for the CEO and 33% for the CFO. The STI amount will be paid in 2023 after the adoption of the Financial Statements for 2022. In reaction to the impact of the COVID-19 pandemic, no short-term incentive was granted to the Management Board and other key management personnel for 2021.
'Other key management personnel' pertains to employees with authority and responsibility for planning, directing and controlling the activities of the entity, either directly or indirectly (COO and CCO).
Details of the performance shares granted to the members of the Management Board as long-term share-based payments are as follows:
| Board member | Year of grant | Outstanding at 1 January 2022 | Number of shares granted on target 2022 | Performance adjustment / forfeited | Vested in 2022 | Outstanding at 31 December 2022 | Fair value at grant date | lock-up date |
|---|---|---|---|---|---|---|---|---|
| Ren\u00e9 Moos | 2018 | 14,050 | - | (4,683) | (9,367) | - | \u20ac27.00 | 15-6-2023 |
| \u00a0 | 2019 | 13,023 | - | (13,023) | - | - | \u20ac30.25 | 9-5-2024 |
| \u00a0 | 2020 | 28,535 | - | - | - | 28,535 | \u20ac15.33 | 13-5-2025 |
| \u00a0 | 2021 | 7,634 | - | - | - | 7,634 | \u20ac38.20 | 15-12-2026 |
| \u00a0 | 2022 | - | 11,634 | - | - | 11,634 | \u20ac37.60 | 16-5-2027 |
| Total shares | \u00a0 | 63,242 | 11,634 | (17,706) | (9,367) | 47,803 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Hans van der Aar | 2018 | 10,828 | - | (3,609) | (7,219) | - | \u20ac27.00 | 15-6-2023 |
| \u00a0 | 2019 | 8,364 | - | (8,364) | - | - | \u20ac30.25 | 9-5-2024 |
| \u00a0 | 2020 | 18,326 | - | - | - | 18,326 | \u20ac15.33 | 13-5-2025 |
| \u00a0 | 2021 | 4,903 | - | - | - | 4,903 | \u20ac38.20 | 15-12-2026 |
| \u00a0 | 2022 | - | 7,995 | - | - | 7,995 | \u20ac37.60 | 16-5-2027 |
| Total shares | \u00a0 | 42,421 | 7,995 | (11,973) | (7,219) | 31,224 | \u00a0 | \u00a0 |
All awards under the share plans will vest on the condition that the Management Board members are still employed at Basic-Fit. The awards can increase by up to 25% in the event of outperformance.
The awards for 2020 were granted under the specific reservation that the award and its vesting could be subject to limitations if government requirements related to, for example, government grants require the Company to apply these limitations and it is essential and necessary or mandatory for the Company to apply for these government grants. As a consequence, the years 2020 and 2021 will be disregarded for the calculation and the maximum number of shares that is expected to vest in 2023 is limited to 33.33% of the achieved performance range for that year.
As at 31 December 2022, the members of the Management Board did not have any loans outstanding with Basic-Fit.
The total remuneration for Supervisory Board members was \u20ac307 thousand in 2022 (2021: \u20ac341 thousand).
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Kees van der Graaf | 65 | 65 |
| Hans Willemse | 58 | 58 |
| Carin Gorter | 60 | 60 |
| Pieter de Jong | 13 | 50 |
| Herman Rutgers | 55 | 55 |
| Rob van der Heijden | 56 | 53 |
| Total | 307 | 341 |
None of the Supervisory Board members have been granted, nor do they possess, any Basic-Fit options or shares, with the exception of Kees van der Graaf, who personally held 3,275 shares, Herman Rutgers who held 3,000 shares and Hans Willemse who held 40,029 shares in Basic-Fit on 31 December 2022.
All legal entities that can be controlled, jointly controlled or significantly influenced are considered related parties. Entities that can control the Company or other subsidiaries of the Group are also considered related parties. In addition, statutory and supervisory directors and close relatives are regarded as related parties.
The following transactions were carried out with related parties:
Management Board and Supervisory Board compensation;
Purchases from/sales to related parties (mainly leases from related parties); and
Acquisition of fitness clubs (in 2022).
All transactions with related parties are made at terms equivalent to those that prevail in arm\u2019s length transactions.\u00a0
Management Board compensation
Management board compensation is disclosed in note 8.1 Remunerations of key management personnel and note 8.2 Remunerations of members of the Supervisory Board.
Purchases from/sales to related parties
The table below provides the total amount of purchases from and sales for the relevant financial year to entities in which Management Board members have an interest. In addition, the table provides an overview of all balances held with these related parties.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Sales to related parties | 48 | 21 |
| Purchases from related parties | 6,408 | 5,537 |
| Amounts owed by related parties1 | 38 | - |
| Amounts owed to related parties2 | 695 | 399 |
Outstanding balances at the year-end are unsecured, interest-free and settled in cash. No guarantees have been provided or received for any related party receivables or payables.
Acquisition of fitness clubs
In 2022, Basic-Fit acquired three fitness clubs from a company related to the CEO of Basic-Fit N.V. for a total amount of \u20ac4.1 million.
Future related party lease obligations (as accounted for as right-of-use assets and lease liabilities) are as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Within one year | 6,072 | 6,046 |
| After one year but not more than five years | 24,148 | 24,185 |
| More than five years | 35,094 | 40,973 |
| Total | 65,314 | 71,204 |
The amounts disclosed relate to the amounts to be invoiced by related parties.
The following table sets out the aggregate fees incurred during the years for professional audit services and other services provided to the Group by Ernst & Young Accountants LLP and their network inside and outside the Netherlands, as referred to in Section 1(1) of the Dutch Audit Firms Supervision Act (Dutch: Wta, Wet toezicht accountantsorganisaties):
| \u00a0 | EY Accountants LLP | Other EY member firms and affiliates | Total network | |||
|---|---|---|---|---|---|---|
| \u00a0 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
| Audit of the financial statements | 842 | 848 | 116 | 113 | 958 | 961 |
| Other audit procedures | 98 | 63 | 2 | 15 | 100 | 78 |
| Total | 940 | 911 | 118 | 128 | 1,058 | 1,039 |
No subsequent events occurred that are significant to the Group that would require adjustment or disclosure in the annual accounts now presented. Subsequent events were evaluated up to 13 March 2023, which is the date the financial statements included in this annual report were approved.
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With 1,200 clubs and 3,350,000 memberships as at 31 December 2022, Basic-Fit is the largest fitness chain in Europe. Basic-Fit aims to provide affordable, innovative and high-quality fitness that is available to everyone, anytime, anywhere and in their own way.The Group's consolidated financial statements for the year ended 31 December 2022 were authorised for issue in accordance with a resolution of the Management Board on 13 March 2023. The consolidated financial statements are presented in euros and all values are rounded to the nearest thousand (\u20ac\u00a0x 1,000), except when otherwise indicated. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-2": { "value": "N.V.", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-3": { "value": "the Netherlands", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-4": { "value": "Wegalaan 60, Hoofddorp, the Netherlands", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-1": { "value": "the Netherlands", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-5": { "value": "the Netherlands, Belgium, Luxembourg, France, Spain and Germany", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-6": { "value": "With 1,200 clubs and 3,350,000 memberships as at 31 December 2022, Basic-Fit is the largest fitness chain in Europe. Basic-Fit aims to provide affordable, innovative and high-quality fitness that is available to everyone, anytime, anywhere and in their own way.", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-308": { "value": "The Group's consolidated financial statements for the year ended 31 December 2022 were authorised for issue in accordance with a resolution of the Management Board on 13 March 2023. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-309": { "value": " 1.2 Group information These consolidated financial statements reflect all of the assets, liabilities, revenue, expenses and cash flows of the Group. The Group consists of the following legal entities: Basic-Fit N.V., Hoofddorp (the Netherlands) Basic Fit International B.V., Hoofddorp (the Netherlands) (100% interest of Basic-Fit N.V.) Basic Fit Nederland B.V., Hoofddorp (the Netherlands) (100% interest of Basic Fit International B.V.) Basic-Fit Belgium B.V., Jette (Belgium) (99.6% interest of Basic Fit International B.V. and 0.4% of Basic Fit Nederland B.V.) HealthCity Belgi\u00eb N.V., Jette (Belgium) (100% interest of Basic-Fit Belgium B.V.) Basic-Fit Luxembourg S.A., Sandweiler (Luxembourg) (100% interest of Basic Fit International B.V.) \u00adBasic Fit France S.A., Paris (France) (100% interest of Basic Fit International B.V.) Basic Fit II S.A., Paris (France) (100% interest of Basic Fit France S.A.) Basic-Fit Spain S.A., Madrid (Spain) (100% interest of Basic Fit International B.V.) Basic-Fit Germany GmbH, D\u00fcsseldorf (Germany) (100% interest of Basic Fit International B.V.) BF Developments B.V., Hoofddorp (the Netherlands) (100% interest of Basic Fit International B.V.) B-Securit\u00e9 B.V., Hoofddorp (the Netherlands) (51% interest of BF Developments B.V.) Basic Fit International B.V. is an intermediate holding company and operates as international headquarters of the Group. Basic Fit France S.A. and BF Developments B.V. are intermediate holding companies and do not run fitness clubs or undertake other operations. B-Securit\u00e9 B.V. is involved in the remote surveillance of a number of the fitness clubs that are operated by the Group. In March 2022, Basic-Fit International B.V. acquired1 100% of HealthCity Germany GmbH, subsequently renamed to Basic-Fit Germany GmbH. Note 4.5 Business combinations ", "dimensions": { "concept": "ifrs-full:DisclosureOfCompositionOfGroupExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-310": { "value": " 1.2 Group information These consolidated financial statements reflect all of the assets, liabilities, revenue, expenses and cash flows of the Group. The Group consists of the following legal entities: Basic-Fit N.V., Hoofddorp (the Netherlands) Basic Fit International B.V., Hoofddorp (the Netherlands) (100% interest of Basic-Fit N.V.) Basic Fit Nederland B.V., Hoofddorp (the Netherlands) (100% interest of Basic Fit International B.V.) Basic-Fit Belgium B.V., Jette (Belgium) (99.6% interest of Basic Fit International B.V. and 0.4% of Basic Fit Nederland B.V.) HealthCity Belgi\u00eb N.V., Jette (Belgium) (100% interest of Basic-Fit Belgium B.V.) Basic-Fit Luxembourg S.A., Sandweiler (Luxembourg) (100% interest of Basic Fit International B.V.) \u00adBasic Fit France S.A., Paris (France) (100% interest of Basic Fit International B.V.) Basic Fit II S.A., Paris (France) (100% interest of Basic Fit France S.A.) Basic-Fit Spain S.A., Madrid (Spain) (100% interest of Basic Fit International B.V.) Basic-Fit Germany GmbH, D\u00fcsseldorf (Germany) (100% interest of Basic Fit International B.V.) BF Developments B.V., Hoofddorp (the Netherlands) (100% interest of Basic Fit International B.V.) B-Securit\u00e9 B.V., Hoofddorp (the Netherlands) (51% interest of BF Developments B.V.) Basic Fit International B.V. is an intermediate holding company and operates as international headquarters of the Group. Basic Fit France S.A. and BF Developments B.V. are intermediate holding companies and do not run fitness clubs or undertake other operations. B-Securit\u00e9 B.V. is involved in the remote surveillance of a number of the fitness clubs that are operated by the Group. In March 2022, Basic-Fit International B.V. acquired1 100% of HealthCity Germany GmbH, subsequently renamed to Basic-Fit Germany GmbH. Note 4.5 Business combinations ", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-311": { "value": " 1.2 Group information These consolidated financial statements reflect all of the assets, liabilities, revenue, expenses and cash flows of the Group. The Group consists of the following legal entities: Basic-Fit N.V., Hoofddorp (the Netherlands) Basic Fit International B.V., Hoofddorp (the Netherlands) (100% interest of Basic-Fit N.V.) Basic Fit Nederland B.V., Hoofddorp (the Netherlands) (100% interest of Basic Fit International B.V.) Basic-Fit Belgium B.V., Jette (Belgium) (99.6% interest of Basic Fit International B.V. and 0.4% of Basic Fit Nederland B.V.) HealthCity Belgi\u00eb N.V., Jette (Belgium) (100% interest of Basic-Fit Belgium B.V.) Basic-Fit Luxembourg S.A., Sandweiler (Luxembourg) (100% interest of Basic Fit International B.V.) \u00adBasic Fit France S.A., Paris (France) (100% interest of Basic Fit International B.V.) Basic Fit II S.A., Paris (France) (100% interest of Basic Fit France S.A.) Basic-Fit Spain S.A., Madrid (Spain) (100% interest of Basic Fit International B.V.) Basic-Fit Germany GmbH, D\u00fcsseldorf (Germany) (100% interest of Basic Fit International B.V.) BF Developments B.V., Hoofddorp (the Netherlands) (100% interest of Basic Fit International B.V.) B-Securit\u00e9 B.V., Hoofddorp (the Netherlands) (51% interest of BF Developments B.V.) Basic Fit International B.V. is an intermediate holding company and operates as international headquarters of the Group. Basic Fit France S.A. and BF Developments B.V. are intermediate holding companies and do not run fitness clubs or undertake other operations. B-Securit\u00e9 B.V. is involved in the remote surveillance of a number of the fitness clubs that are operated by the Group. In March 2022, Basic-Fit International B.V. acquired1 100% of HealthCity Germany GmbH, subsequently renamed to Basic-Fit Germany GmbH. Note 4.5 Business combinations ", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-312": { "value": " 2.1 Impact of COVID-19 and economic circumstances plus update on going concern In 2022, the Group increased its network by 185 clubs to 1,200 clubs. At the end of 2022, Basic-Fit had a record number of 3.35 million memberships, compared with 2.22 million at 31 December 2021 (at a time that Basic-Fit was still negatively impacted by COVID-19 related restrictions in 2020 and 2021). Furthermore, in 2022 the average number of members per mature club increased by 26% and reached pre-COVID-19 levels. This means that the mature clubs have fully recovered from two years defined by the pandemic. In 2020 and 2021, in direct response to the COVID-19 pandemic, several restrictions were implemented, such as temporary closings, a limitation on the number of members in a club and the obligation to wear a facemask. Members also had to reserve a timeslot to do their workout and at some point had to show a health pass to enter the clubs. In April 2022, the last government restrictions were lifted and members were once again free to enter all clubs without limitations, which resulted in a strong increase of memberships during the rest of 2022. In 2021, Basic-Fit came to an agreement with its syndicate banks for an amendment of its covenant testing. As a result, the leverage ratio and interest cover ratio at 30 June 2022 were calculated based on adjusted EBITDA and interest as reported in the fourth quarter of 2021, multiplied by two plus adjusted EBITDA and interest as reported in the first six months of 2022. As of 31 December 2022, ratios are calculated based on the original terms in the facility agreement. Together with the liquidity injections made in 2020 and 2021, which strengthened Basic-Fit\u2019s financial position, this helped Basic-Fit with the execution of its accelerated growth strategy. Basic-Fit believes it has shown that it has the ability to respond to adversity in a pragmatic way, still managing to open 185 clubs in 2022 and increasing memberships to 3.35 million. In 2022, the Management Board prepared several forecast scenarios to estimate the impact of COVID-19 and economic circumstances on liquidity and covenant ratios in 2022 and through to 2024. As at 31 December 2022, the Group complied with its covenant ratios and, according to the aforementioned scenarios, the Management Board expects to comply with the covenant ratios in 2023 and 2024. The leverage ratio as at 31 December 2022 was 2.9 and the interest cover ratio was 11.7. In preparing these Financial Statements, the Management Board considered the potential impact of climate change. Many of the effects arising from climate change will be longer term in nature, with an inherent level of uncertainty. In the long-term, Basic-Fit will replace all natural gas heating systems with more efficient electric systems in those clubs that are not yet natural gas free and Basic-Fit will install solar panels on its headquarters and clubs when possible. The impact for these financial statements is considered limited. Based on the available liquidity on the date of publication of these financial statements, the Management Board expects to have suffficient liquidity in all scenarios and that Basic-Fit will meet its liabilities as they fall due in the next twelve months after the publication of these financial statements. Therefore, the Management Board continues to prepare these financial statements on a going concern basis and concludes that the situation does not involve material uncertainties that may cast significant doubt about the Group's ability to continue as a going concern. War in ukraine and economic uncertainties The war in Ukraine has impacted economies on a global scale. The effects are wide ranging, including amongst others, rising inflation, the energy crisis in Europe, pressure on supply chains and increased interest rates in most parts of the world. Basic-Fit has considered to what extent rising energy bills, supply chain constraints, economic sanctions on Russia and significant inflation impacts business operations. Based on this, the group has concluded that the impact on the performance of the business is not material for the 2022 financial period. Utility unit costs remained nearly flat in 2022 thanks to fixed price contracts and there were no significant supply chain constraints. Furthermore, Basic-Fit did not notice a negative impact on revenues. In direct response to the rising inflation (including energy prices), Basic-Fit introduced an energy taskforce, to reduce energy consumption in the coming years and the continuous focus on cost and capex control has been further intensified. Basic-Fit has fixed prices for 75% of the expected energy consumption in 2023. The goal is to reduce the energy consumption per club on average by 20% in the course of 2023 compared to the average energy consumption in 2022. Basic-Fit managed to keep the average initial capex for new clubs in 2022 below \u20ac1.2 million and average maintenance capex at \u20ac55 thousand per club, which is in line with the amounts in previous years. The increasing interest costs were partly compensated by interest rate swaps as disclosed in note 6.4 Financial risk management, note 6.5 Financial instruments and note 6.7 Finance income and costs. The Company also assessed the implications of rising interest rates on the valuation of assets and liabilities (including goodwill). This assessment resulted in an increase in the discount rate used in the goodwill impairment testing as disclosed in note 4.1 Goodwill and an increase in the incemental borrowing rate as used to measure lease liabilities as disclosed in note 4.4 Right-of-use assets and lease liabilities. Due to the unpredictable nature of this risk, Basic-Fit actively monitors the economic developments. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-313": { "value": " 2.2 Basis of preparation The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and with Part 9 of Book 2 of the Dutch Civil Code. The consolidated financial statements have been prepared on the historical cost basis, except for the financial assets and liabilities (including derivative instruments), which are measured at fair value. The consolidated financial statements are presented in euros and all values are rounded to the nearest thousand (\u20ac\u00a0x 1,000), except when otherwise indicated. The preparation of consolidated financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group\u2019s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed below under \u2018Significant accounting judgements, estimates and assumptions\u2019. The consolidated financial statements provide comparative information in respect of the previous period. In addition, the Group presents an additional statement of financial position at the beginning of the preceding period when there is a retrospective application of an accounting policy, a retrospective restatement, or a reclassification of items in financial statements. This situation is not applicable to these financial statements. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-314": { "value": "The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and with Part 9 of Book 2 of the Dutch Civil Code. The consolidated financial statements have been prepared on the historical cost basis, except for the financial assets and liabilities (including derivative instruments), which are measured at fair value. ", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-316": { "value": " Significant accounting judgements, estimates and assumptions The preparation of the Group\u2019s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities (and the accompanying disclosures), and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. In the process of applying the Group\u2019s accounting policies, management has made various judgements. Those judgements that management has assessed to have the most significant impact on the amounts recognised in the consolidated financial statements are discussed in the individual notes to the related financial statement line items or below. The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are also described in the individual notes to the related financial statement line items below. The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. However, existing circumstances and assumptions about future developments may change due to market changes or circumstances that are beyond the Group's control. Such changes are reflected in the assumptions when they occur. The table below presents the areas that involve a higher degree of judgement or areas where assumptions and estimates are significant to the financial statements: \u00a0Note Revenue recognition 3.2 Deferred tax assets 3.9 Impairment testing of goodwill 4.1 Impairment testing of non-current assets 4.2 Useful lives 4.2 Determining the lease term of contracts with renewal and termination options 4.4 Leases - estimating the incremental borrowing rate 4.4 Provision for expected credit losses 5.2/6.5 In the process of applying the Group\u2019s accounting policies, management made the following judgements that have a significant impact on the amounts recognised in the consolidated financial statements (apart from those involving estimations, which are described above): Recognition of provisions The Group is subject to a number of factors that could lead to an outflow of economic benefits. When assessing whether such factors require either provision or disclosure, management is required to consider, among other factors, whether a legal or constructive obligation exists at the reporting date and whether the resulting risk of an outflow of economic benefits is probable (requiring a provision), less than probable but more than remote (requiring disclosure), or remote (requiring neither provision nor disclosure). Decommissioning liabilities For certain fitness club locations, the Group has a contractual obligation to restore locations to an agreed upon state. The Group has not recorded a decommissioning liability for such obligations. Management judges that, based on historical experience, the likelihood that the Group will be required to restore a location to its original state is remote. Fitness club locations are often renovated to a better state than their original state and, moreover, the duration of a lease contract is usually longer than 10 years. Consequently, lessors have made very few requests for the restoration of locations over the years when leases have been terminated. The Group has therefore not recognised any decommissioning liabilities. Significant estimates Significant revenue recognition estimates relate to the identification of performance obligations and the revenue allocation as a result of the performance obligations identified. Furthermore, these estimates relate to the value that is allocated to the use of the online platform for the period that memberships were frozen (and not charged) and the accounting treatment of those members who had not explicitly chosen a compensation option.\u00a0Significant estimates The Group is subject to income taxes in the Netherlands and a number of other jurisdictions. Judgement is required to determine current tax expenses, uncertain tax positions, deferred tax assets and deferred tax liabilities, plus the extent to which deferred tax assets can be recognised. Estimates are based on forecast future taxable income and tax planning strategies. The utilisation of deferred tax assets is dependent on future taxable profit in excess of the profit arising from the reversal of existing taxable temporary differences. The recognition of deferred tax assets is based on the assessment of whether it is more likely than not that sufficient taxable profit will be available in the future to utilise the reversal of temporary differences and tax losses. Recognition of deferred tax assets involves judgement regarding the future financial performance of the particular legal entity or tax group that has recognised the deferred tax asset. Significant estimates Calculation of the recoverable amount The recoverable amount as at 31 December 2021 and 2022 was determined based on fair value less cost of disposal calculations, based on a market participant's perspective, using cash flow projections based on the financial forecast, covering a five-year period. These cash flow projections include both existing clubs and new club openings. Discount rates used are post-tax and reflect specific risks relating to the relevant operating segments and market uncertainties in general. Management considered the effects of applying a pre-tax approach and concluded that this will not materially change the outcome of the impairment test. The post-tax discount rates applied to the cash flow projections are shown in the table below. Cash flows beyond the five-year period are extrapolated using a terminal growth rate of 2.0% (2021: 0.5%) for all CGUs, which is the lowest of the current risk free rate and the long term inflation expectation. Post-tax WACC discount rate \u00a0Netherlands Belgium Luxembourg France Spain Germany 2022 10.2% 10.9% 10.2% 10.8% 12.1% 10.2% 2021 7.1% 7.6% 7.1% 7.5% 8.3% - Pre-tax WACC discount rate \u00a0Netherlands Belgium Luxembourg France Spain Germany 2022 12.7% 13.7% 13.0% 13.0% 15.1% 12.2% 2021 9.1% 9.5% 9.3% 9.2% 10.0% - Risks in relation to climate-related matters have been considered in determining the values of the key assumptions, but did not materially impact the measurement of the recoverable amount. Key assumptions used The input to the Group\u2019s key assumptions includes those that are based on non-observable market data (level 3 input in accordance with IFRS 13). The calculations of fair value less cost of disposal for the CGUs are most sensitive to the following assumptions: \u2022 Terminal growth rate; \u2022 Discount rates; \u2022 Revenue growth; and \u2022 EBITDA margin improvement. Terminal growth rate \u2013 The terminal growth rate is based on market development and industry expectations. Discount rates \u2013 The post-tax rates used to discount the projected cash flows reflect specific risks relating to relevant CGUs, based on market data in which both the cost of equity and cost of debt are derived on the basis of a peer group of companies operating in the same industry as Basic-Fit. Revenue growth \u2013 The growth rates are based on historical experience of membership developments taking into consideration the maturity of existing clubs. In addition, differences in revenue growth per CGU depend on the number of clubs we expect to open per country. The 'growth scenario' assumes a compound annual growth rate of revenues over the forecast budget period 2023-2027 of 9% (2021: 13%) for the Netherlands, 11% (2021: 15%) for Belgium, 4% (2021: 9%) for Luxembourg, 18% (2021: 27%) for France, 40% (2021: 58%) for Spain and 159% for Germany. In the 'consolidation scenario', the average annual growth rate of revenues for all CGUs is 4.9% (2021: 8.5%). After the forecast period, revenues are expected to increase by 2.0% annually in both scenarios. EBITDA margin improvement \u2013 The cash flow projections assume long term EBITDA margins in line with those already realised in the currently mature clubs (before the impact of COVID-19), with an increase as a result of synergies on overhead and marketing in the 'growth scenario' and an increase in revenue per member. Significant estimates Impairment testing The Group determines whether other intangibles assets, as well as property, plant and equipment and right-of-use assets are impaired whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. This requires an estimation of the recoverable amount of the relevant CGU. The recoverable amount is the higher of fair value less costs of disposal and value in use. For the purpose of impairment testing, assets are grouped at the lowest levels for which there are separately identifiable cash flows, known as CGUs.\u00a0Impairment testing is an area involving management judgement, requiring assessment as to whether the carrying amount of assets can be supported by the net present value of future cash flows derived from such assets, using cash flow projections that have been discounted at an appropriate rate. In calculating the net present value of the future cash flows, certain assumptions need to be made in respect of highly uncertain matters. Furthermore, for impairment testing, reference is made to note 4.1 Goodwill. No impairment charge has been recorded for other intangible assets in either period presented. Useful lives The useful lives and residual values of the Group\u2019s assets are determined by management at the time the asset is acquired and reviewed annually for appropriateness. Estimated useful economic lives of property, plant and equipment, and intangibles are based on management's judgement and experience. The depreciation or amortisation charge is adjusted prospectively when management ascertains that the actual useful life differs materially from the estimates used to calculate depreciation and amortisation. Due to the significance of capital investment, variations between actual and estimated useful lives could impact operating results both positively and negatively. The useful life used to amortise intangible assets relates to the expected future performance of the assets acquired and management's judgement for the period over which economic benefit will be derived from the asset. Changes in useful lives and residual values did not result in any material changes to the Group\u2019s deprecation or amortisation charge in the years reported. Determination whether configuration and customisation services are distinct from SaaS access Costs incurred to configure or customise the cloud provider\u2019s application software are recognised as operating expenses when the services are received. In a contract under which the cloud provider provides both the SaaS configuration and customisation, and the SaaS access over the contract term, the directors applied judgement to determine whether these services are distinct from each other or not, and therefore, whether the configuration and customisation costs incurred are expensed as the software is configured or customised (i.e. upfront), or over the SaaS contract term. Specifically, where the configuration and customisation activities significantly modify or customise the cloud software, these activities are not distinct from the access to the cloud software over the contract term. Judgement has been applied in determining whether the degree of customisation and modification of the cloud-based software is significant. At 31 December 2022, the Group recognised no prepayments (2021: \u20ac249 thousand) in respect of customisation and configuration activities undertaken in implementing SaaS arrangements that are considered not to be distinct from the access to the SaaS access over the contract term. Significant estimates Significant judgement in determining the lease term of contracts with renewal and termination options The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain that this will be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain that this will not be exercised. The Group applies judgement in evaluating whether it is reasonably certain it will or will not exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or the termination. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation of the leased asset). Leases - estimating the incremental borrowing rate The Group cannot readily determine the interest rate implicit in the lease, so it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group \u2018would have to pay\u2019, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease. The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary\u2019s stand-alone credit rating). Basic-Fit\u2019s IBRs are built up of the following components: \u2022 Base rate: risk-free rate \u2022 Country risk premium: premium for the higher risk associated with the country where the lease is situated \u2022 Credit rating (unsecured): premium based on Basic-Fit's credit rating per country \u2022 Lease-specific adjustment: adjustment to the (unsecured) credit rating to reflect the secured borrowing position related to the lease Basic-Fit determines the IBR per country, taking into account the term of the lease based on three ageing buckets (up to 10 years, 10-20 years and more than 20 years). The IBRs range from 1.3% to 5.4% in 2022 (2021: 0.4% to 2.7%). Significant estimates Significant judgement is required in determining the expected credit loss allowance. For this purpose, any change in the risk profile of members following the COVID-19 pandemic should be considered. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-317": { "value": " Significant accounting judgements, estimates and assumptions The preparation of the Group\u2019s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities (and the accompanying disclosures), and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. In the process of applying the Group\u2019s accounting policies, management has made various judgements. Those judgements that management has assessed to have the most significant impact on the amounts recognised in the consolidated financial statements are discussed in the individual notes to the related financial statement line items or below. The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are also described in the individual notes to the related financial statement line items below. The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. However, existing circumstances and assumptions about future developments may change due to market changes or circumstances that are beyond the Group's control. Such changes are reflected in the assumptions when they occur. The table below presents the areas that involve a higher degree of judgement or areas where assumptions and estimates are significant to the financial statements: \u00a0Note Revenue recognition 3.2 Deferred tax assets 3.9 Impairment testing of goodwill 4.1 Impairment testing of non-current assets 4.2 Useful lives 4.2 Determining the lease term of contracts with renewal and termination options 4.4 Leases - estimating the incremental borrowing rate 4.4 Provision for expected credit losses 5.2/6.5 In the process of applying the Group\u2019s accounting policies, management made the following judgements that have a significant impact on the amounts recognised in the consolidated financial statements (apart from those involving estimations, which are described above): Recognition of provisions The Group is subject to a number of factors that could lead to an outflow of economic benefits. When assessing whether such factors require either provision or disclosure, management is required to consider, among other factors, whether a legal or constructive obligation exists at the reporting date and whether the resulting risk of an outflow of economic benefits is probable (requiring a provision), less than probable but more than remote (requiring disclosure), or remote (requiring neither provision nor disclosure). Decommissioning liabilities For certain fitness club locations, the Group has a contractual obligation to restore locations to an agreed upon state. The Group has not recorded a decommissioning liability for such obligations. Management judges that, based on historical experience, the likelihood that the Group will be required to restore a location to its original state is remote. Fitness club locations are often renovated to a better state than their original state and, moreover, the duration of a lease contract is usually longer than 10 years. Consequently, lessors have made very few requests for the restoration of locations over the years when leases have been terminated. The Group has therefore not recognised any decommissioning liabilities. Significant estimates Significant revenue recognition estimates relate to the identification of performance obligations and the revenue allocation as a result of the performance obligations identified. Furthermore, these estimates relate to the value that is allocated to the use of the online platform for the period that memberships were frozen (and not charged) and the accounting treatment of those members who had not explicitly chosen a compensation option.\u00a0Significant estimates The Group is subject to income taxes in the Netherlands and a number of other jurisdictions. Judgement is required to determine current tax expenses, uncertain tax positions, deferred tax assets and deferred tax liabilities, plus the extent to which deferred tax assets can be recognised. Estimates are based on forecast future taxable income and tax planning strategies. The utilisation of deferred tax assets is dependent on future taxable profit in excess of the profit arising from the reversal of existing taxable temporary differences. The recognition of deferred tax assets is based on the assessment of whether it is more likely than not that sufficient taxable profit will be available in the future to utilise the reversal of temporary differences and tax losses. Recognition of deferred tax assets involves judgement regarding the future financial performance of the particular legal entity or tax group that has recognised the deferred tax asset. Significant estimates Calculation of the recoverable amount The recoverable amount as at 31 December 2021 and 2022 was determined based on fair value less cost of disposal calculations, based on a market participant's perspective, using cash flow projections based on the financial forecast, covering a five-year period. These cash flow projections include both existing clubs and new club openings. Discount rates used are post-tax and reflect specific risks relating to the relevant operating segments and market uncertainties in general. Management considered the effects of applying a pre-tax approach and concluded that this will not materially change the outcome of the impairment test. The post-tax discount rates applied to the cash flow projections are shown in the table below. Cash flows beyond the five-year period are extrapolated using a terminal growth rate of 2.0% (2021: 0.5%) for all CGUs, which is the lowest of the current risk free rate and the long term inflation expectation. Post-tax WACC discount rate \u00a0Netherlands Belgium Luxembourg France Spain Germany 2022 10.2% 10.9% 10.2% 10.8% 12.1% 10.2% 2021 7.1% 7.6% 7.1% 7.5% 8.3% - Pre-tax WACC discount rate \u00a0Netherlands Belgium Luxembourg France Spain Germany 2022 12.7% 13.7% 13.0% 13.0% 15.1% 12.2% 2021 9.1% 9.5% 9.3% 9.2% 10.0% - Risks in relation to climate-related matters have been considered in determining the values of the key assumptions, but did not materially impact the measurement of the recoverable amount. Key assumptions used The input to the Group\u2019s key assumptions includes those that are based on non-observable market data (level 3 input in accordance with IFRS 13). The calculations of fair value less cost of disposal for the CGUs are most sensitive to the following assumptions: \u2022 Terminal growth rate; \u2022 Discount rates; \u2022 Revenue growth; and \u2022 EBITDA margin improvement. Terminal growth rate \u2013 The terminal growth rate is based on market development and industry expectations. Discount rates \u2013 The post-tax rates used to discount the projected cash flows reflect specific risks relating to relevant CGUs, based on market data in which both the cost of equity and cost of debt are derived on the basis of a peer group of companies operating in the same industry as Basic-Fit. Revenue growth \u2013 The growth rates are based on historical experience of membership developments taking into consideration the maturity of existing clubs. In addition, differences in revenue growth per CGU depend on the number of clubs we expect to open per country. The 'growth scenario' assumes a compound annual growth rate of revenues over the forecast budget period 2023-2027 of 9% (2021: 13%) for the Netherlands, 11% (2021: 15%) for Belgium, 4% (2021: 9%) for Luxembourg, 18% (2021: 27%) for France, 40% (2021: 58%) for Spain and 159% for Germany. In the 'consolidation scenario', the average annual growth rate of revenues for all CGUs is 4.9% (2021: 8.5%). After the forecast period, revenues are expected to increase by 2.0% annually in both scenarios. EBITDA margin improvement \u2013 The cash flow projections assume long term EBITDA margins in line with those already realised in the currently mature clubs (before the impact of COVID-19), with an increase as a result of synergies on overhead and marketing in the 'growth scenario' and an increase in revenue per member. Significant estimates Impairment testing The Group determines whether other intangibles assets, as well as property, plant and equipment and right-of-use assets are impaired whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. This requires an estimation of the recoverable amount of the relevant CGU. The recoverable amount is the higher of fair value less costs of disposal and value in use. For the purpose of impairment testing, assets are grouped at the lowest levels for which there are separately identifiable cash flows, known as CGUs.\u00a0Impairment testing is an area involving management judgement, requiring assessment as to whether the carrying amount of assets can be supported by the net present value of future cash flows derived from such assets, using cash flow projections that have been discounted at an appropriate rate. In calculating the net present value of the future cash flows, certain assumptions need to be made in respect of highly uncertain matters. Furthermore, for impairment testing, reference is made to note 4.1 Goodwill. No impairment charge has been recorded for other intangible assets in either period presented. Useful lives The useful lives and residual values of the Group\u2019s assets are determined by management at the time the asset is acquired and reviewed annually for appropriateness. Estimated useful economic lives of property, plant and equipment, and intangibles are based on management's judgement and experience. The depreciation or amortisation charge is adjusted prospectively when management ascertains that the actual useful life differs materially from the estimates used to calculate depreciation and amortisation. Due to the significance of capital investment, variations between actual and estimated useful lives could impact operating results both positively and negatively. The useful life used to amortise intangible assets relates to the expected future performance of the assets acquired and management's judgement for the period over which economic benefit will be derived from the asset. Changes in useful lives and residual values did not result in any material changes to the Group\u2019s deprecation or amortisation charge in the years reported. Determination whether configuration and customisation services are distinct from SaaS access Costs incurred to configure or customise the cloud provider\u2019s application software are recognised as operating expenses when the services are received. In a contract under which the cloud provider provides both the SaaS configuration and customisation, and the SaaS access over the contract term, the directors applied judgement to determine whether these services are distinct from each other or not, and therefore, whether the configuration and customisation costs incurred are expensed as the software is configured or customised (i.e. upfront), or over the SaaS contract term. Specifically, where the configuration and customisation activities significantly modify or customise the cloud software, these activities are not distinct from the access to the cloud software over the contract term. Judgement has been applied in determining whether the degree of customisation and modification of the cloud-based software is significant. At 31 December 2022, the Group recognised no prepayments (2021: \u20ac249 thousand) in respect of customisation and configuration activities undertaken in implementing SaaS arrangements that are considered not to be distinct from the access to the SaaS access over the contract term. Significant estimates Significant judgement in determining the lease term of contracts with renewal and termination options The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain that this will be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain that this will not be exercised. The Group applies judgement in evaluating whether it is reasonably certain it will or will not exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or the termination. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation of the leased asset). Leases - estimating the incremental borrowing rate The Group cannot readily determine the interest rate implicit in the lease, so it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group \u2018would have to pay\u2019, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease. The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary\u2019s stand-alone credit rating). Basic-Fit\u2019s IBRs are built up of the following components: \u2022 Base rate: risk-free rate \u2022 Country risk premium: premium for the higher risk associated with the country where the lease is situated \u2022 Credit rating (unsecured): premium based on Basic-Fit's credit rating per country \u2022 Lease-specific adjustment: adjustment to the (unsecured) credit rating to reflect the secured borrowing position related to the lease Basic-Fit determines the IBR per country, taking into account the term of the lease based on three ageing buckets (up to 10 years, 10-20 years and more than 20 years). The IBRs range from 1.3% to 5.4% in 2022 (2021: 0.4% to 2.7%). Significant estimates Significant judgement is required in determining the expected credit loss allowance. For this purpose, any change in the risk profile of members following the COVID-19 pandemic should be considered. ", "dimensions": { "concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-318": { "value": " Significant accounting judgements, estimates and assumptions The preparation of the Group\u2019s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities (and the accompanying disclosures), and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. In the process of applying the Group\u2019s accounting policies, management has made various judgements. Those judgements that management has assessed to have the most significant impact on the amounts recognised in the consolidated financial statements are discussed in the individual notes to the related financial statement line items or below. The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are also described in the individual notes to the related financial statement line items below. The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. However, existing circumstances and assumptions about future developments may change due to market changes or circumstances that are beyond the Group's control. Such changes are reflected in the assumptions when they occur. The table below presents the areas that involve a higher degree of judgement or areas where assumptions and estimates are significant to the financial statements: \u00a0Note Revenue recognition 3.2 Deferred tax assets 3.9 Impairment testing of goodwill 4.1 Impairment testing of non-current assets 4.2 Useful lives 4.2 Determining the lease term of contracts with renewal and termination options 4.4 Leases - estimating the incremental borrowing rate 4.4 Provision for expected credit losses 5.2/6.5 In the process of applying the Group\u2019s accounting policies, management made the following judgements that have a significant impact on the amounts recognised in the consolidated financial statements (apart from those involving estimations, which are described above): Recognition of provisions The Group is subject to a number of factors that could lead to an outflow of economic benefits. When assessing whether such factors require either provision or disclosure, management is required to consider, among other factors, whether a legal or constructive obligation exists at the reporting date and whether the resulting risk of an outflow of economic benefits is probable (requiring a provision), less than probable but more than remote (requiring disclosure), or remote (requiring neither provision nor disclosure). Decommissioning liabilities For certain fitness club locations, the Group has a contractual obligation to restore locations to an agreed upon state. The Group has not recorded a decommissioning liability for such obligations. Management judges that, based on historical experience, the likelihood that the Group will be required to restore a location to its original state is remote. Fitness club locations are often renovated to a better state than their original state and, moreover, the duration of a lease contract is usually longer than 10 years. Consequently, lessors have made very few requests for the restoration of locations over the years when leases have been terminated. The Group has therefore not recognised any decommissioning liabilities. Significant estimates Significant revenue recognition estimates relate to the identification of performance obligations and the revenue allocation as a result of the performance obligations identified. Furthermore, these estimates relate to the value that is allocated to the use of the online platform for the period that memberships were frozen (and not charged) and the accounting treatment of those members who had not explicitly chosen a compensation option.\u00a0Significant estimates The Group is subject to income taxes in the Netherlands and a number of other jurisdictions. Judgement is required to determine current tax expenses, uncertain tax positions, deferred tax assets and deferred tax liabilities, plus the extent to which deferred tax assets can be recognised. Estimates are based on forecast future taxable income and tax planning strategies. The utilisation of deferred tax assets is dependent on future taxable profit in excess of the profit arising from the reversal of existing taxable temporary differences. The recognition of deferred tax assets is based on the assessment of whether it is more likely than not that sufficient taxable profit will be available in the future to utilise the reversal of temporary differences and tax losses. Recognition of deferred tax assets involves judgement regarding the future financial performance of the particular legal entity or tax group that has recognised the deferred tax asset. Significant estimates Calculation of the recoverable amount The recoverable amount as at 31 December 2021 and 2022 was determined based on fair value less cost of disposal calculations, based on a market participant's perspective, using cash flow projections based on the financial forecast, covering a five-year period. These cash flow projections include both existing clubs and new club openings. Discount rates used are post-tax and reflect specific risks relating to the relevant operating segments and market uncertainties in general. Management considered the effects of applying a pre-tax approach and concluded that this will not materially change the outcome of the impairment test. The post-tax discount rates applied to the cash flow projections are shown in the table below. Cash flows beyond the five-year period are extrapolated using a terminal growth rate of 2.0% (2021: 0.5%) for all CGUs, which is the lowest of the current risk free rate and the long term inflation expectation. Post-tax WACC discount rate \u00a0Netherlands Belgium Luxembourg France Spain Germany 2022 10.2% 10.9% 10.2% 10.8% 12.1% 10.2% 2021 7.1% 7.6% 7.1% 7.5% 8.3% - Pre-tax WACC discount rate \u00a0Netherlands Belgium Luxembourg France Spain Germany 2022 12.7% 13.7% 13.0% 13.0% 15.1% 12.2% 2021 9.1% 9.5% 9.3% 9.2% 10.0% - Risks in relation to climate-related matters have been considered in determining the values of the key assumptions, but did not materially impact the measurement of the recoverable amount. Key assumptions used The input to the Group\u2019s key assumptions includes those that are based on non-observable market data (level 3 input in accordance with IFRS 13). The calculations of fair value less cost of disposal for the CGUs are most sensitive to the following assumptions: \u2022 Terminal growth rate; \u2022 Discount rates; \u2022 Revenue growth; and \u2022 EBITDA margin improvement. Terminal growth rate \u2013 The terminal growth rate is based on market development and industry expectations. Discount rates \u2013 The post-tax rates used to discount the projected cash flows reflect specific risks relating to relevant CGUs, based on market data in which both the cost of equity and cost of debt are derived on the basis of a peer group of companies operating in the same industry as Basic-Fit. Revenue growth \u2013 The growth rates are based on historical experience of membership developments taking into consideration the maturity of existing clubs. In addition, differences in revenue growth per CGU depend on the number of clubs we expect to open per country. The 'growth scenario' assumes a compound annual growth rate of revenues over the forecast budget period 2023-2027 of 9% (2021: 13%) for the Netherlands, 11% (2021: 15%) for Belgium, 4% (2021: 9%) for Luxembourg, 18% (2021: 27%) for France, 40% (2021: 58%) for Spain and 159% for Germany. In the 'consolidation scenario', the average annual growth rate of revenues for all CGUs is 4.9% (2021: 8.5%). After the forecast period, revenues are expected to increase by 2.0% annually in both scenarios. EBITDA margin improvement \u2013 The cash flow projections assume long term EBITDA margins in line with those already realised in the currently mature clubs (before the impact of COVID-19), with an increase as a result of synergies on overhead and marketing in the 'growth scenario' and an increase in revenue per member. Significant estimates Impairment testing The Group determines whether other intangibles assets, as well as property, plant and equipment and right-of-use assets are impaired whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. This requires an estimation of the recoverable amount of the relevant CGU. The recoverable amount is the higher of fair value less costs of disposal and value in use. For the purpose of impairment testing, assets are grouped at the lowest levels for which there are separately identifiable cash flows, known as CGUs.\u00a0Impairment testing is an area involving management judgement, requiring assessment as to whether the carrying amount of assets can be supported by the net present value of future cash flows derived from such assets, using cash flow projections that have been discounted at an appropriate rate. In calculating the net present value of the future cash flows, certain assumptions need to be made in respect of highly uncertain matters. Furthermore, for impairment testing, reference is made to note 4.1 Goodwill. No impairment charge has been recorded for other intangible assets in either period presented. Useful lives The useful lives and residual values of the Group\u2019s assets are determined by management at the time the asset is acquired and reviewed annually for appropriateness. Estimated useful economic lives of property, plant and equipment, and intangibles are based on management's judgement and experience. The depreciation or amortisation charge is adjusted prospectively when management ascertains that the actual useful life differs materially from the estimates used to calculate depreciation and amortisation. Due to the significance of capital investment, variations between actual and estimated useful lives could impact operating results both positively and negatively. The useful life used to amortise intangible assets relates to the expected future performance of the assets acquired and management's judgement for the period over which economic benefit will be derived from the asset. Changes in useful lives and residual values did not result in any material changes to the Group\u2019s deprecation or amortisation charge in the years reported. Determination whether configuration and customisation services are distinct from SaaS access Costs incurred to configure or customise the cloud provider\u2019s application software are recognised as operating expenses when the services are received. In a contract under which the cloud provider provides both the SaaS configuration and customisation, and the SaaS access over the contract term, the directors applied judgement to determine whether these services are distinct from each other or not, and therefore, whether the configuration and customisation costs incurred are expensed as the software is configured or customised (i.e. upfront), or over the SaaS contract term. Specifically, where the configuration and customisation activities significantly modify or customise the cloud software, these activities are not distinct from the access to the cloud software over the contract term. Judgement has been applied in determining whether the degree of customisation and modification of the cloud-based software is significant. At 31 December 2022, the Group recognised no prepayments (2021: \u20ac249 thousand) in respect of customisation and configuration activities undertaken in implementing SaaS arrangements that are considered not to be distinct from the access to the SaaS access over the contract term. Significant estimates Significant judgement in determining the lease term of contracts with renewal and termination options The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain that this will be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain that this will not be exercised. The Group applies judgement in evaluating whether it is reasonably certain it will or will not exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or the termination. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation of the leased asset). Leases - estimating the incremental borrowing rate The Group cannot readily determine the interest rate implicit in the lease, so it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group \u2018would have to pay\u2019, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease. The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary\u2019s stand-alone credit rating). Basic-Fit\u2019s IBRs are built up of the following components: \u2022 Base rate: risk-free rate \u2022 Country risk premium: premium for the higher risk associated with the country where the lease is situated \u2022 Credit rating (unsecured): premium based on Basic-Fit's credit rating per country \u2022 Lease-specific adjustment: adjustment to the (unsecured) credit rating to reflect the secured borrowing position related to the lease Basic-Fit determines the IBR per country, taking into account the term of the lease based on three ageing buckets (up to 10 years, 10-20 years and more than 20 years). The IBRs range from 1.3% to 5.4% in 2022 (2021: 0.4% to 2.7%). Significant estimates Significant judgement is required in determining the expected credit loss allowance. For this purpose, any change in the risk profile of members following the COVID-19 pandemic should be considered. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAssetsAndLiabilitiesWithSignificantRiskOfMaterialAdjustmentExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-481": { "value": " 2.3 Summary of other significant accounting policies The general accounting policies applied to the consolidated financial statements as a whole are described below, while other significant accounting policies related to specific items are described in the relevant notes. The description of accounting policies in the notes forms an integral part of the description of the accounting policies in this section. Unless otherwise stated, these policies have been consistently applied to all the years presented. Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and entities controlled either directly, or indirectly, by the Company. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated, unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been aligned with the Group\u2019s accounting policies where necessary to ensure consistency with the policies adopted by the Group. Current versus non-current classification The Group presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when it is: Expected to be realised or intended to be sold or consumed in the normal operating cycle Held primarily for the purpose of trading Expected to be realised within twelve months after the reporting period Or Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period All other assets are classified as non-current. A liability is current when: It is expected to be settled in the normal operating cycle It is held primarily for the purpose of trading It is due to be settled within twelve months after the reporting period Or There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period The Group classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities. Foreign currency translation The Group\u2019s consolidated financial statements are presented in euros, which is also the parent company\u2019s functional currency. For each entity, the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency. Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. The Group rarely has transactions in foreign currencies, and gains and losses resulting from the settlement of such transactions are generally recognised in profit or loss. Statement of cash flows The statement of cash flows has been prepared using the indirect method, whereby profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing cash flows. Interest paid is classified as financing cash flows, while interest received is classified as investing cash flows. Dividends (if applicable) are classified as financing cash flows. Accounting policy The Group\u2019s principal sources of revenue are membership services, principally fitness club memberships, including joining fees and add-ons for drinks and/or live group lessons. In addition, in the Basic-Fit clubs, additional services are provided by external parties (e.g. personal trainers, physiotherapists), who pay a monthly fee to obtain access to the club and the members, and these are accounted for under other revenues. Other club revenues also include revenues related to the sale of day passes and revenues related to the sale of nutritional products and drinks within the club by a third party. Under this full-service vending construction, the Group receives a percentage of the revenue generated by the vending machines. These amounts are shown as revenues for the Group in its statement of profit or loss. Revenues are measured at the fair value of the consideration received or receivable and represent amounts receivable for goods supplied and services rendered, stated net of discounts, returns and value added taxes. The Group recognises revenues when the amount of revenues can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met for each of the Group\u2019s activities, as described below. Sales of services The Group provides fitness club services for its members. For sales of services, revenue is recognised in the accounting period in which the services are rendered (over the contract term). Delivery of fitness club services extends throughout the term of membership. Joining fees are recognised over the contract period for one-year contracts and over the expected duration of the membership (\u2018average length of stay\u2019) for \u2018Flex contracts\u2019 (contracts that can be cancelled every month). Membership fees collected but not earned are included in deferred revenue. The Group's promotional offers often include a discount granting a free period (e.g. current month free or next month free), waiving of the joining fee (fully or partially), granting a promotional item or discount voucher for the online store, or a combination of these. The member's payment will be based on the applicable promotion, but the monthly revenue is determined for the entire contract period by taking into consideration the discounts granted that are allocated using relative amounts. In addition to the performance obligations as described above (access to fitness clubs, joining fees, promotional items/vouchers and add-ons), there are multiple other performance obligations such as access to the Basic-Fit app, use of massage chairs and discounts on the add-on for drinks. These performance obligations have the same revenue recognition pattern as the access to the fitness club, together considered as providing fitness club services for members. In addition, Basic-Fit may recognise revenue related to access to the Basic-Fit app during a freeze period before membership fees are collected. A combination per member of timing differences between receipt and revenue recognition is possible. The deferred revenues represent the net effect of these timing differences. All compensation options offered to members (with continued access to Basic-Fit\u2019s online platform) are considered a contract modification in the light of IFRS 15. The modification is treated as a termination of the existing contract and the creation of a new contract. As a result, revenue recognised to date on the original contracts is not adjusted. Instead, the remaining portion of the original contracts and the modification are accounted for, together, on a prospective basis by allocating the remaining considerations to the remaining performance obligations, including those added in the modification. Up until August 2022, Basic-Fit sold 'Comfort' and 'Premium' contracts1 to its members. The main difference between a \u2018Comfort\u2019 and a \u2018Premium\u2019 contract is that with a \u2018Premium\u2019 contract, members can share their membership card with a family member and members can always train with a friend. As of August 2022, the 'Comfort' contract was replaced by a 'Basic' contract. With a 'Basic' contract, a member can only workout in one club, while with a 'Premium' contract, members have access to all clubs in all countries. Furthermore in the last months of 2022, Basic-Fit introduced an 'All-in' membership option. This membership is a combination of a 'Premium' one-year membership and the two or three-year rental of a bike. Since August 2022, live group lessons are included in the Basic and Premium contracts and this is no longer sold as an add-on to new members. Members with an existing 'Comfort' contract (until August 2022) can continue to make use of the privileges of that contract until they cancel their contract, downgrade their contract to 'Basic' or upgrade their contract to 'Premium'. Members have the option to upgrade or downgrade their contract. This is not possible for members who have chosen the \u2018Flex\u2019 option. In the event that a member opts to upgrade or downgrade their contract, the original contract is ended at the date of modification and the member enters into a new membership with a duration of one year (three years for the bike rent in the case of the 'All-in' contract). An upgrade or downgrade should be recognised as a contract modification. In the event of an upgrade, the new services are accounted for as a separate contract. Any remaining discount on the original contract continues to be spread over the original contract term. In the event of a downgrade, revenue recognised to date on the original contract is not adjusted. Instead, the remaining portion of the original contracts and the modification are accounted for, together, on a prospective basis by allocating the remaining considerations to the remaining performance obligations, including those added in the modification. As a result, the (remaining) discount on the original contract is spread over the contract term of the new modified contract. Sales of goods The Group sells nutritional and other fitness-related products in its fitness clubs via vending machines, as well as via its online store. Sales of these products are recognised when the products are sold to the customer. Accounting policy Cost of consumables used are accounted for in the year incurred. Accounting policy Salaries, wages and social security contributions are charged to statement of profit or loss based on the terms of employment, where they are due to employees and the tax authorities respectively. The Group operates a number of defined contribution pension plans. A defined contribution plan is a pension plan under which the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as an employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. Accounting policy The Group has a number of equity-settled share-based payment plans, under which the Management Board members and selected eligible em\u00adploy\u00adees perform services in exchange for equity instruments of the Company. The total amount to be expensed for services performed is determined by reference to the grant date fair value of the share-based payment awards made, including the impact of any non-vesting conditions and market conditions. The fair value determined at the grant date is expensed on a straight-line basis over the three-year vesting period, based on the Group's estimate of the number of awards that will eventually vest, with a cor\u00adre\u00adspond\u00ading credit to equity. If applicable, the difference between the amount based on the estimated number of shares awarded and the amount based on the actual number of shares awarded that vest is recognised in the consolidated statement of profit or loss in the financial year in which the shares awarded vest. Service conditions and non-market performance conditions are taken into account in the number of awards expected to vest. At each reporting date, the Group revises its estimates of the number of awards that are expected to vest. The impact of the revision of vesting estimates, if any, is recog\u00adnised in the consolidated statement of profit or loss for the period. Accounting policy Reference is made to note 4.2 Other intangible assets, note 4.3 Property, plant and equipment and note 4.4 Right-of-use assets and lease liabilities. Accounting policy Operating income that cannot be allocated to revenues as described in note 3.2 Revenue is recognised as other operating income. Accounting policy Expenses arising from the Group\u2019s business operations are accounted for in the year incurred. Marketing expenses arising from the Group\u2019s business operations are accounted for in the year incurred. The Group receives marketing contributions from its main suppliers of fitness equipment based on separate marketing contribution agreements that are unrelated to the purchase of fitness equipment from these suppliers, and therefore qualify as distinct services. The amount of the contribution is determined between the Group and the relevant suppliers by evaluating the joint marketing efforts. The Group recognises these contributions as a reduction against the marketing expenses in the statement of profit or loss, as these are reimbursements for joint marketing costs incurred by the Group. Accounting policy The income tax expense or credit for the period is the tax payable or receivable on the current period\u2019s taxable result, based on the applicable income tax rate for each jurisdiction adjusted for changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. Current income tax Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and amends tax assets and liabilities where appropriate. Current tax assets and tax liabilities are offset when the entity has a legally enforceable right to offset and intends either to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax Deferred income tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Nor is the deferred income tax accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss and at the time of the transaction does not give rise to equal amounts of taxable and deductible temporary differences. Deferred income tax is determined using tax rates (and laws) that have been enacted, or substantially enacted, by the end of the reporting period, and are expected to apply when the related deferred income tax asset is realised,or the deferred income tax liability is settled. Deferred tax assets are recognised for unused tax losses, deductible temporary tax differences, and tax credits to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the likely timing and level of future taxable profits, together with future tax planning strategies. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the Group is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities, and when the deferred income tax assets and liabilities relate to income taxes levied by the same tax authority on either the taxable entity or different taxable entities, where there is an intention to settle the balances on a net basis. Accounting policy Government grants are recognised when there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset. Government grants that are receivable as compensation for expenses or losses that have already been incurred, or for the purpose of giving immediate financial support to the Group with no related future costs, are recognised as other operating income in the period in which the grants become receivable. Accounting policy Goodwill on the acquisition of subsidiaries is included in intangible assets. Goodwill is not amortised but is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. The Group tests goodwill and other applicable assets for impairment annually in December, or whenever management identifies conditions that may indicate a risk of impairment, by comparing their recoverable amount with their carrying amount. Goodwill is allocated to CGUs for the purpose of impairment testing. The goodwill is allocated to those CGUs, or groups of CGUs, that are expected to benefit from the business combination in which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal management purposes. Management monitors goodwill on a country basis. Therefore, goodwill has been allocated to the Netherlands, Belgium, Luxembourg, France and Spain. An impairment loss is recognised for the amount by which the asset\u2019s carrying amount exceeds its recoverable amount and is recognised immediately in the statement of profit or loss. The recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and its value in use. In estimating the recoverable amount, management is required to make an estimate of the expected future cash flows from the cash-generating unit in the forecast period and also to determine a suitable discount rate in order to calculate the present value of those cash flows. Such estimates are subject to a certain degree of judgement and uncertainty. Impairments to goodwill are not subsequently reversed. Reference is also made to note 4.5 Business combinations. Accounting policy Customer relationships and brand name Customer relationships and brand names acquired in a business combination are recognised at fair value at the acquisition date. Separately acquired customer relationships and brand names are recognised at historical cost. Customer relationships and brand names have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses. Brand names are amortised on a straight-line basis over their estimated useful life of 20 years. For customer relationships, amortisation is calculated based on the pattern of economic benefits that Basic-Fit obtains from these customer relationships. If such a pattern cannot be reliably estimated the amortisation is calculated using the straight-line method over their estimated useful lives of 7-8 years. Other intangible assets Other intangible assets are mostly software-related and are measured at cost on initial recognition. Following initial recognition, other intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is recognised in the statement of profit or loss when incurred. Costs associated with maintaining computer software programmes are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets when the following criteria are met: \u2022 it is technically feasible to complete the software product so that it will be available for use; \u2022 management intends to complete the software product and use or sell it; \u2022 there is an ability to use or sell the software product; \u2022 it can be demonstrated how the software product will generate probable future economic benefits; \u2022 adequate technical, financial and other resources to complete the development and to use or sell the software product are available; and \u2022 the expenditure attributable to the software product during its development can be reliably measured. Directly attributable costs that are capitalised as part of the software product include the software development employee costs. Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Judgement is required in evaluating whether subsequent development expenditure is to be capitalised as an internally generated intangible asset or expensed as incurred. The key elements of judgement are whether the development project will generate incremental probable future economic benefit and which projects result in substantial improvements that increase the functionality of the asset. Economic benefit is determined as either an increase in revenues or a reduction in costs. Only those projects that are a substantial improvement and that result in direct and incremental economic benefit will be capitalised. Software-as-a-Service (SaaS) arrangements are service contracts providing the Group with the right to access the cloud provider\u2019s application software over the contract period. Costs incurred to configure or customise, and the ongoing fees to obtain access to the cloud provider\u2019s application software, are recognised as operating expenses when the services are received, unless the criteria to recognise the expenditures as an intangible asset are satisfied. The useful lives of intangible assets are assessed as either finite or indefinite. The Group has assessed the remaining useful life to be finite for all recognised other intangible assets. Other intangible assets with finite lives are amortised over their useful economic lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit or loss in the expense category consistent with the function of the intangible assets. Computer software development costs recognised as assets are amortised over their estimated useful lives, which do not exceed five years. Gains or losses arising from the derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised. Other intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset\u2019s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and its value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows, which are largely independent of the cash inflows from other assets or groups of assets (CGUs). Other intangible assets are tested for impairment as part of the CGUs and as further disclosed in note 4.1 Goodwill. Non-financial assets other than goodwill that have suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period. Accounting policy Property, plant and equipment is stated at historical cost less accumulated depreciation and accumulated impairment losses. Historical costs include expenditure that is directly attributable to the acquisition of the items and is calculated after deducting trade discounts. Subsequent costs are included in the asset\u2019s carrying amount, or recognised as a separate asset as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the costs of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. Depreciation is calculated using the straight-line method to allocate their costs, net of their residual values, over their estimated useful lives as follows: \u2022 Land: not depreciated \u2022 Building: 30 years; \u2022 Building improvements: 5\u201320 years; \u2022 Exercise equipment: 4\u20138 years; and \u2022 Other property, plant and equipment: 5\u201310 years. The assets\u2019 residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in Other operating income in the consolidated statement of profit or loss. Fixed assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset\u2019s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and its value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows, which are largely independent of the cash inflows from other assets or groups of assets (CGUs). Non-financial assets other than goodwill that have suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period. Accounting policy Right-of-use assets The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The right-of-use asset for acquired leases is measured at the present value of the remaining lease payments adjusted for any favourable or unfavourable lease terms recognised when compared to market terms. These favourable and unfavourable contracts are recognised at fair value on the acquisition date for contracts whose terms are respectively favourable or unfavourable compared with current market terms, and they are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method, based on the term of the lease contracts. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of their estimated useful life and the lease term. Lease liabilities At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of whether to purchase the underlying asset. The Group applied the practical expedient issued by the International Accounting Standards Board as a part of the Amendment to IFRS 16 (COVID-19-Related Rent Concessions) and records rent credits granted by lessors as profit in the Consolidated Statement of Profit or Loss and not as a lease modification resulting in the remeasurement of right-of-use assets and lease liabilities. Lease component and non-lease components The Company has elected to separate lease and non-lease components included in lease payments for property leases. Regarding vehicles leases, Basic-Fit applies the practical expedient not to separate non-lease components from lease components. Therefore, the full monthly lease fees will be reflected on Basic-Fit\u2019s statement of financial position. Basic-Fit applies a portfolio approach for vehicle leases to effectively account for the right-of-use assets and lease liabilities. Short-term leases and leases of low-value assets The Group applies the short-term lease recognition exemption to its short-term leases (i.e. those leases that have a lease term of twelve months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases that are considered of low value (i.e. below \u20ac5,000). Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a straight-line basis over the lease term. Extension options Most of the lease contracts for buildings include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and to align with the Group\u2019s business needs. Management exercises significant judgement in determining whether it is reasonably certain that these extension and termination options will be exercised (see below). Extension options are included in the lease term when the Group has such an economic incentive that exercising the option is reasonably certain. The Group considers available evidence at the time of the assessment, including potentially favourable terms upon extension, potential termination penalties, the relative costs associated with potential relocation or termination of the lease and the extent of leasehold improvements undertaken. Additionally, the size and the relative importance of the leased premises as well as the availability of easily substitutable assets are taken into consideration when assessing whether the Group has an economic incentive to extend a lease for which it holds an option to do so. Periods covered by termination options are included as part of the lease term only when it is reasonably certain that these will not be exercised. Accounting policy Business combinations are accounted for using the acquisition method. The costs of an acquisition are measured as the aggregate of the consideration transferred, which is measured at fair value at the acquisition date and the amount of any non-controlling interest in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interest in the acquiree at fair value or at the proportionate share of the acquiree\u2019s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses. The Group determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent considerations classified as equity are not remeasured and its subsequent settlement is accounted for within equity. Contingent considerations classified as assets or liabilities that are financial instruments and within the scope of IFRS 9 Financial Instruments, are measured at fair value with the changes in fair value recognised in the statement of profit or loss in accordance with IFRS 9. Other contingent considerations that are not within the scope of IFRS 9 are measured at fair value at each reporting date with changes in fair value recognised in profit or loss. Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired exceeds the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in the excess fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group\u2019s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed of in these circumstances is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained. Accounting policy Inventories are stated at the lower of costs and net realisable value. Costs comprise direct materials. Costs are assigned to individual items of inventory on the basis of weighted average costs. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. Accounting policy Trade and other receivables include amounts due from members for services performed in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets. Trade receivables are generally due for settlement within 30 days or less and are therefore all classified as current. Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost, using the effective interest rate method, less provision for impairment. Reference is made to note 6.5 Financial instruments for the accounting policy related to financial assets and liabilities, derivative financial instruments and fair value measurement. Accounting policy In the statement of cash flows, cash and cash equivalents include cash on hand and deposits held at call with financial institutions. In the statement of financial position, bank overdrafts are shown within borrowings in current liabilities. Accounting policy These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid. The amounts are unsecured and are usually paid within 30-60 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within twelve months after the reporting period. They are initially recognised at their fair value and subsequently measured at amortised cost using the effective interest rate method. For deferred revenues, reference is made to note 3.2 Revenue. Accounting policy Ordinary shares are classified as share capital. The share premium represents the amount by which the fair value of the consideration received exceeds the nominal value of shares issued. Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction, net of tax, from the proceeds. Treasury shares are deducted from equity for the consideration paid, including any directly attributable incremental costs (net of income taxes), until the shares are cancelled or reissued. When such shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and related income tax effects, is included in equity. Reference is made to the accounting policy in note 6.5 Financial instruments related to compound financial instruments for the accounting policy related to 'equity components of convertible bonds'. Accounting policy Basic earnings per share are calculated by dividing the net result for the year attributable to ordinary equity holders of the parent company by the weighted average number of ordinary shares outstanding during the year. Treasury shares are deducted from the number of ordinary shares outstanding on a weighted basis. Diluted earnings per share are calculated by dividing the net result for the year attributable to ordinary equity holders of the parent company adjusted for the interest on convertible bonds by the weighted average number of ordinary shares outstanding during the year, plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares. Accounting policy Borrowings are initially recognised at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest rate method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period. However, a revolving credit facility is classified as non-current if the Group expects, and has the discretion, to roll over for at least twelve months after the reporting period. The Group does not have any qualifying assets, which are assets that necessarily take a substantial period of time to prepare for their intended use or sale. Therefore, borrowing costs are not capitalised and are expensed in the period in which they are incurred. Reference is made to note 6.5 Financial instruments for the accounting policy related to financial assets and liabilities, derivative financial instruments and fair value measurement. Accounting policy Reference is made to note 6.5 Financial instruments for the accounting policy with respect to financial assets and liabilities, derivative financial instruments and fair value measurement. Accounting Policy A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Accounting Policy Financial assets Initial recognition and measurement Financial assets are classified, at initial recognition, and subsequently measured at amortised cost and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset\u2019s contractual cash flow characteristics and the Group\u2019s business model for managing them. The Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component are measured at the transaction price determined under IFRS 15. Reference is made to the accounting policies in Note 3.2 Revenue. For a financial asset to be classified and measured at amortised cost, it needs to give rise to cash flows that are \u2018solely payments of principal and interest (SPPI)\u2019 on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at instrument level. The Group\u2019s business model for managing financial assets refers to how it manages its financial assets to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Purchases or sales of financial assets that require the delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset. Subsequent measurement For the purposes of subsequent measurement, financial assets are classified into two categories: \u2022 Financial assets at amortised cost (debt instruments) \u2022 Financial assets at fair value through profit or loss Financial assets at amortised cost (debt instruments) This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of the following conditions are met: \u2022 The financial asset is held within a business model with the objective of holding financial assets to collect contractual cash flows and \u2022 The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding Financial assets at amortised cost are subsequently measured using the effective interest rate method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. The Group\u2019s financial assets at amortised cost include trade receivables. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the statement of profit or loss. Impairment of financial assets Aside from this note, other disclosures relating to impairment of financial assets (trade receivables) are included in note 5.2 Trade and other receivables. The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. For trade receivables, the Group applies a simplified approach for the calculation of ECLs. The Group does not, therefore, track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. Derecognition of financial assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Group\u2019s consolidated statement of financial position) when: \u2022 The rights to receive cash flows from the asset have expired or \u2022 The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u2018pass-through\u2019 arrangement and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset. Accounting Policy Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group\u2019s financial liabilities include trade and other payables, loans and borrowings, including bank overdrafts and derivative financial instruments. Subsequent measurement The measurement of financial liabilities depends on their classification, as described below. Financial liabilities at fair value through profit or loss The Group has not designated any financial liabilities as at fair value through profit or loss. Loans and borrowings This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, as well as through the effective interest rate amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included as finance costs in the statement of profit or loss. This category generally applies to interest-bearing loans and borrowings. Derecognition of financial liabilities A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. A voluntary forgiveness of a lease liability granted by the lessor without other changes to the lease as a (partial) derecognition of a lease liability is accounted for as a credit to profit or loss. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss. If the terms are not substantially different, the original liability is not derecognised and a modification gain or loss is determined based on the original effective interest rate. However, if the financing agreement has a prepayment option at par without significant penalty, the adjustment is treated as a modification with a prospective adjustment of the effective interest rate to reflect the new market rate and without recognising a gain or loss on modification. Accounting Policy Compound financial instruments Compound financial instruments issued by the Group comprise convertible bonds denominated in euro that can be converted to ordinary shares at the option of the holder, when the number of shares to be issued is fixed and does not vary with changes in fair value. The liability component of compound financial instruments is initially recognised at the fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognised at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest rate method. The equity component of a compound financial instrument is not remeasured. Interest related to the financial liability is recognised in profit or loss. On conversion at maturity, the financial liability is reclassified to equity and no gain or loss is recognised. Accounting Policy Derivative financial instruments and hedging activities Initial recognition and subsequent measurement The Group uses interest rate swaps as derivative financial instruments to hedge its interest rate risks. Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. The Group did not apply hedge accounting for the remaining financial instruments as at 31 December 2022. Therefore, all changes related to these financial instruments will be recognised in profit or loss. Accounting Policy Fair value measurement The Group measures financial instruments such as derivatives at fair value at each reporting date. Fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: \u2022 In the principal market for the asset or liability or \u2022 in the absence of a principal market, in the most advantageous market for the asset or liability The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: Level 1 \u2014 Quoted (unadjusted) market prices in active markets for identical assets or liabilities Level 2 \u2014 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable Level 3 \u2014 Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. For all years presented, the Group only held financial instruments that classify as Level 2 fair values. The Group did not hold any Level 1 or Level 3 financial instruments, nor were there any transfers between levels in the year under review. The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques that maximise the use of observable market data where it is available and rely as little as possible on entity-specific estimates. If all significant inputs required to assign a fair value to an instrument are observable, the instrument is included in Level 2. The fair value of the interest rate swaps is calculated as the present value of the estimated future cash flows, based on observable yield curves (discounted cash flow model). Accounting Policy Reference is made to note 6.5 Financial instruments for the accounting policy related to financial assets and liabilities, derivative financial instruments and fair value measurement. Accounting Policy Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Restructuring provisions are recognised only when the Group has a constructive obligation, which is when: (i) there is a detailed formal plan that identifies the business or part of the business concerned, the location and number of employees affected, the detailed estimate of the associated costs, and the timeline; and (ii) the employees affected have been notified of the plan\u2019s main features. Provisions are measured at the best estimate of the expenditure required to settle the obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the obligation, the carrying amount is the present value of those cash flows (when the effect of the time value of money is material). Provisions are not recognised for future operating losses. When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit or loss net of any reimbursement. The cases and claims against the Group often raise difficult and complex factual and legal issues which are subject to many uncertainties and complexities, including but not limited to the facts and circumstances of each particular case and claim, the jurisdiction in which each suit is brought, and the differences in applicable law. In the normal course of business, management consults with legal counsel and certain other experts on matters related to such claims and litigation. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation, using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as an interest expense. ", "dimensions": { "concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-319": { "value": "The consolidated financial statements incorporate the financial statements of the Company and entities controlled either directly, or indirectly, by the Company. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated, unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been aligned with the Group\u2019s accounting policies where necessary to ensure consistency with the policies adopted by the Group. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-482": { "value": "The Group\u2019s consolidated financial statements are presented in euros, which is also the parent company\u2019s functional currency. For each entity, the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency. Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. The Group rarely has transactions in foreign currencies, and gains and losses resulting from the settlement of such transactions are generally recognised in profit or loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-483": { "value": "The Group\u2019s consolidated financial statements are presented in euros, which is also the parent company\u2019s functional currency. For each entity, the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency. Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. The Group rarely has transactions in foreign currencies, and gains and losses resulting from the settlement of such transactions are generally recognised in profit or loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-484": { "value": "The statement of cash flows has been prepared using the indirect method, whereby profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing cash flows. Interest paid is classified as financing cash flows, while interest received is classified as investing cash flows. Dividends (if applicable) are classified as financing cash flows. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCashFlowsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-320": { "value": " 2.4 Changes in accounting policies and disclosures New and amended standards and interpretations The Group applied for the first time certain standards and amendments that are effective for annual periods beginning on or after 1 January 2022. Several amendments and interpretations applied for the first time in 2022, but did not have an impact on the financial statements of the Group. The Group has not opted for the early adoption of any other standard, interpretation or amendment that has been issued but is not yet effective. 2.5 Standards and interpretations issued but not yet effective Certain new accounting standards and interpretations have been issued but are not yet effective for the year ended 31 December 2022. These standards and interpretations are not expected to have a material impact on the entity in the current or future reporting periods, or on foreseeable future transactions. ", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-321": { "value": " 2.4 Changes in accounting policies and disclosures New and amended standards and interpretations The Group applied for the first time certain standards and amendments that are effective for annual periods beginning on or after 1 January 2022. Several amendments and interpretations applied for the first time in 2022, but did not have an impact on the financial statements of the Group. The Group has not opted for the early adoption of any other standard, interpretation or amendment that has been issued but is not yet effective. 2.5 Standards and interpretations issued but not yet effective Certain new accounting standards and interpretations have been issued but are not yet effective for the year ended 31 December 2022. These standards and interpretations are not expected to have a material impact on the entity in the current or future reporting periods, or on foreseeable future transactions. ", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-324": { "value": "The chief operating decision-maker ('CODM'), who is responsible for allocating resources and assessing the performance of the operating segments, has been identified as the Company\u2019s CEO, CFO, COO and CCO (\u2018Leadership team\u2019). The CODM examines the Group\u2019s performance from a geographical perspective and has identified six operating segments: the Netherlands, Belgium, Luxembourg, France, Spain and Germany.
The business activity of all of these operating segments is the operation of value-for-money fitness clubs under the same Basic-Fit label. The formula for the operation of these clubs is the same in all countries: memberships and membership fees are similar, and the cost structure is similar. Furthermore, all operating segments and their business activities are located in EU-member countries. The political and economic environment of these countries is similar, and the euro is used in all countries. Moreover, the Benelux countries (Belgium, the Netherlands and Luxembourg) generated similar profit margins (underlying EBITDA) pre-COVID-19, as did France and Spain. However, the profit margins in the Benelux were not (yet) comparable to those in France and Spain, which are the countries where the fastest growth has been realised in past years and is also expected for the coming years. Profit margins in the period 2020 and 2021 were heavily impacted by temporary club closures as a result of COVID-19 and 2022 was still a recovery year due to the time it took to recover from the loss in memberships during the pandemic. As a result, these years are less comparable.
For Basic-Fit, Germany is a new operating segment with only a few club openings in the fourth quarter of 2022. As a result, profit margins were negative in 2022 but fast growth in clubs and of profit margins is expected in the coming years.
Given similar economic characteristics and ignoring the impact of temporary club closures on profit margins in the period 2020 to 2022, as well as the fact that the nature of the services, the types of members, the methods for distribution and the regulatory environments are similar, the operating segments Belgium, the Netherlands and Luxembourg have been aggregated into one reportable segment (Benelux), and the operating segments France, Spain and Germany have also been aggregated into one reportable segment (France, Spain & Germany). In preparing the segment disclosures, management is required to use judgement in applying the aggregation criteria as set out in IFRS 8.22/BC30A.
The Basic-Fit CODM primarily uses underlying EBITDA as an alternative performance measure to monitor operating segment results and performance. Total revenues and underlying EBITDA per reporting segment are as follows:
| For the year ended 31 December 2022 | Benelux | France, Spain & Germany | Total |
|---|---|---|---|
| Revenues | 364,489 | 430,082 | 794,571 |
| Underlying EBITDA segments | 151,688 | 95,697 | 247,385 |
| Other reconciling items | \u00a0 | \u00a0 | (43,605) |
| Total underlying EBITDA | \u00a0 | \u00a0 | 203,780 |
| Reconciliation of underlying EBITDA to profit/(loss) before tax: | \u00a0 | \u00a0 | \u00a0 |
| Underlying EBITDA | \u00a0 | \u00a0 | 203,780 |
| Depreciation, amortisation and impairment charges | \u00a0 | \u00a0 | (331,389) |
| Finance costs \u2013 net | \u00a0 | \u00a0 | (58,633) |
| Invoiced rent | \u00a0 | \u00a0 | 193,642 |
| COVID-19 rent credits | \u00a0 | \u00a0 | 2,415 |
| Exceptional items: | \u00a0 | \u00a0 | \u00a0 |
| - COVID-19 related costs | \u00a0 | \u00a0 | (8,438) |
| - Other exceptional costs and profits | \u00a0 | \u00a0 | (4,518) |
| Profit/(loss) before tax | \u00a0 | \u00a0 | (3,141) |
| For the year ended 31 December 2021 | Benelux | France & Spain | Total |
|---|---|---|---|
| Revenues | 169,009 | 171,737 | 340,746 |
| Underlying EBITDA segments | 49,638 | 10,752 | 60,390 |
| Other reconciling items | \u00a0 | \u00a0 | (28,760) |
| Total underlying EBITDA | \u00a0 | \u00a0 | 31,630 |
| Reconciliation of underlying EBITDA to profit/(loss) before tax: | \u00a0 | \u00a0 | \u00a0 |
| Underlying EBITDA | \u00a0 | \u00a0 | 31,630 |
| Depreciation, amortisation and impairment charges | \u00a0 | \u00a0 | (283,881) |
| Finance costs \u2013 net | \u00a0 | \u00a0 | (56,755) |
| Invoiced rent | \u00a0 | \u00a0 | 167,375 |
| COVID-19 rent credits | \u00a0 | \u00a0 | 23,143 |
| Exceptional items: | \u00a0 | \u00a0 | \u00a0 |
| - COVID-19 related costs | \u00a0 | \u00a0 | (79,554) |
| - Other exceptional costs and profits | \u00a0 | \u00a0 | (3,310) |
| Profit/(loss) before tax | \u00a0 | \u00a0 | (201,352) |
Other reconciling items represent corporate costs that are not allocated to the operating segments. These corporate costs mainly consist of personnel costs and IT costs.
COVID-19 related exceptional costs include personnel costs, club rent and related housing expenses and other costs, to the extent that Basic-Fit did not receive government compensation related to the time that clubs were closed. Other exceptional costs and profits include start-up costs for the segment Germany, costs related to club closures and other costs that can be considered as exceptional based on the facilities agreement1 with the banks.
The Group operates in six countries. Note 3.2 Revenue contains a breakdown of the revenues of these countries, as well as those of the Netherlands, the Group\u2019s country of domicile. Furthermore, there are no customers that account for 10% or more of revenue in any year presented.
A breakdown of the non-current assets is as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| The Netherlands (country of domicile) | 620,619 | 560,277 |
| Belgium | 426,417 | 402,022 |
| Luxembourg | 37,746 | 36,299 |
| France | 1,300,976 | 1,167,343 |
| Spain | 218,304 | 124,581 |
| Germany | 15,276 | - |
| Total | 2,619,338 | 2,290,522 |
Non-current assets for this purpose consist of property, plant and equipment, right-of-use assets, goodwill and other intangible assets. The additions to non-current assets (the Benelux segment \u20ac145 million, the France, Spain & Germany segment \u20ac403 million) are directly related to the investments in new club openings in 2022.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Type of goods or service | \u00a0 | \u00a0 |
| Fitness membership revenue | 764,398 | 330,642 |
| Other club revenue | 24,264 | 7,577 |
| Other non-club revenue | 5,909 | 2,527 |
| Total | 794,571 | 340,746 |
| \u00a0 | \u00a0 | \u00a0 |
| Geographical markets | \u00a0 | \u00a0 |
| The Netherlands | 191,012 | 87,447 |
| Belgium | 160,838 | 74,300 |
| Luxembourg | 12,639 | 7,262 |
| France | 394,533 | 150,497 |
| Spain | 34,912 | 21,240 |
| Germany | 637 | - |
| Total | 794,571 | 340,746 |
| \u00a0 | \u00a0 | \u00a0 |
| Timing of revenue recognition | \u00a0 | \u00a0 |
| Products and services recognised over time | 722,448 | 313,064 |
| Products recognised at a point in time | 72,123 | 27,682 |
| Total | 794,571 | 340,746 |
Basic-Fit receives considerations before revenues are recognised (e.g. collected membership fees for future periods), but also recognises revenues before considerations are received (e.g. access to the clubs during a 'free' period). A combination of timing differences between receipts and revenue recognition per member is possible. In the event that the revenues recognised exceed the received considerations, this is recognised as part of receivables. In the event that the received considerations exceed the revenues recognised, this is recognised as deferred revenues.
The following table provides information about receivables and deferred revenues from contracts with customers:
| \u00a0 | 31 December 2022 | 31 December 2021 | 1 January 2021 |
|---|---|---|---|
| Receivables, included in 'Trade and other receivables' | 35,646 | 9,417 | 16,022 |
| Deferred revenues, included in 'Trade and other payables' | 17,435 | 18,688 | 46,570 |
The receivables relate to amounts due from customers for services performed in the past period(s), less any provision for impairment. Furthermore, receivables include amounts related to timing differences for situations where the revenues recognised exceed the received considerations. The increase in receivables is the result of the strong increase in members in 2022, resulting in more member receivables (unpaid membership fees) and more situations in which revenues recognised exceed the received considerations.
The contract liabilities relate to the advance consideration received from customers, for which revenue is recognised over time in situations that the received considerations exceeds the revenues recognised. The decline in deferred revenues in 2022 resulted from a decreasing number of situations in which the received considerations exceeded the revenues recognised.
All remaining performance obligations are expected to be recognised within one year.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Member and trade receivables | 54,082 | 28,011 |
| Less: allowance for expected credit losses | (18,436) | (18,594) |
| Receivables \u2013 net | 35,646 | 9,417 |
| Security deposits | 8,912 | 6,740 |
| Loan receivable | 29 | 40 |
| Taxes and social charges (mainly VAT) | 17,709 | 18,477 |
| Prepayments | 5,236 | 9,543 |
| Other receivables and accrued income | 18,213 | 34,642 |
| Total receivables | 85,745 | 78,859 |
| Less: non-current portion of security deposits | 8,912 | 6,740 |
| Less: non-current loans receivable | 29 | 40 |
| Total non-current portion | 8,941 | 6,780 |
| Total current portion | 76,804 | 72,079 |
The decrease in 'Other receivables and accrued income' mainly relates to government grants receivable.
The fair value of the receivables approximates the carrying amount. No breakdown of the fair values of trade and other receivables has been included, as the differences between the carrying amount and the fair values are insignificant. In determining the expected credit loss allowance, the Group has considered any change in the risk profile of its members following the COVID-19 pandemic and the economic uncertainty.
The carrying amounts of the Group\u2019s trade and other receivables are all denominated in euros.
Movements in the Group provision for impairment of receivables were as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| As at 1 January | (18,594) | (15,418) |
| Provision for impairment recognised during the year | (14,647) | (19,468) |
| Receivables written off during the year as uncollectable | 14,805 | 16,292 |
| As at 31 December | (18,436) | (18,594) |
The creation and release of provisions for impaired receivables have been included in 'Other operating expenses' in the statement of profit or loss (note 3.8 Other operating expenses). Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash. As described in note 6.4 Financial risk management regarding credit risk, all member-related receivable balances are automatically past due. The estimated provision for impairment losses is recognised based on the expected credit loss for each of the ageing buckets.
The other classes in trade and other receivables do not contain impaired assets and are not past due. Based on the credit history of these other classes, the Group expects these amounts to be received when due (the Group does not hold any collateral with respect to these receivables).
Trade and other receivables include amounts due from members for services performed in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets. Trade receivables are generally due for settlement within 30 days or less and are therefore all classified as current.
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost, using the effective interest rate method, less provision for impairment.
Reference is made to note 6.5 Financial instruments for the accounting policy related to financial assets and liabilities, derivative financial instruments and fair value measurement.
Credit risk arises from cash, cash equivalents and deposits with banks and financial institutions, as well as credit exposures to outstanding receivables for membership fees or other membership services that could not be collected upfront. The carrying amounts of these financial instruments as disclosed in notes 5.2 Trade and other receivables and 5.3 Cash and cash equivalents represent the Group\u2019s maximum credit exposure.
The Group\u2019s policy is that all members need to pay membership fees upfront, which means that credit risk related to membership fees is limited to those fees that could not be collected upfront. The first measure to limit credit risk is to deny access to the services provided by the Group to members with overdue receivables until the receivables have been fully paid. The second measure is the Group\u2019s collection policy of using debt collection agencies for all receivables due for more than 120 days. The Group does not hold collateral as security for the membership receivables. The Group evaluates the concentration of risk with respect to trade receivables as low, as its members are located in several jurisdictions.
As a result of the Group\u2019s prepayment policy, any account receivables balances are automatically past due.
An ageing analysis of the Group\u2019s trade and other receivables that are past due (including provision for expected credit losses) is as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Overdue <30 days | 19,265 | 3,420 |
| Overdue 31-60 days | 2,470 | 3,829 |
| Overdue 61-90 days | 3,632 | 1,149 |
| Overdue >90 days | 10,279 | 1,019 |
| Balance incl. provision | 35,646 | 9,417 |
The receivables consist of member receivables and trade receivables. These receivables are assessed collectively to determine whether an impairment should be recognised. As a direct result of the COVID-19 pandemic, and economic uncertainty increasing in 2022, the Group noticed that it was more difficult to collect the outstanding amounts. In determining the expected credit loss allowance the Group considered any change in the risk profile of its members following the COVID-19 pandemic and the economic uncertainty as of 2022. For the receivables, the estimated impairment losses are recognised in a separate provision for impairment, which is based on the expected credit loss for each of the ageing buckets. As at 31 December 2022, the provision stood at \u20ac18.4 million (2021: \u20ac18.6 million). The Group avoids the concentration of credit risk on its cash and cash equivalents by spreading them over reputable banks: ABN AMRO, Rabobank, ING, KBC and BNP Paribas. No collateral is held for the aforementioned liquid assets.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Initial recognition and measurement
Financial assets are classified, at initial recognition, and subsequently measured at amortised cost and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset\u2019s contractual cash flow characteristics and the Group\u2019s business model for managing them. The Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component are measured at the transaction price determined under IFRS 15. Reference is made to the accounting policies in Note 3.2 Revenue.
For a financial asset to be classified and measured at amortised cost, it needs to give rise to cash flows that are \u2018solely payments of principal and interest (SPPI)\u2019 on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at instrument level. The Group\u2019s business model for managing financial assets refers to how it manages its financial assets to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require the delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset.
Subsequent measurement
For the purposes of subsequent measurement, financial assets are classified into two categories:
\u2022 Financial assets at amortised cost (debt instruments)
\u2022 Financial assets at fair value through profit or loss
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of the following conditions are met:
\u2022 The financial asset is held within a business model with the objective of holding financial assets to collect contractual cash flows
and
\u2022 The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding
Financial assets at amortised cost are subsequently measured using the effective interest rate method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
The Group\u2019s financial assets at amortised cost include trade receivables.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the statement of profit or loss.
Impairment of financial assets
Aside from this note, other disclosures relating to impairment of financial assets (trade receivables) are included in note 5.2 Trade and other receivables.
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
For trade receivables, the Group applies a simplified approach for the calculation of ECLs. The Group does not, therefore, track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
\u2022 The rights to receive cash flows from the asset have expired
or
\u2022 The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u2018pass-through\u2019 arrangement and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Cost of food and drink | (8,658) | (4,848) |
| Other cost of sales | (13,740) | (9,054) |
| Total | (22,398) | (13,902) |
'Cost of food and drink' includes \u20ac30 thousand (2021: \u20ac873 thousand) related to stocks whose expiration date has passed. 'Other cost of sales' consists primarily of sports apparel and other goods that are sold to members and/or via the online store.\u00a0
The increase in costs of consumables used is directly related to the increase in revenues as disclosed in note 3.2 Revenue.
Cost of consumables used are accounted for in the year incurred.
Employee benefits expense can be broken down as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Salaries and wages (including share-based payments)1 | (120,998) | (64,804) |
| Social security contributions | (24,527) | (15,112) |
| Pension costs \u2013 defined contribution plans | (2,254) | (1,590) |
| Total | (147,779) | (81,506) |
Salaries and wages include \u20ac29 thousand government grants (2021: \u20ac30.3 million) and social security contributions include \u20ac774 thousand government grants (2021: \u20ac877 thousand) as further disclosed in note 3.10 Government grants.
The increase in employee benefits expense is directly related to the increasing number of clubs and the decrease in government grants.
In the year under review, the average number of employees calculated on a full-time equivalent ('FTE')basis was 4,145 (2021: 3,373).
| Average number FTE during the year | 2022 | 2021 |
|---|---|---|
| Benelux | 1,867 | 1,697 |
| France, Spain & Germany | 2,278 | 1,676 |
| Total | 4,145 | 3,373 |
| \u00a0 | \u00a0 | \u00a0 |
| Club | 3,539 | 2,849 |
| Headquarters | 606 | 524 |
| Total | 4,145 | 3,373 |
Salaries, wages and social security contributions are charged to statement of profit or loss based on the terms of employment, where they are due to employees and the tax authorities respectively.
The Group operates a number of defined contribution pension plans. A defined contribution plan is a pension plan under which the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as an employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Depreciation of property, plant and equipment | (151,134) | (125,186) |
| Depreciation of right-of-use assets | (171,566) | (147,737) |
| Amortisation of other intangible assets | (8,689) | (10,846) |
| Impairment of property, plant and equipment | - | (112) |
| Total | (331,389) | (283,881) |
The increase in depreciation charges is directly related to the increasing number of clubs.
Reference is made to note 4.2 Other intangible assets, note 4.3 Property, plant and equipment and note 4.4 Right-of-use assets and lease liabilities.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Other personnel expenses | (21,849) | (12,409) |
| Housing expenses | (122,176) | (86,755) |
| Net marketing expenses | (47,162) | (16,982) |
| Write-off of bad debts, incl. collection agency costs | (13,827) | (19,742) |
| Short-term and low-value lease expenses and other lease adjustments1 | (1,649) | (1,079) |
| Other car expenses | (1,596) | (992) |
| Overhead and administrative expenses | (35,920) | (28,736) |
| Total | (244,179) | (166,695) |
The increase in other operating expenses is directly related to the increasing number of clubs.
Expenses arising from the Group\u2019s business operations are accounted for in the year incurred. Marketing expenses arising from the Group\u2019s business operations are accounted for in the year incurred. The Group receives marketing contributions from its main suppliers of fitness equipment based on separate marketing contribution agreements that are unrelated to the purchase of fitness equipment from these suppliers, and therefore qualify as distinct services. The amount of the contribution is determined between the Group and the relevant suppliers by evaluating the joint marketing efforts. The Group recognises these contributions as a reduction against the marketing expenses in the statement of profit or loss, as these are reimbursements for joint marketing costs incurred by the Group.
", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-490": { "value": "Accounting policy Cost of consumables used are accounted for in the year incurred. Accounting policy Salaries, wages and social security contributions are charged to statement of profit or loss based on the terms of employment, where they are due to employees and the tax authorities respectively. The Group operates a number of defined contribution pension plans. A defined contribution plan is a pension plan under which the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as an employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. Accounting policy The Group has a number of equity-settled share-based payment plans, under which the Management Board members and selected eligible em\u00adploy\u00adees perform services in exchange for equity instruments of the Company. The total amount to be expensed for services performed is determined by reference to the grant date fair value of the share-based payment awards made, including the impact of any non-vesting conditions and market conditions. The fair value determined at the grant date is expensed on a straight-line basis over the three-year vesting period, based on the Group's estimate of the number of awards that will eventually vest, with a cor\u00adre\u00adspond\u00ading credit to equity. If applicable, the difference between the amount based on the estimated number of shares awarded and the amount based on the actual number of shares awarded that vest is recognised in the consolidated statement of profit or loss in the financial year in which the shares awarded vest. Service conditions and non-market performance conditions are taken into account in the number of awards expected to vest. At each reporting date, the Group revises its estimates of the number of awards that are expected to vest. The impact of the revision of vesting estimates, if any, is recog\u00adnised in the consolidated statement of profit or loss for the period. Accounting policy Expenses arising from the Group\u2019s business operations are accounted for in the year incurred. Marketing expenses arising from the Group\u2019s business operations are accounted for in the year incurred. The Group receives marketing contributions from its main suppliers of fitness equipment based on separate marketing contribution agreements that are unrelated to the purchase of fitness equipment from these suppliers, and therefore qualify as distinct services. The amount of the contribution is determined between the Group and the relevant suppliers by evaluating the joint marketing efforts. The Group recognises these contributions as a reduction against the marketing expenses in the statement of profit or loss, as these are reimbursements for joint marketing costs incurred by the Group. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-336": { "value": "Employee benefits expense can be broken down as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Salaries and wages (including share-based payments)1 | (120,998) | (64,804) |
| Social security contributions | (24,527) | (15,112) |
| Pension costs \u2013 defined contribution plans | (2,254) | (1,590) |
| Total | (147,779) | (81,506) |
Salaries and wages include \u20ac29 thousand government grants (2021: \u20ac30.3 million) and social security contributions include \u20ac774 thousand government grants (2021: \u20ac877 thousand) as further disclosed in note 3.10 Government grants.
The increase in employee benefits expense is directly related to the increasing number of clubs and the decrease in government grants.
In the year under review, the average number of employees calculated on a full-time equivalent ('FTE')basis was 4,145 (2021: 3,373).
| Average number FTE during the year | 2022 | 2021 |
|---|---|---|
| Benelux | 1,867 | 1,697 |
| France, Spain & Germany | 2,278 | 1,676 |
| Total | 4,145 | 3,373 |
| \u00a0 | \u00a0 | \u00a0 |
| Club | 3,539 | 2,849 |
| Headquarters | 606 | 524 |
| Total | 4,145 | 3,373 |
Salaries, wages and social security contributions are charged to statement of profit or loss based on the terms of employment, where they are due to employees and the tax authorities respectively.
The Group operates a number of defined contribution pension plans. A defined contribution plan is a pension plan under which the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as an employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-338": { "value": "In the year under review, the average number of employees calculated on a full-time equivalent ('FTE')basis was 4,145 (2021: 3,373).
| Average number FTE during the year | 2022 | 2021 |
|---|---|---|
| Benelux | 1,867 | 1,697 |
| France, Spain & Germany | 2,278 | 1,676 |
| Total | 4,145 | 3,373 |
| \u00a0 | \u00a0 | \u00a0 |
| Club | 3,539 | 2,849 |
| Headquarters | 606 | 524 |
| Total | 4,145 | 3,373 |
The major components of income tax expense for the years 2022 and 2021 are as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Current income tax: | \u00a0 | \u00a0 |
| Current income tax charge | (2,900) | (963) |
| \u00a0 | (2,900) | (963) |
| Deferred income tax: | \u00a0 | \u00a0 |
| Change in deferred tax asset for carry-forward losses available for offsetting against future taxable income | 158 | 51,022 |
| Changes in other deferred tax assets and liabilities recognised in profit or loss | 2,196 | 1,245 |
| \u00a0 | 2,354 | 52,267 |
| Total income tax | (546) | 51,304 |
In 2022, all aggregate current and deferred taxes arising in the reporting period have been recognised in the consolidated statement of profit or loss.
In 2021, an amount of \u20ac16.2 million in deferred taxes relating to the issue of convertible bonds has been directly debited to equity and an amount of \u20ac1.0 million in deferred taxes relating to incremental costs directly attributable to the newly issued shares has been directly credited to equity. All other current and deferred taxes arising in the reporting period have been recognised in the consolidated statement of profit or loss.
The effective income tax amount on the Group\u2019s profit before tax differs from the statutory income tax amount that would arise using the applicable statutory income tax rate. This difference is reconciled below.
| \u00a0 | 2022 | % | 2021 | % |
|---|---|---|---|---|
| Profit (loss) before income tax | (3,141) | \u00a0 | (201,352) | \u00a0 |
| Income tax based on Basic-Fit\u2019s domestic rate | 810 | 25.8% | 50,338 | 25.0% |
| Effects of tax rates in foreign jurisdictions | 210 | 6.7% | 818 | 0.4% |
| Adjustments in respect of prior years\u2019 current and deferred taxes | 81 | 2.6% | (30) | 0.0% |
| Remeasurement of deferred tax assets and liabilities | 11 | 0.4% | (935) | (0.5)% |
| Impact CVAE tax France | (1,712) | (54.5)% | (684) | (0.3)% |
| Recognition of previously unrecognised deferred tax assets and liabilities | 357 | 11.4% | - | 0.0% |
| Future tax rate adjustments | - | 0.0% | 1,483 | 0.7% |
| Impact of tax incentives | 98 | 3.1% | 137 | 0.1% |
| Impact of non-taxable government grants | - | 0.0% | 409 | 0.2% |
| Non-deductible expenses for tax purposes: | \u00a0 | 0.0% | \u00a0 | 0.0% |
| Share-based payments | (7) | (0.2)% | (87) | 0.0% |
| Other non-deductible expenses | (394) | (12.5)% | (145) | (0.1)% |
| At the effective income tax rate | (546) | (17.4)% | 51,304 | 25.5% |
Income tax based on Basic-Fit\u2019s domestic rate
The income tax based on Basic-Fit\u2019s domestic rate is based on the Dutch statutory income tax rate of 25.8% (2021: 25.0%). This reflects the income tax that would have been applicable assuming that all its result were to be taxable at the Dutch statutory tax rate and there were no permanent differences between taxable base and financial results and no Dutch tax incentives were applied.
Effects of tax rates in foreign jurisdictions
This reflects that a portion of Basic-Fit\u2019s result is realised in countries other than the Netherlands where different tax rates are applicable.
Adjustments in respect of prior years\u2019 current and deferred taxes
The movements in the adjustments in respect of prior years\u2019 current and deferred taxes for the years 2021 and 2022 relate to differences between the estimated income taxes and final corporate income tax returns.
Remeasurement of deferred tax assets and liabilities
These remeasurement of deferred tax assets and liabilities relates to adjustments in deferred tax assets and liabilities calculated at future tax rates, while the effective tax rate is calculated at the current tax rate (in 2021) and other minor remeasurements (in 2021 and 2022).
Impact CVAE tax France
CVAE ('Cotisation sur la Valeur Ajout\u00e9e des Entreprises') is a corporate value-added contribution in France that meets, based on the Group\u2019s analysis, the definition of an income tax as established under IAS 12. The current income tax charge includes an amount of \u20ac2,262 thousand (2021: \u20ac931 thousand) related to the CVAE tax in France. As the CVAE tax is deductible for French corporate income tax calculation, the net impact as reflected in the effective tax reconciliation is \u20ac1,712 thousand (2021: \u20ac684 thousand)
Recognition of previously unrecognised deferred tax assets and liabilities
Basic-Fit succesfully reached an agreement with the French tax authorities related to \u20ac1.4 million in carry-forward losses as part of an acquisition in 2019. As a result of this agreement, these losses can be used to offset against future taxable profits.
Future tax rate adjustments
As a result of tax reforms in the Netherlands, Basic-Fit remeasured deferred tax assets and liabilities in 2021. Tax reform plans are taken into account as soon as the plans are substantively enacted. In December 2021, the Dutch government increased the tax rate from 25.0 % to 25.8% as of 2022.\u00a0
Impact of tax incentives
Adjustments in respect of tax incentives mainly relate to (energy) investment allowances in the Netherlands and Luxembourg. Furthermore, this item includes the stepped tax that is applicable in some countries where a certain threshold is taxable at a lower tax rate than the remaining result.
Impact of non-taxable government grants
Adjustments in respect of non-taxable government grants relates to government grants received in the Netherlands and France that are excluded from taxable income.
Non-deductible expenses for tax purposes
Non-deductible expenses for tax purposes reflects the impact of permanent non-tax-deductible items such as share-based payment expenses and other non-deductible or partly deductible expenses, such as meals and entertainment expenses.
A breakdown of current income tax receivable and current income tax payable per country is as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Belgium | 12 | - |
| Luxembourg | 116 | 112 |
| France1 | - | 75 |
| Total Income tax receivable | 128 | 187 |
| \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | 2022 | 2021 |
| Belgium | 40 | 19 |
| France1 | 1,822 | - |
| Spain | - | 3 |
| Total Income tax payable | 1,862 | 22 |
Deferred taxes relate to the following:
| \u00a0 | Consolidated statement of financial position at 31 December | Consolidated statement of comprehensive income | ||
|---|---|---|---|---|
| \u00a0 | 2022 | 2021 | 2022 | 2021 |
| Losses available for offsetting against future taxable income | 94,090 | 93,932 | 158 | 51,022 |
| Tax incentives (investment allowance) | 779 | 717 | 62 | 71 |
| Purchase price allocation | (6,106) | (6,777) | 700 | 846 |
| Goodwill amortisation for tax purposes | (13,327) | (11,999) | (1,328) | (1,888) |
| Leases | 17,085 | 15,185 | 1,900 | 2,553 |
| Convertible bonds | (13,644) | (15,704) | 2,060 | 536 |
| Valuation of property, plant and equipment | 241 | 817 | (526) | (332) |
| Timing of expense recognition | 154 | (130) | 284 | (105) |
| Derivative financial instruments | (528) | 428 | (956) | (436) |
| Deferred tax benefit/(expense) | \u00a0 | \u00a0 | 2,354 | 52,267 |
| Net deferred tax assets/(liabilities) | 78,744 | 76,469 | \u00a0 | \u00a0 |
This is reflected in the statement of comprehensive income as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Statement of profit or loss | 2,354 | 52,267 |
| Statement of other comprehensive income | - | - |
| Total | 2,354 | 52,267 |
After netting deferred tax assets and deferred tax liabilities within the same tax entity for an amount of \u20ac34.7 million (2021: \u20ac35.3 million), these positions are as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Deferred tax assets | 78,744 | 76,469 |
| Deferred tax liabilities | - | - |
| Net deferred tax assets (liabilities) | 78,744 | 76,469 |
The following table presents the expected timing of the reversal of deferred tax assets and liabilities:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| To be recovered within 12 months | 7,786 | 1,681 |
| To be recovered after more than 12 months | 70,958 | 74,788 |
| Total | 78,744 | 76,469 |
The gross movement on the deferred income tax account is as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Opening balance as at 1 January | 76,469 | 39,396 |
| Income tax benefit during the period recognised in profit or loss | 2,354 | 52,267 |
| Deferred taxes acquired in business combinations | (79) | - |
| Deferred taxes recognised directly in equity | - | (15,194) |
| Closing balance as at 31 December | 78,744 | 76,469 |
As at 31 December 2022, Basic-Fit recognised \u20ac94.1 million (2021: \u20ac93.9 million) deferred tax assets for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies. In evaluating whether it is probable that sufficient taxable income will be generated to realise the benefit of these deferred income tax assets, the Group considered all available evidence, including forecasts, business plans and appropriate tax planning measures.
The Group took into account examples of positive evidence to support an assertion that it is probable that taxable profits will be available:
Losses occurred due to identifiable one-time/non-recurring events (COVID-19);
A strong earnings history exclusive of the loss that created the unused tax loss carried forward;
Convincing tax planning strategies;
The business generates sustainable profit margins which are sufficient to enable the Group to utilise existing tax losses carried forward and which can be utilised for that purpose (e.g. in the same tax jurisdiction).
Conversely, the following examples of negative evidence that may indicate that it is not probable that future taxable profits will be available are not applicable to Basic-Fit:
A recent history of operating losses for tax purposes;
The taxable entity is a start-up business;
History of significant variances of actual outcomes against business plans;
Losses of major customers and/or of significant contracts;
Uncertainty regarding the company's going concern status;
History of restructuring without returning to profitability or emerging from a bankruptcy;
The taxable entity expects losses in early future years;
The taxable entity has a history of unused tax losses and/or credits expiring; and
The losses relate to the core activity of the company and thus may reoccur in the future.
Deferred tax assets have been recognised for all loss carry-forwards of the tax jurisdictions HealthCity Belgi\u00eb N.V., Basic-Fit Belgium B.V., Basic-Fit Luxembourg S.A., Basic Fit II S.A., Basic-Fit Germany GmbH and the fiscal unity in the Netherlands consisting of Basic-Fit N.V., Basic Fit International B.V., Basic Fit Nederland\u00a0B.V. and BF Developments. Based on the budget for 2023 onwards for these jurisdictions, and with reference to the assumptions and significant judgements as described above, it is considered more likely than not that these entities will be able to offset the loss carry-forwards in the coming eight years, taking into account temporary differences. In assessing whether it is probable that sufficient future taxable profits will be available, it has been taken into account that the entities have a track record of taxable income in past years (before COVID-19). Furthermore, it is noted that most of the losses are due to an identifiable non-recurring event, namely the COVID-19 pandemic, or due to start-up losses related to Basic-Fit Germany GmbH.
Furthermore, deferred tax assets have been recognised for part of the loss carry-forwards of Basic-Fit Spain S.A. Most of the loss carry-forwards of Basic-Fit Spain S.A. were incurred in the period before the company started operating under the Basic-Fit brand (by the end of 2013, with 17 clubs). Based on the budget for 2023 onwards and with reference to the sections above, the Group expects to be able to offset at least part of the losses against taxable profits in the coming years. In assessing whether it is probable that sufficient future taxable profits will be available, it has been taken into account that Basic-Fit Spain S.A. has a track record of taxable income in past years (before COVID-19, but also in 2022). A deferred tax asset is recognised for the expected recovery of losses in the coming eight years. Basic-Fit will evaluate from year to year whether to recognise more of the currently unrecognised tax loss carry-forwards related to Basic-Fit Spain S.A., which will result in a higher deferred tax asset. Such recognition of a deferred tax asset will result in lower (deferred) income tax in the consolidated statement of profit or loss and therefore higher profit in the year of recognition.
In total, no deferred tax assets have been recognised for gross loss tax carry-forwards amounting to \u20ac43.2 million (2021: \u20ac43.2 million), mainly related to Basic-Fit Spain S.A. There are no restrictions on the expiration of these tax loss carry-forwards.
The income tax expense or credit for the period is the tax payable or receivable on the current period\u2019s taxable result, based on the applicable income tax rate for each jurisdiction adjusted for changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and amends tax assets and liabilities where appropriate.
Current tax assets and tax liabilities are offset when the entity has a legally enforceable right to offset and intends either to settle on a net basis or realise the asset and settle the liability simultaneously.
Deferred income tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Nor is the deferred income tax accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss and at the time of the transaction does not give rise to equal amounts of taxable and deductible temporary differences. Deferred income tax is determined using tax rates (and laws) that have been enacted, or substantially enacted, by the end of the reporting period, and are expected to apply when the related deferred income tax asset is realised,or the deferred income tax liability is settled.
Deferred tax assets are recognised for unused tax losses, deductible temporary tax differences, and tax credits to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the likely timing and level of future taxable profits, together with future tax planning strategies.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the Group is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities, and when the deferred income tax assets and liabilities relate to income taxes levied by the same tax authority on either the taxable entity or different taxable entities, where there is an intention to settle the balances on a net basis.
The Group is subject to income taxes in the Netherlands and a number of other jurisdictions. Judgement is required to determine current tax expenses, uncertain tax positions, deferred tax assets and deferred tax liabilities, plus the extent to which deferred tax assets can be recognised. Estimates are based on forecast future taxable income and tax planning strategies. The utilisation of deferred tax assets is dependent on future taxable profit in excess of the profit arising from the reversal of existing taxable temporary differences. The recognition of deferred tax assets is based on the assessment of whether it is more likely than not that sufficient taxable profit will be available in the future to utilise the reversal of temporary differences and tax losses. Recognition of deferred tax assets involves judgement regarding the future financial performance of the particular legal entity or tax group that has recognised the deferred tax asset.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-354": { "value": "The major components of income tax expense for the years 2022 and 2021 are as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Current income tax: | \u00a0 | \u00a0 |
| Current income tax charge | (2,900) | (963) |
| \u00a0 | (2,900) | (963) |
| Deferred income tax: | \u00a0 | \u00a0 |
| Change in deferred tax asset for carry-forward losses available for offsetting against future taxable income | 158 | 51,022 |
| Changes in other deferred tax assets and liabilities recognised in profit or loss | 2,196 | 1,245 |
| \u00a0 | 2,354 | 52,267 |
| Total income tax | (546) | 51,304 |
In 2022, all aggregate current and deferred taxes arising in the reporting period have been recognised in the consolidated statement of profit or loss.
In 2021, an amount of \u20ac16.2 million in deferred taxes relating to the issue of convertible bonds has been directly debited to equity and an amount of \u20ac1.0 million in deferred taxes relating to incremental costs directly attributable to the newly issued shares has been directly credited to equity. All other current and deferred taxes arising in the reporting period have been recognised in the consolidated statement of profit or loss.
The effective income tax amount on the Group\u2019s profit before tax differs from the statutory income tax amount that would arise using the applicable statutory income tax rate. This difference is reconciled below.
| \u00a0 | 2022 | % | 2021 | % |
|---|---|---|---|---|
| Profit (loss) before income tax | (3,141) | \u00a0 | (201,352) | \u00a0 |
| Income tax based on Basic-Fit\u2019s domestic rate | 810 | 25.8% | 50,338 | 25.0% |
| Effects of tax rates in foreign jurisdictions | 210 | 6.7% | 818 | 0.4% |
| Adjustments in respect of prior years\u2019 current and deferred taxes | 81 | 2.6% | (30) | 0.0% |
| Remeasurement of deferred tax assets and liabilities | 11 | 0.4% | (935) | (0.5)% |
| Impact CVAE tax France | (1,712) | (54.5)% | (684) | (0.3)% |
| Recognition of previously unrecognised deferred tax assets and liabilities | 357 | 11.4% | - | 0.0% |
| Future tax rate adjustments | - | 0.0% | 1,483 | 0.7% |
| Impact of tax incentives | 98 | 3.1% | 137 | 0.1% |
| Impact of non-taxable government grants | - | 0.0% | 409 | 0.2% |
| Non-deductible expenses for tax purposes: | \u00a0 | 0.0% | \u00a0 | 0.0% |
| Share-based payments | (7) | (0.2)% | (87) | 0.0% |
| Other non-deductible expenses | (394) | (12.5)% | (145) | (0.1)% |
| At the effective income tax rate | (546) | (17.4)% | 51,304 | 25.5% |
Income tax based on Basic-Fit\u2019s domestic rate
The income tax based on Basic-Fit\u2019s domestic rate is based on the Dutch statutory income tax rate of 25.8% (2021: 25.0%). This reflects the income tax that would have been applicable assuming that all its result were to be taxable at the Dutch statutory tax rate and there were no permanent differences between taxable base and financial results and no Dutch tax incentives were applied.
Effects of tax rates in foreign jurisdictions
This reflects that a portion of Basic-Fit\u2019s result is realised in countries other than the Netherlands where different tax rates are applicable.
Adjustments in respect of prior years\u2019 current and deferred taxes
The movements in the adjustments in respect of prior years\u2019 current and deferred taxes for the years 2021 and 2022 relate to differences between the estimated income taxes and final corporate income tax returns.
Remeasurement of deferred tax assets and liabilities
These remeasurement of deferred tax assets and liabilities relates to adjustments in deferred tax assets and liabilities calculated at future tax rates, while the effective tax rate is calculated at the current tax rate (in 2021) and other minor remeasurements (in 2021 and 2022).
Impact CVAE tax France
CVAE ('Cotisation sur la Valeur Ajout\u00e9e des Entreprises') is a corporate value-added contribution in France that meets, based on the Group\u2019s analysis, the definition of an income tax as established under IAS 12. The current income tax charge includes an amount of \u20ac2,262 thousand (2021: \u20ac931 thousand) related to the CVAE tax in France. As the CVAE tax is deductible for French corporate income tax calculation, the net impact as reflected in the effective tax reconciliation is \u20ac1,712 thousand (2021: \u20ac684 thousand)
Recognition of previously unrecognised deferred tax assets and liabilities
Basic-Fit succesfully reached an agreement with the French tax authorities related to \u20ac1.4 million in carry-forward losses as part of an acquisition in 2019. As a result of this agreement, these losses can be used to offset against future taxable profits.
Future tax rate adjustments
As a result of tax reforms in the Netherlands, Basic-Fit remeasured deferred tax assets and liabilities in 2021. Tax reform plans are taken into account as soon as the plans are substantively enacted. In December 2021, the Dutch government increased the tax rate from 25.0 % to 25.8% as of 2022.\u00a0
Impact of tax incentives
Adjustments in respect of tax incentives mainly relate to (energy) investment allowances in the Netherlands and Luxembourg. Furthermore, this item includes the stepped tax that is applicable in some countries where a certain threshold is taxable at a lower tax rate than the remaining result.
Impact of non-taxable government grants
Adjustments in respect of non-taxable government grants relates to government grants received in the Netherlands and France that are excluded from taxable income.
Non-deductible expenses for tax purposes
Non-deductible expenses for tax purposes reflects the impact of permanent non-tax-deductible items such as share-based payment expenses and other non-deductible or partly deductible expenses, such as meals and entertainment expenses.
A breakdown of current income tax receivable and current income tax payable per country is as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Belgium | 12 | - |
| Luxembourg | 116 | 112 |
| France1 | - | 75 |
| Total Income tax receivable | 128 | 187 |
| \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | 2022 | 2021 |
| Belgium | 40 | 19 |
| France1 | 1,822 | - |
| Spain | - | 3 |
| Total Income tax payable | 1,862 | 22 |
Deferred taxes relate to the following:
| \u00a0 | Consolidated statement of financial position at 31 December | Consolidated statement of comprehensive income | ||
|---|---|---|---|---|
| \u00a0 | 2022 | 2021 | 2022 | 2021 |
| Losses available for offsetting against future taxable income | 94,090 | 93,932 | 158 | 51,022 |
| Tax incentives (investment allowance) | 779 | 717 | 62 | 71 |
| Purchase price allocation | (6,106) | (6,777) | 700 | 846 |
| Goodwill amortisation for tax purposes | (13,327) | (11,999) | (1,328) | (1,888) |
| Leases | 17,085 | 15,185 | 1,900 | 2,553 |
| Convertible bonds | (13,644) | (15,704) | 2,060 | 536 |
| Valuation of property, plant and equipment | 241 | 817 | (526) | (332) |
| Timing of expense recognition | 154 | (130) | 284 | (105) |
| Derivative financial instruments | (528) | 428 | (956) | (436) |
| Deferred tax benefit/(expense) | \u00a0 | \u00a0 | 2,354 | 52,267 |
| Net deferred tax assets/(liabilities) | 78,744 | 76,469 | \u00a0 | \u00a0 |
This is reflected in the statement of comprehensive income as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Statement of profit or loss | 2,354 | 52,267 |
| Statement of other comprehensive income | - | - |
| Total | 2,354 | 52,267 |
After netting deferred tax assets and deferred tax liabilities within the same tax entity for an amount of \u20ac34.7 million (2021: \u20ac35.3 million), these positions are as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Deferred tax assets | 78,744 | 76,469 |
| Deferred tax liabilities | - | - |
| Net deferred tax assets (liabilities) | 78,744 | 76,469 |
The following table presents the expected timing of the reversal of deferred tax assets and liabilities:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| To be recovered within 12 months | 7,786 | 1,681 |
| To be recovered after more than 12 months | 70,958 | 74,788 |
| Total | 78,744 | 76,469 |
The gross movement on the deferred income tax account is as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Opening balance as at 1 January | 76,469 | 39,396 |
| Income tax benefit during the period recognised in profit or loss | 2,354 | 52,267 |
| Deferred taxes acquired in business combinations | (79) | - |
| Deferred taxes recognised directly in equity | - | (15,194) |
| Closing balance as at 31 December | 78,744 | 76,469 |
As at 31 December 2022, Basic-Fit recognised \u20ac94.1 million (2021: \u20ac93.9 million) deferred tax assets for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies. In evaluating whether it is probable that sufficient taxable income will be generated to realise the benefit of these deferred income tax assets, the Group considered all available evidence, including forecasts, business plans and appropriate tax planning measures.
The Group took into account examples of positive evidence to support an assertion that it is probable that taxable profits will be available:
Losses occurred due to identifiable one-time/non-recurring events (COVID-19);
A strong earnings history exclusive of the loss that created the unused tax loss carried forward;
Convincing tax planning strategies;
The business generates sustainable profit margins which are sufficient to enable the Group to utilise existing tax losses carried forward and which can be utilised for that purpose (e.g. in the same tax jurisdiction).
Conversely, the following examples of negative evidence that may indicate that it is not probable that future taxable profits will be available are not applicable to Basic-Fit:
A recent history of operating losses for tax purposes;
The taxable entity is a start-up business;
History of significant variances of actual outcomes against business plans;
Losses of major customers and/or of significant contracts;
Uncertainty regarding the company's going concern status;
History of restructuring without returning to profitability or emerging from a bankruptcy;
The taxable entity expects losses in early future years;
The taxable entity has a history of unused tax losses and/or credits expiring; and
The losses relate to the core activity of the company and thus may reoccur in the future.
Deferred tax assets have been recognised for all loss carry-forwards of the tax jurisdictions HealthCity Belgi\u00eb N.V., Basic-Fit Belgium B.V., Basic-Fit Luxembourg S.A., Basic Fit II S.A., Basic-Fit Germany GmbH and the fiscal unity in the Netherlands consisting of Basic-Fit N.V., Basic Fit International B.V., Basic Fit Nederland\u00a0B.V. and BF Developments. Based on the budget for 2023 onwards for these jurisdictions, and with reference to the assumptions and significant judgements as described above, it is considered more likely than not that these entities will be able to offset the loss carry-forwards in the coming eight years, taking into account temporary differences. In assessing whether it is probable that sufficient future taxable profits will be available, it has been taken into account that the entities have a track record of taxable income in past years (before COVID-19). Furthermore, it is noted that most of the losses are due to an identifiable non-recurring event, namely the COVID-19 pandemic, or due to start-up losses related to Basic-Fit Germany GmbH.
Furthermore, deferred tax assets have been recognised for part of the loss carry-forwards of Basic-Fit Spain S.A. Most of the loss carry-forwards of Basic-Fit Spain S.A. were incurred in the period before the company started operating under the Basic-Fit brand (by the end of 2013, with 17 clubs). Based on the budget for 2023 onwards and with reference to the sections above, the Group expects to be able to offset at least part of the losses against taxable profits in the coming years. In assessing whether it is probable that sufficient future taxable profits will be available, it has been taken into account that Basic-Fit Spain S.A. has a track record of taxable income in past years (before COVID-19, but also in 2022). A deferred tax asset is recognised for the expected recovery of losses in the coming eight years. Basic-Fit will evaluate from year to year whether to recognise more of the currently unrecognised tax loss carry-forwards related to Basic-Fit Spain S.A., which will result in a higher deferred tax asset. Such recognition of a deferred tax asset will result in lower (deferred) income tax in the consolidated statement of profit or loss and therefore higher profit in the year of recognition.
In total, no deferred tax assets have been recognised for gross loss tax carry-forwards amounting to \u20ac43.2 million (2021: \u20ac43.2 million), mainly related to Basic-Fit Spain S.A. There are no restrictions on the expiration of these tax loss carry-forwards.
The income tax expense or credit for the period is the tax payable or receivable on the current period\u2019s taxable result, based on the applicable income tax rate for each jurisdiction adjusted for changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and amends tax assets and liabilities where appropriate.
Current tax assets and tax liabilities are offset when the entity has a legally enforceable right to offset and intends either to settle on a net basis or realise the asset and settle the liability simultaneously.
Deferred income tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Nor is the deferred income tax accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss and at the time of the transaction does not give rise to equal amounts of taxable and deductible temporary differences. Deferred income tax is determined using tax rates (and laws) that have been enacted, or substantially enacted, by the end of the reporting period, and are expected to apply when the related deferred income tax asset is realised,or the deferred income tax liability is settled.
Deferred tax assets are recognised for unused tax losses, deductible temporary tax differences, and tax credits to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the likely timing and level of future taxable profits, together with future tax planning strategies.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the Group is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities, and when the deferred income tax assets and liabilities relate to income taxes levied by the same tax authority on either the taxable entity or different taxable entities, where there is an intention to settle the balances on a net basis.
The Group is subject to income taxes in the Netherlands and a number of other jurisdictions. Judgement is required to determine current tax expenses, uncertain tax positions, deferred tax assets and deferred tax liabilities, plus the extent to which deferred tax assets can be recognised. Estimates are based on forecast future taxable income and tax planning strategies. The utilisation of deferred tax assets is dependent on future taxable profit in excess of the profit arising from the reversal of existing taxable temporary differences. The recognition of deferred tax assets is based on the assessment of whether it is more likely than not that sufficient taxable profit will be available in the future to utilise the reversal of temporary differences and tax losses. Recognition of deferred tax assets involves judgement regarding the future financial performance of the particular legal entity or tax group that has recognised the deferred tax asset.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-355": { "value": " Income tax receivable/payable A breakdown of current income tax receivable and current income tax payable per country is as follows: \u00a02022 2021 Belgium 12 - Luxembourg 116 112 France1 - 75 Total Income tax receivable 128 187 \u00a0\u00a0\u00a0\u00a02022 2021 Belgium 40 19 France1 1,822 - Spain - 3 Total Income tax payable 1,862 22 Including CVAE ", "dimensions": { "concept": "ifrs-full:DisclosureOfTaxReceivablesAndPayablesExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-504": { "value": "Accounting policy The income tax expense or credit for the period is the tax payable or receivable on the current period\u2019s taxable result, based on the applicable income tax rate for each jurisdiction adjusted for changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. Current income tax Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and amends tax assets and liabilities where appropriate. Current tax assets and tax liabilities are offset when the entity has a legally enforceable right to offset and intends either to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax Deferred income tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Nor is the deferred income tax accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss and at the time of the transaction does not give rise to equal amounts of taxable and deductible temporary differences. Deferred income tax is determined using tax rates (and laws) that have been enacted, or substantially enacted, by the end of the reporting period, and are expected to apply when the related deferred income tax asset is realised,or the deferred income tax liability is settled. Deferred tax assets are recognised for unused tax losses, deductible temporary tax differences, and tax credits to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the likely timing and level of future taxable profits, together with future tax planning strategies. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the Group is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities, and when the deferred income tax assets and liabilities relate to income taxes levied by the same tax authority on either the taxable entity or different taxable entities, where there is an intention to settle the balances on a net basis. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-506": { "value": "The income tax expense or credit for the period is the tax payable or receivable on the current period\u2019s taxable result, based on the applicable income tax rate for each jurisdiction adjusted for changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. Deferred income tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Nor is the deferred income tax accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss and at the time of the transaction does not give rise to equal amounts of taxable and deductible temporary differences. Deferred income tax is determined using tax rates (and laws) that have been enacted, or substantially enacted, by the end of the reporting period, and are expected to apply when the related deferred income tax asset is realised,or the deferred income tax liability is settled. Deferred tax assets are recognised for unused tax losses, deductible temporary tax differences, and tax credits to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the likely timing and level of future taxable profits, together with future tax planning strategies. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the Group is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities, and when the deferred income tax assets and liabilities relate to income taxes levied by the same tax authority on either the taxable entity or different taxable entities, where there is an intention to settle the balances on a net basis. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-359": { "value": " 3.10 Government grants Wage subsidy programmes Wage subsidy and other support programmes are accounted for in accordance with IAS 20 \u2018Accounting for Government Grants and Disclosure of Government Assistance\u2019. In 2022, Basic-Fit received \u20ac803 thousand (2021: \u20ac31.2 million, reducing employees benefits expense as disclosed in note 3.4 Employee benefits expense). General state aid Other operating income includes \u20ac403 thousand (2021: \u20ac1.1 million) related to cost compensation programmes offered by the Dutch, Belgian, German and Spanish governments. Furthermore, in 2022, Basic-Fit recognised a (negative) correction of \u20ac74 thousand related government grants as part of financial rescue packages offered by the French government in response to the outbreak of the COVID-19 pandemic (2021: \u20ac34.4 million recognised as \u2018Other operating income\u2019 in note 3.7 Other operating income). Accounting policy Government grants are recognised when there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset. Government grants that are receivable as compensation for expenses or losses that have already been incurred, or for the purpose of giving immediate financial support to the Group with no related future costs, are recognised as other operating income in the period in which the grants become receivable. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGovernmentGrantsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-512": { "value": "Accounting policy Government grants are recognised when there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset. Government grants that are receivable as compensation for expenses or losses that have already been incurred, or for the purpose of giving immediate financial support to the Group with no related future costs, are recognised as other operating income in the period in which the grants become receivable. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGovernmentGrants", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-361": { "value": " 4.1 Goodwill The movement in goodwill over the years was as follows: \u00a02022 2021 As at 1 January 203,604 203,604 Acquired through business combinations1 1,239 - As at 31 December 204,843 203,604 \u00a0\u00a0\u00a0Accumulated impairment at 31 December - - Note 4.5 Business combinations Impairment testing for CGUs containing goodwill Goodwill acquired through business combinations is allocated to and monitored on the level of the five cash-generating units (CGUs) as follows: \u00a02022 2021 The Netherlands 104,021 102,782 Belgium 83,425 83,425 Luxembourg 12,595 12,595 France 1,607 1,607 Spain 3,195 3,195 Total 204,843 203,604 Fair value less costs of disposal (FVLCD) for the year ended 31 December 2022 was estimated using a discounted cash flow (DCF) analysis applying the expected cash flow approach. For this approach, management prepared two scenarios instead of a single cash flow scenario: The 'growth scenario' is based on the assumption that the Group almost doubles in terms of the number of clubs in the forecast period 2023-2027. Given the track record of the Group (from 338 to 1,200 clubs in the period 2015-2022) and Basic-Fit's growth ambitions, management considers this the most realistic scenario. The 'consolidation scenario' is based on the assumption that the Group stops opening new clubs as of 2023. In both scenarios, the EBITDA-margins are expected to increase to slightly above the EBITDA margins that are already realised in the currently mature clubs (before the impact of COVID-19) as a result of an increase in revenues (including an increase in revenue per member) and as a result of synergies on overhead and marketing costs. While many scenarios and probabilities may exist, management ultimately believes that these two scenarios reflect a representative range of possible outcomes. The calculations for these cash flow projections are based on financial budgets and business plans prepared by management and approved by the Management Board. The budgets and business plans are updated to reflect the most recent developments as at the reporting date. Management\u2019s expectations reflect the performance to the reporting date and are based on its experience in times of recession and consistent with the assumptions that a market participant would make. Based on the calculated recoverable amounts in the 2022 impairment test of the 'growth scenario', there is significant headroom1 for all CGUs (on average more than 300% of the total carrying amount2). The sensitivity analysis conducted, including a terminal growth rate of 0.0% instead of 2.0%, does not indicate that a reasonably possible change in the key assumptions on which the Group has based its determination of the recoverable amounts would result in impairment. Although the 'consolidation scenario' is considered to be less likely than the 'growth scenario', Basic-Fit also tested for impairment based on a scenario that the Group does not open any clubs as of 2023, meaning that the total number of clubs remains stable at 1,200. In this more conservative scenario, there is also ample headroom, varying from more than 40% for CGU Spain up to more than 200% for all other CGUs. A similar sensitivity analysis for the the 'consolidation scenario' as conducted for the 'growth scenario' does not indicate that a reasonably possible change in the key assumptions on which the Group has based its determination of the recoverable amounts of the 'consolidation scenario' would result in any impairment. Headroom calculated as FVLCD minus carrying amount as a percentage of the carrying amount Including goodwill Accounting policy Goodwill on the acquisition of subsidiaries is included in intangible assets. Goodwill is not amortised but is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. The Group tests goodwill and other applicable assets for impairment annually in December, or whenever management identifies conditions that may indicate a risk of impairment, by comparing their recoverable amount with their carrying amount. Goodwill is allocated to CGUs for the purpose of impairment testing. The goodwill is allocated to those CGUs, or groups of CGUs, that are expected to benefit from the business combination in which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal management purposes. Management monitors goodwill on a country basis. Therefore, goodwill has been allocated to the Netherlands, Belgium, Luxembourg, France and Spain. An impairment loss is recognised for the amount by which the asset\u2019s carrying amount exceeds its recoverable amount and is recognised immediately in the statement of profit or loss. The recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and its value in use. In estimating the recoverable amount, management is required to make an estimate of the expected future cash flows from the cash-generating unit in the forecast period and also to determine a suitable discount rate in order to calculate the present value of those cash flows. Such estimates are subject to a certain degree of judgement and uncertainty. Impairments to goodwill are not subsequently reversed. Reference is also made to note 4.5 Business combinations. Significant estimates Calculation of the recoverable amount The recoverable amount as at 31 December 2021 and 2022 was determined based on fair value less cost of disposal calculations, based on a market participant's perspective, using cash flow projections based on the financial forecast, covering a five-year period. These cash flow projections include both existing clubs and new club openings. Discount rates used are post-tax and reflect specific risks relating to the relevant operating segments and market uncertainties in general. Management considered the effects of applying a pre-tax approach and concluded that this will not materially change the outcome of the impairment test. The post-tax discount rates applied to the cash flow projections are shown in the table below. Cash flows beyond the five-year period are extrapolated using a terminal growth rate of 2.0% (2021: 0.5%) for all CGUs, which is the lowest of the current risk free rate and the long term inflation expectation. Post-tax WACC discount rate \u00a0Netherlands Belgium Luxembourg France Spain Germany 2022 10.2% 10.9% 10.2% 10.8% 12.1% 10.2% 2021 7.1% 7.6% 7.1% 7.5% 8.3% - Pre-tax WACC discount rate \u00a0Netherlands Belgium Luxembourg France Spain Germany 2022 12.7% 13.7% 13.0% 13.0% 15.1% 12.2% 2021 9.1% 9.5% 9.3% 9.2% 10.0% - Risks in relation to climate-related matters have been considered in determining the values of the key assumptions, but did not materially impact the measurement of the recoverable amount. Key assumptions used The input to the Group\u2019s key assumptions includes those that are based on non-observable market data (level 3 input in accordance with IFRS 13). The calculations of fair value less cost of disposal for the CGUs are most sensitive to the following assumptions: \u2022 Terminal growth rate; \u2022 Discount rates; \u2022 Revenue growth; and \u2022 EBITDA margin improvement. Terminal growth rate \u2013 The terminal growth rate is based on market development and industry expectations. Discount rates \u2013 The post-tax rates used to discount the projected cash flows reflect specific risks relating to relevant CGUs, based on market data in which both the cost of equity and cost of debt are derived on the basis of a peer group of companies operating in the same industry as Basic-Fit. Revenue growth \u2013 The growth rates are based on historical experience of membership developments taking into consideration the maturity of existing clubs. In addition, differences in revenue growth per CGU depend on the number of clubs we expect to open per country. The 'growth scenario' assumes a compound annual growth rate of revenues over the forecast budget period 2023-2027 of 9% (2021: 13%) for the Netherlands, 11% (2021: 15%) for Belgium, 4% (2021: 9%) for Luxembourg, 18% (2021: 27%) for France, 40% (2021: 58%) for Spain and 159% for Germany. In the 'consolidation scenario', the average annual growth rate of revenues for all CGUs is 4.9% (2021: 8.5%). After the forecast period, revenues are expected to increase by 2.0% annually in both scenarios. EBITDA margin improvement \u2013 The cash flow projections assume long term EBITDA margins in line with those already realised in the currently mature clubs (before the impact of COVID-19), with an increase as a result of synergies on overhead and marketing in the 'growth scenario' and an increase in revenue per member. 4.5 Business combinations Acquisitions in 2022 In 2022, the Group acquired four fitness clubs in the Netherlands through asset deals and one fitness club in Germany through a share deal: Acquiree/ Club location Country Deal type Month Cologne (DE) Germany Sharedeal1 March 2022 Veldhoven (NL) The Netherlands Assetdeal April 2022 Amstelveen (NL) The Netherlands Assetdeal July 2022 Rotterdam (NL) The Netherlands Assetdeal July 2022 Waalwijk (NL) The Netherlands Assetdeal July 2022 HealthCity Germany GmbH All acquisitions are considered good opportunities for further growth and with the acquisition in Germany, this meant the start for Basic-Fit in a sixth country. The total purchase price net of cash was \u20ac5.3 million, which was mostly allocated to property, plant and equipment, receivables, customer relationships and a favourable lease contract (included in right-of-use assets). The goodwill of \u20ac1.2 million represents the excess of the consideration transferred after the recognition of newly acquired net identifiable assets and liabilities totalling \u20ac4.1 million and relates to the fact that Basic-Fit foresees good opportunities on the locations and these locations fit well within the cluster strategy of the Group. Of these acquisitions, three clubs were acquired from a party related to the CEO of the Company at an acquisition price of \u20ac4.1 million (see note 8.3 Related party transactions). These transactions were made at terms equivalent to those that prevail in arm\u2019s length transactions. Acquisitions in 2021 There were no acquisitions in the year 2021. The following tables summarise the considerations paid for the acquisitions in 2022 and 2021, the fair value of assets acquired and the liabilities assumed at the acquisition date. Fair value recognised on acquisition 2022 2021 Assets \u00a0\u00a0Property, plant and equipment 2,328 - Customer relationships 293 - Favourable lease contract (right-of-use assets) 510 - Non-current financial assets 5 - Inventories and receivables 1,361 - Cash and cash equivalents 22 - Liabilities \u00a0\u00a0Other provisions (166) - Accrued expenses and deferred income (239) - Deferred income tax assets and liabilities (79) - Total identifiable net assets acquired at fair value 4,035 - Goodwill arising on acquisition 1,239 - Purchase consideration transferred 5,274 - Less: cash acquired (22) - Net outflow of cash - investing activities 5,252 - From the date of acquisition, the revenue and net income of the business combinations acquired in 2022 for the period 2022 amounts to \u20ac1.5 million and a loss of \u20ac1.1 million respectively. If the business combinations had been acquired at the start of the annual reporting period, the revenue and net income of the acquired business combinations would have been \u20ac4.1 million and a loss of \u20ac0.4 million respectively. Accounting policy Business combinations are accounted for using the acquisition method. The costs of an acquisition are measured as the aggregate of the consideration transferred, which is measured at fair value at the acquisition date and the amount of any non-controlling interest in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interest in the acquiree at fair value or at the proportionate share of the acquiree\u2019s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses. The Group determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent considerations classified as equity are not remeasured and its subsequent settlement is accounted for within equity. Contingent considerations classified as assets or liabilities that are financial instruments and within the scope of IFRS 9 Financial Instruments, are measured at fair value with the changes in fair value recognised in the statement of profit or loss in accordance with IFRS 9. Other contingent considerations that are not within the scope of IFRS 9 are measured at fair value at each reporting date with changes in fair value recognised in profit or loss. Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired exceeds the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in the excess fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group\u2019s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed of in these circumstances is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-514": { "value": "Accounting policy Goodwill on the acquisition of subsidiaries is included in intangible assets. Goodwill is not amortised but is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. The Group tests goodwill and other applicable assets for impairment annually in December, or whenever management identifies conditions that may indicate a risk of impairment, by comparing their recoverable amount with their carrying amount. Goodwill is allocated to CGUs for the purpose of impairment testing. The goodwill is allocated to those CGUs, or groups of CGUs, that are expected to benefit from the business combination in which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal management purposes. Management monitors goodwill on a country basis. Therefore, goodwill has been allocated to the Netherlands, Belgium, Luxembourg, France and Spain. An impairment loss is recognised for the amount by which the asset\u2019s carrying amount exceeds its recoverable amount and is recognised immediately in the statement of profit or loss. The recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and its value in use. In estimating the recoverable amount, management is required to make an estimate of the expected future cash flows from the cash-generating unit in the forecast period and also to determine a suitable discount rate in order to calculate the present value of those cash flows. Such estimates are subject to a certain degree of judgement and uncertainty. Impairments to goodwill are not subsequently reversed. Reference is also made to note 4.5 Business combinations. Accounting policy Business combinations are accounted for using the acquisition method. The costs of an acquisition are measured as the aggregate of the consideration transferred, which is measured at fair value at the acquisition date and the amount of any non-controlling interest in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interest in the acquiree at fair value or at the proportionate share of the acquiree\u2019s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses. The Group determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent considerations classified as equity are not remeasured and its subsequent settlement is accounted for within equity. Contingent considerations classified as assets or liabilities that are financial instruments and within the scope of IFRS 9 Financial Instruments, are measured at fair value with the changes in fair value recognised in the statement of profit or loss in accordance with IFRS 9. Other contingent considerations that are not within the scope of IFRS 9 are measured at fair value at each reporting date with changes in fair value recognised in profit or loss. Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired exceeds the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in the excess fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group\u2019s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed of in these circumstances is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-515": { "value": "Accounting policy Goodwill on the acquisition of subsidiaries is included in intangible assets. Goodwill is not amortised but is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. The Group tests goodwill and other applicable assets for impairment annually in December, or whenever management identifies conditions that may indicate a risk of impairment, by comparing their recoverable amount with their carrying amount. Goodwill is allocated to CGUs for the purpose of impairment testing. The goodwill is allocated to those CGUs, or groups of CGUs, that are expected to benefit from the business combination in which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal management purposes. Management monitors goodwill on a country basis. Therefore, goodwill has been allocated to the Netherlands, Belgium, Luxembourg, France and Spain. An impairment loss is recognised for the amount by which the asset\u2019s carrying amount exceeds its recoverable amount and is recognised immediately in the statement of profit or loss. The recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and its value in use. In estimating the recoverable amount, management is required to make an estimate of the expected future cash flows from the cash-generating unit in the forecast period and also to determine a suitable discount rate in order to calculate the present value of those cash flows. Such estimates are subject to a certain degree of judgement and uncertainty. Impairments to goodwill are not subsequently reversed. Reference is also made to note 4.5 Business combinations. Other intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset\u2019s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and its value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows, which are largely independent of the cash inflows from other assets or groups of assets (CGUs). Other intangible assets are tested for impairment as part of the CGUs and as further disclosed in note 4.1 Goodwill. Fixed assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset\u2019s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and its value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows, which are largely independent of the cash inflows from other assets or groups of assets (CGUs). Non-financial assets other than goodwill that have suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-517": { "value": "Accounting policy Goodwill on the acquisition of subsidiaries is included in intangible assets. Goodwill is not amortised but is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. The Group tests goodwill and other applicable assets for impairment annually in December, or whenever management identifies conditions that may indicate a risk of impairment, by comparing their recoverable amount with their carrying amount. Goodwill is allocated to CGUs for the purpose of impairment testing. The goodwill is allocated to those CGUs, or groups of CGUs, that are expected to benefit from the business combination in which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal management purposes. Management monitors goodwill on a country basis. Therefore, goodwill has been allocated to the Netherlands, Belgium, Luxembourg, France and Spain. An impairment loss is recognised for the amount by which the asset\u2019s carrying amount exceeds its recoverable amount and is recognised immediately in the statement of profit or loss. The recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and its value in use. In estimating the recoverable amount, management is required to make an estimate of the expected future cash flows from the cash-generating unit in the forecast period and also to determine a suitable discount rate in order to calculate the present value of those cash flows. Such estimates are subject to a certain degree of judgement and uncertainty. Impairments to goodwill are not subsequently reversed. Reference is also made to note 4.5 Business combinations. Accounting policy Business combinations are accounted for using the acquisition method. The costs of an acquisition are measured as the aggregate of the consideration transferred, which is measured at fair value at the acquisition date and the amount of any non-controlling interest in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interest in the acquiree at fair value or at the proportionate share of the acquiree\u2019s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses. The Group determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent considerations classified as equity are not remeasured and its subsequent settlement is accounted for within equity. Contingent considerations classified as assets or liabilities that are financial instruments and within the scope of IFRS 9 Financial Instruments, are measured at fair value with the changes in fair value recognised in the statement of profit or loss in accordance with IFRS 9. Other contingent considerations that are not within the scope of IFRS 9 are measured at fair value at each reporting date with changes in fair value recognised in profit or loss. Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired exceeds the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in the excess fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group\u2019s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed of in these circumstances is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-518": { "value": "Accounting policy Goodwill on the acquisition of subsidiaries is included in intangible assets. Goodwill is not amortised but is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. The Group tests goodwill and other applicable assets for impairment annually in December, or whenever management identifies conditions that may indicate a risk of impairment, by comparing their recoverable amount with their carrying amount. Goodwill is allocated to CGUs for the purpose of impairment testing. The goodwill is allocated to those CGUs, or groups of CGUs, that are expected to benefit from the business combination in which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal management purposes. Management monitors goodwill on a country basis. Therefore, goodwill has been allocated to the Netherlands, Belgium, Luxembourg, France and Spain. An impairment loss is recognised for the amount by which the asset\u2019s carrying amount exceeds its recoverable amount and is recognised immediately in the statement of profit or loss. The recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and its value in use. In estimating the recoverable amount, management is required to make an estimate of the expected future cash flows from the cash-generating unit in the forecast period and also to determine a suitable discount rate in order to calculate the present value of those cash flows. Such estimates are subject to a certain degree of judgement and uncertainty. Impairments to goodwill are not subsequently reversed. Reference is also made to note 4.5 Business combinations. Accounting policy Customer relationships and brand name Customer relationships and brand names acquired in a business combination are recognised at fair value at the acquisition date. Separately acquired customer relationships and brand names are recognised at historical cost. Customer relationships and brand names have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses. Brand names are amortised on a straight-line basis over their estimated useful life of 20 years. For customer relationships, amortisation is calculated based on the pattern of economic benefits that Basic-Fit obtains from these customer relationships. If such a pattern cannot be reliably estimated the amortisation is calculated using the straight-line method over their estimated useful lives of 7-8 years. Other intangible assets Other intangible assets are mostly software-related and are measured at cost on initial recognition. Following initial recognition, other intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is recognised in the statement of profit or loss when incurred. Costs associated with maintaining computer software programmes are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets when the following criteria are met: \u2022 it is technically feasible to complete the software product so that it will be available for use; \u2022 management intends to complete the software product and use or sell it; \u2022 there is an ability to use or sell the software product; \u2022 it can be demonstrated how the software product will generate probable future economic benefits; \u2022 adequate technical, financial and other resources to complete the development and to use or sell the software product are available; and \u2022 the expenditure attributable to the software product during its development can be reliably measured. Directly attributable costs that are capitalised as part of the software product include the software development employee costs. Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Judgement is required in evaluating whether subsequent development expenditure is to be capitalised as an internally generated intangible asset or expensed as incurred. The key elements of judgement are whether the development project will generate incremental probable future economic benefit and which projects result in substantial improvements that increase the functionality of the asset. Economic benefit is determined as either an increase in revenues or a reduction in costs. Only those projects that are a substantial improvement and that result in direct and incremental economic benefit will be capitalised. Software-as-a-Service (SaaS) arrangements are service contracts providing the Group with the right to access the cloud provider\u2019s application software over the contract period. Costs incurred to configure or customise, and the ongoing fees to obtain access to the cloud provider\u2019s application software, are recognised as operating expenses when the services are received, unless the criteria to recognise the expenditures as an intangible asset are satisfied. The useful lives of intangible assets are assessed as either finite or indefinite. The Group has assessed the remaining useful life to be finite for all recognised other intangible assets. Other intangible assets with finite lives are amortised over their useful economic lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit or loss in the expense category consistent with the function of the intangible assets. Computer software development costs recognised as assets are amortised over their estimated useful lives, which do not exceed five years. Gains or losses arising from the derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised. Other intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset\u2019s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and its value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows, which are largely independent of the cash inflows from other assets or groups of assets (CGUs). Other intangible assets are tested for impairment as part of the CGUs and as further disclosed in note 4.1 Goodwill. Non-financial assets other than goodwill that have suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period. Accounting policy Business combinations are accounted for using the acquisition method. The costs of an acquisition are measured as the aggregate of the consideration transferred, which is measured at fair value at the acquisition date and the amount of any non-controlling interest in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interest in the acquiree at fair value or at the proportionate share of the acquiree\u2019s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses. The Group determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent considerations classified as equity are not remeasured and its subsequent settlement is accounted for within equity. Contingent considerations classified as assets or liabilities that are financial instruments and within the scope of IFRS 9 Financial Instruments, are measured at fair value with the changes in fair value recognised in the statement of profit or loss in accordance with IFRS 9. Other contingent considerations that are not within the scope of IFRS 9 are measured at fair value at each reporting date with changes in fair value recognised in profit or loss. Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired exceeds the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in the excess fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group\u2019s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed of in these circumstances is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-519": { "value": "Accounting policy Customer relationships and brand name Customer relationships and brand names acquired in a business combination are recognised at fair value at the acquisition date. Separately acquired customer relationships and brand names are recognised at historical cost. Customer relationships and brand names have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses. Brand names are amortised on a straight-line basis over their estimated useful life of 20 years. For customer relationships, amortisation is calculated based on the pattern of economic benefits that Basic-Fit obtains from these customer relationships. If such a pattern cannot be reliably estimated the amortisation is calculated using the straight-line method over their estimated useful lives of 7-8 years. Other intangible assets Other intangible assets are mostly software-related and are measured at cost on initial recognition. Following initial recognition, other intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is recognised in the statement of profit or loss when incurred. Costs associated with maintaining computer software programmes are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets when the following criteria are met: \u2022 it is technically feasible to complete the software product so that it will be available for use; \u2022 management intends to complete the software product and use or sell it; \u2022 there is an ability to use or sell the software product; \u2022 it can be demonstrated how the software product will generate probable future economic benefits; \u2022 adequate technical, financial and other resources to complete the development and to use or sell the software product are available; and \u2022 the expenditure attributable to the software product during its development can be reliably measured. Directly attributable costs that are capitalised as part of the software product include the software development employee costs. Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Judgement is required in evaluating whether subsequent development expenditure is to be capitalised as an internally generated intangible asset or expensed as incurred. The key elements of judgement are whether the development project will generate incremental probable future economic benefit and which projects result in substantial improvements that increase the functionality of the asset. Economic benefit is determined as either an increase in revenues or a reduction in costs. Only those projects that are a substantial improvement and that result in direct and incremental economic benefit will be capitalised. Software-as-a-Service (SaaS) arrangements are service contracts providing the Group with the right to access the cloud provider\u2019s application software over the contract period. Costs incurred to configure or customise, and the ongoing fees to obtain access to the cloud provider\u2019s application software, are recognised as operating expenses when the services are received, unless the criteria to recognise the expenditures as an intangible asset are satisfied. The useful lives of intangible assets are assessed as either finite or indefinite. The Group has assessed the remaining useful life to be finite for all recognised other intangible assets. Other intangible assets with finite lives are amortised over their useful economic lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit or loss in the expense category consistent with the function of the intangible assets. Computer software development costs recognised as assets are amortised over their estimated useful lives, which do not exceed five years. Gains or losses arising from the derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised. Other intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset\u2019s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and its value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows, which are largely independent of the cash inflows from other assets or groups of assets (CGUs). Other intangible assets are tested for impairment as part of the CGUs and as further disclosed in note 4.1 Goodwill. Non-financial assets other than goodwill that have suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-529": { "value": "Accounting policy Property, plant and equipment is stated at historical cost less accumulated depreciation and accumulated impairment losses. Historical costs include expenditure that is directly attributable to the acquisition of the items and is calculated after deducting trade discounts. Subsequent costs are included in the asset\u2019s carrying amount, or recognised as a separate asset as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the costs of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. Depreciation is calculated using the straight-line method to allocate their costs, net of their residual values, over their estimated useful lives as follows: \u2022 Land: not depreciated \u2022 Building: 30 years; \u2022 Building improvements: 5\u201320 years; \u2022 Exercise equipment: 4\u20138 years; and \u2022 Other property, plant and equipment: 5\u201310 years. The assets\u2019 residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in Other operating income in the consolidated statement of profit or loss. Fixed assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset\u2019s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and its value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows, which are largely independent of the cash inflows from other assets or groups of assets (CGUs). Non-financial assets other than goodwill that have suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-377": { "value": " Set out below are the carrying amounts and the movements during the years of lease liabilities related to these right-of-use assets: \u00a02022 2021 As at 1 January 1,305,159 1,187,663 Additions 231,285 190,319 Remeasurements 117,045 60,890 Accretion of interest 32,573 32,922 COVID-19 rent credits received (2,415) (23,143) Payment of lease instalments (202,108) (143,492) As at 31 December 1,481,539 1,305,159 Of which: \u00a0\u00a0Non-current lease liabilities 1,265,086 1,109,022 Current lease liabilities 216,453 196,137 Remeasurements to right-of-use assets and lease liabilities are related the (periodical) indexation of leasepayments, renewals of lease contracts, as well as changes in the assumptions related to renewal options. As a result of the deferral of lease payments and rent credits received, the lease payments in 2022 as reported in the overview above (\u20ac202.1 million), are recognised in the statement of cash flows as lease liabilities interest paid (\u20ac33.4 million) and repayment of lease liability principal (\u20ac168.7 million) respectively. Lease payments in 2021 (\u20ac143.5 million), are recognised in the statement of cash flows as lease liabilities interest paid (\u20ac28.5 million) and repayment of lease liability principal (\u20ac115.0 million) respectively. The maturity analysis of lease liabilities is disclosed in note 6.4 Financial risk management. As part of its response to COVID-19, Basic-Fit negotiated rent waivers with landlords for a total amount of \u20ac2.4 million (2021: \u20ac23.1 million). This is recorded as a separate line item in the consolidated statement of profit or loss. The following amounts are recognised in profit or loss during the years related to right-of-use assets and lease liabilities: \u00a02022 2021 Depreciation expense of right-of-use assets (171,566) (147,737) Interest expense on lease liabilities (32,573) (32,922) COVID-19 rent credits 2,415 23,143 Expense relating to short-term leases1 (1,156) (391) Expense relating to leases of low-value assets1 (576) (670) Expense relating to lease recalculations and other lease related cost1 83 (18) Total amounts recognised in profit or loss (203,373) (158,595) Included in Other operating expenses The Group had total lease-related cash outflows of \u20ac203.8 million in 2022 (2021: \u20ac144.6 million). The Group also had non-cash additions to right-of-use assets and lease liabilities of \u20ac348.3 million in 2022 (2021: \u20ac251.2 million). The future cash outflows relating to leases that have not yet commenced are disclosed in note 7.2 Contingencies and commitments. 6.3 Borrowings The Group\u2018s interest-bearing borrowings at 31 December 2022 and 31 December 2021, including the movements during 2022 and 2021, are summarised in the following tables: \u00a0\u00a0\u00a0Cash settled \u00a0Other changes (non-cash) \u00a0\u00a02022 Balance as at 1 January 2022 \u00a0New loans Repayments Transaction costs \u00a0Amortisation Additions (lease liabilities) COVID-19 rent credits Accretion of interest \u00a0Balance as at 31 December 2022 Floating rate borrowings (non-current and current) \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Bank borrowings 250,000 \u00a0- - - \u00a0- - - - \u00a0250,000 Drawn revolving credit facility - \u00a0210,000 - - \u00a0- - - - \u00a0210,000 GO-C facility 40,000 \u00a0- (26,667) - \u00a0- - - - \u00a013,333 Schuldschein 83,500 \u00a0- (73,500) - \u00a0- - - - \u00a010,000 Borrowing costs (2,185) \u00a0- - - \u00a0715 - - - \u00a0(1,470) \u00a0371,315 \u00a0210,000 (100,167) - \u00a0715 - - - \u00a0481,863 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Fixed rate borrowings and lease liabilities (non-current and current) \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Convertible bonds \u2013 liability component 238,581 \u00a0- - - \u00a0- - - 8,667 \u00a0247,248 Schuldschein 8,000 \u00a0- - - \u00a0- - - - \u00a08,000 Lease liabilities 1,305,159 \u00a0- (202,108) - \u00a0- 348,330 (2,415) 32,573 \u00a01,481,539 Other bank borrowings 60 \u00a0- (60) - \u00a0- - - - \u00a0- \u00a01,551,800 \u00a0- (202,168) - \u00a0- 348,330 (2,415) 41,240 \u00a01,736,787 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01,923,115 \u00a0210,000 (302,335) - \u00a0715 348,330 (2,415) 41,240 \u00a02,218,650 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Of which: \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Non-current lease liabilities 1,109,022 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01,265,086 Non-current borrowings 517,729 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0723,778 Current lease liabilities 196,137 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0216,453 Current borrowings 100,227 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a013,333 \u00a0\u00a0\u00a0Cash settled \u00a0Other changes (non-cash) \u00a0\u00a02021 Balance as at 1 January 2021 \u00a0New loans Repayments Transaction costs \u00a0Amortisation Additions (lease liabilities) COVID-19 rent credits Accretion of interest \u00a0Balance as at 31 December 2021 Floating rate borrowings (non-current) \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Bank borrowings 250,000 \u00a0- - - \u00a0- - - - \u00a0250,000 Drawn revolving credit facility 210,500 \u00a01,997 (212,497) - \u00a0- - - - \u00a0- GO-C facility 60,000 \u00a0- (20,000) - \u00a0- - - - \u00a040,000 Bridge loan - \u00a060,000 (60,000) - \u00a0- - - - \u00a0- Schuldschein 83,500 \u00a0\u00a0- - \u00a0- - - - \u00a083,500 Borrowing costs (2,801) \u00a0- - - \u00a0616 - - - \u00a0(2,185) \u00a0601,199 \u00a061,997 (292,497) - \u00a0616 - - - \u00a0371,315 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Fixed rate borrowings and lease liabilities (non-current and current) \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Convertible bonds \u2013 liability component - \u00a0237,700 - (3,743) \u00a0- - - 4,624 \u00a0238,581 Schuldschein 8,000 \u00a0- - - \u00a0- - - - \u00a08,000 Lease liabilities 1,187,663 \u00a0- (143,492) - \u00a0- 251,209 (23,143) 32,922 \u00a01,305,159 Other bank borrowings 120 \u00a0- (60) - \u00a0- - - - \u00a060 \u00a01,195,783 \u00a0237,700 (143,552) (3,743) \u00a0- 251,209 (23,143) 37,546 \u00a01,551,800 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01,796,982 \u00a0299,697 (436,049) (3,743) \u00a0616 251,209 (23,143) 37,546 \u00a01,923,115 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Of which: \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Non-current lease liabilities 1,013,496 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01,109,022 Non-current borrowings 546,259 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0517,729 Current lease liabilities 174,167 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0196,137 Current borrowings 63,060 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0100,227 The revolving credit facility is presented as non-current borrowings, as the Group expects and has an unconditional right to renew the revolving credit facility every three months until the maturity date. Convertible bonds \u2013 liability component On 17 June 2021, the Company issued convertible bonds due 17 June 2028 at 100% of their nominal value in an aggregate principal amount of \u20ac303.7 million. The convertible bonds have an interest rate of 1.50% payable semi-annually in arrears in equal instalments on 17 June and 17 December each year, commencing on 17 December 2021. The convertible bonds have a maturity of seven years and a denomination of \u20ac100,000 each. The bonds are convertible into ordinary shares of the Company at the option of the bondholders during the conversion period ending on the earlier of seven business days prior to the maturity date or any relevant redemption date. The initial conversion price was set at \u20ac50.625, (a 35% premium over the reference share price) and will be subject to adjustment in certain circumstances in line with market practice. The Company will have the option to redeem all, but not some only, of the bonds for the time being outstanding at their principal amount together with accrued interest, at any time on or after 8 July 2025 provided that the volume-weighted average price of a share on Euronext Amsterdam shall have exceeded 130% of the conversion price on each of not less than 20 trading days in any period of 30 consecutive trading days. Any outstanding bonds are also redeemable at any time after the settlement date if at least 85% of the issued bonds have been converted, settled or redeemed. Bondholders will be entitled to require an early redemption of their convertible bonds at their principal amount, together with accrued but unpaid interest, on 17 June 2026 or in the event of a change of control as defined in the terms and conditions. \u00a02022 2021 Carrying amount of liability at 1 January 238,581 - \u00a0\u00a0\u00a0Proceeds from issue of convertible bonds - 303,700 Transaction costs - (4,783) Net proceeds - 298,917 Amount classified as equity (net of transaction costs of \u20ac1.0 million)1 - (64,960) Amount classified as liability (net of transaction costs of \u20ac3.8 million) - 233,957 \u00a0\u00a0\u00a0Accrued interest 13,222 6,902 Interest paid (4,555) (2,278) Carrying amount of liability at 31 December 2022 247,248 238,581 Pre-tax Bank borrowings: senior debt loans and drawn revolving credit facility (RCF) The facility agreement consists of a \u20ac250 million term loan and a \u20ac200 million revolving facility, expiring in June 2025. The agreement includes an additional \u20ac150-million accordion facility of which \u20ac120 million (2021: \u20ac100 million) is available to be drawn at the date of publication of these financial statements. Basic-Fit can request the syndicated banks to make the remaining \u20ac30 million (2021: \u20ac50 million) available under the terms of the senior facility agreement, but that amount is not yet committed. The interest is variable and based on Euribor plus a margin that depends on certain leverage covenants (Euribor plus margin were 4.40% as at 31 December 2022 and 2.45% as at 31 December 2021). The term loan and RCF are unsecured.\u00a0As at 31 December 2022, an amount of \u20ac10.1 million (2021: \u20ac9.1 million) of the revolving facility of \u20ac320 million (including \u20ac120 million from the accordion) had been used for bank guarantees and \u20ac210.0 million had been drawn in cash (2021: the remaining part was not drawn). GO-C facility In May 2020, the Company entered into a \u20ac60 million GO-C facility agreement, repayable quarterly on a straight line basis over two years, after an initial one-year grace period. The interest is variable and based on Euribor plus a margin that depends on certain leverage covenants (Euribor plus margin were 5.20% as at 31 December 2022 and 2.71% as at 31 December 2021). As part of the GO-C regulation, the Dutch State (Staat der Nederlanden) guarantees 80% of the loan for the benefit of the lenders. Furthermore, as part of the GO-C regulation, the Company is not allowed to pay any dividends until the loan has been fully repaid. The loan is recognised on the basis of IFRS 9 as the interest is a market-rate as required by the GO-C regulation. Therefore, IAS 20 related to accounting for government grants is not applicable. As at 31 December 2022, the remaining debt of \u20ac13.3 million (2021: \u20ac26.7 million) related to repayments within twelve months after the reporting period is classified as current borrowings. Schuldschein In October 2019, Basic-Fit completed a Schuldschein issuance in euro-denominated tranches with maturities of three and five years. As at 31 December 2022, the outstanding amount was \u20ac18.0 million (2021: \u20ac91.5 million). For an amount of \u20ac8.0 million, the interest is fixed at 1.55% (2021: 2.05%) and for the remaining part, the interest is variable and based on Euribor plus a margin, together 3.45% (2021: 1.96%). This loan is unsecured. As at 31 December 2021, an amount of \u20ac73.5 million related to repayments within twelve months after the reporting period was classified as current borrowings. Borrowing costs The carrying amount of the borrowings is presented net of finance costs (2022: \u20ac1.5 million; 2021: \u20ac2.2 million). Finance costs are charged to the statement of profit or loss based on the effective interest rate method over the period to maturity of the loans. Other bank borrowings This loan was repayable in quarterly instalments of \u20ac15 thousand. The interest rate is fixed at 1.90%. Lease liabilities The Group recognises lease liabilities to make lease payments related to the right to use the underlying assets. Reference is made to note 4.4 Right-of-use assets and lease liabilities for a more detailed disclosure. Accounting policy Borrowings are initially recognised at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest rate method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period. However, a revolving credit facility is classified as non-current if the Group expects, and has the discretion, to roll over for at least twelve months after the reporting period. The Group does not have any qualifying assets, which are assets that necessarily take a substantial period of time to prepare for their intended use or sale. Therefore, borrowing costs are not capitalised and are expensed in the period in which they are incurred. Reference is made to note 6.5 Financial instruments for the accounting policy related to financial assets and liabilities, derivative financial instruments and fair value measurement. \u00a02022 \u00a0Less than 6 months 6 months to 1 year 1-2 years 2-5 years Over 5 years Total Carrying amount Non-derivatives \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Convertible bonds 2,278 2,278 4,555 13,666 305,978 328,755 247,248 Borrowings1 24,094 10,625 39,126 470,423 \u00a0544,268 491,333 Lease liabilities 110,643 108,425 216,354 596,115 618,350 1,649,887 1,481,539 Trade payables 149,167 - - - - 149,167 149,167 Total non-derivatives 286,182 121,328 260,035 1,080,204 924,328 2,672,077 2,369,287 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Derivative financial liability - - - - - - - Total derivatives - - - - - - - Excluding capitalised financing costs \u00a02021 \u00a0Less than 6 months 6 months to 1 year 1-2 years 2-5 years Over 5 years Total Carrying amount Non-derivatives \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Convertible bonds 2,278 2,278 4,555 13,667 310,533 333,311 238,581 Borrowings1 18,905 92,390 22,298 281,061 - 414,654 381,560 Lease liabilities 104,871 92,790 184,720 508,735 570,758 1,461,874 1,305,159 Trade payables 121,433 - - - - 121,433 121,433 Total non-derivatives 247,487 187,458 211,573 803,463 881,291 2,331,272 2,046,733 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Derivative financial liability 706 605 333 - - 1,644 1,660 Total derivatives 706 605 333 - - 1,644 1,660 Excluding capitalised financing costs Accounting Policy A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Accounting Policy Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group\u2019s financial liabilities include trade and other payables, loans and borrowings, including bank overdrafts and derivative financial instruments. Subsequent measurement The measurement of financial liabilities depends on their classification, as described below. Financial liabilities at fair value through profit or loss The Group has not designated any financial liabilities as at fair value through profit or loss. Loans and borrowings This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, as well as through the effective interest rate amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included as finance costs in the statement of profit or loss. This category generally applies to interest-bearing loans and borrowings. Derecognition of financial liabilities A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. A voluntary forgiveness of a lease liability granted by the lessor without other changes to the lease as a (partial) derecognition of a lease liability is accounted for as a credit to profit or loss. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss. If the terms are not substantially different, the original liability is not derecognised and a modification gain or loss is determined based on the original effective interest rate. However, if the financing agreement has a prepayment option at par without significant penalty, the adjustment is treated as a modification with a prospective adjustment of the effective interest rate to reflect the new market rate and without recognising a gain or loss on modification. Accounting Policy Compound financial instruments Compound financial instruments issued by the Group comprise convertible bonds denominated in euro that can be converted to ordinary shares at the option of the holder, when the number of shares to be issued is fixed and does not vary with changes in fair value. The liability component of compound financial instruments is initially recognised at the fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognised at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest rate method. The equity component of a compound financial instrument is not remeasured. Interest related to the financial liability is recognised in profit or loss. On conversion at maturity, the financial liability is reclassified to equity and no gain or loss is recognised. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-536": { "value": "Accounting policy Right-of-use assets The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The right-of-use asset for acquired leases is measured at the present value of the remaining lease payments adjusted for any favourable or unfavourable lease terms recognised when compared to market terms. These favourable and unfavourable contracts are recognised at fair value on the acquisition date for contracts whose terms are respectively favourable or unfavourable compared with current market terms, and they are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method, based on the term of the lease contracts. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of their estimated useful life and the lease term. Lease liabilities At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of whether to purchase the underlying asset. The Group applied the practical expedient issued by the International Accounting Standards Board as a part of the Amendment to IFRS 16 (COVID-19-Related Rent Concessions) and records rent credits granted by lessors as profit in the Consolidated Statement of Profit or Loss and not as a lease modification resulting in the remeasurement of right-of-use assets and lease liabilities. Lease component and non-lease components The Company has elected to separate lease and non-lease components included in lease payments for property leases. Regarding vehicles leases, Basic-Fit applies the practical expedient not to separate non-lease components from lease components. Therefore, the full monthly lease fees will be reflected on Basic-Fit\u2019s statement of financial position. Basic-Fit applies a portfolio approach for vehicle leases to effectively account for the right-of-use assets and lease liabilities. Short-term leases and leases of low-value assets The Group applies the short-term lease recognition exemption to its short-term leases (i.e. those leases that have a lease term of twelve months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases that are considered of low value (i.e. below \u20ac5,000). Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a straight-line basis over the lease term. Extension options Most of the lease contracts for buildings include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and to align with the Group\u2019s business needs. Management exercises significant judgement in determining whether it is reasonably certain that these extension and termination options will be exercised (see below). Extension options are included in the lease term when the Group has such an economic incentive that exercising the option is reasonably certain. The Group considers available evidence at the time of the assessment, including potentially favourable terms upon extension, potential termination penalties, the relative costs associated with potential relocation or termination of the lease and the extent of leasehold improvements undertaken. Additionally, the size and the relative importance of the leased premises as well as the availability of easily substitutable assets are taken into consideration when assessing whether the Group has an economic incentive to extend a lease for which it holds an option to do so. Periods covered by termination options are included as part of the lease term only when it is reasonably certain that these will not be exercised. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-381": { "value": " 4.5 Business combinations Acquisitions in 2022 In 2022, the Group acquired four fitness clubs in the Netherlands through asset deals and one fitness club in Germany through a share deal: Acquiree/ Club location Country Deal type Month Cologne (DE) Germany Sharedeal1 March 2022 Veldhoven (NL) The Netherlands Assetdeal April 2022 Amstelveen (NL) The Netherlands Assetdeal July 2022 Rotterdam (NL) The Netherlands Assetdeal July 2022 Waalwijk (NL) The Netherlands Assetdeal July 2022 HealthCity Germany GmbH All acquisitions are considered good opportunities for further growth and with the acquisition in Germany, this meant the start for Basic-Fit in a sixth country. The total purchase price net of cash was \u20ac5.3 million, which was mostly allocated to property, plant and equipment, receivables, customer relationships and a favourable lease contract (included in right-of-use assets). The goodwill of \u20ac1.2 million represents the excess of the consideration transferred after the recognition of newly acquired net identifiable assets and liabilities totalling \u20ac4.1 million and relates to the fact that Basic-Fit foresees good opportunities on the locations and these locations fit well within the cluster strategy of the Group. Of these acquisitions, three clubs were acquired from a party related to the CEO of the Company at an acquisition price of \u20ac4.1 million (see note 8.3 Related party transactions). These transactions were made at terms equivalent to those that prevail in arm\u2019s length transactions. Acquisitions in 2021 There were no acquisitions in the year 2021. The following tables summarise the considerations paid for the acquisitions in 2022 and 2021, the fair value of assets acquired and the liabilities assumed at the acquisition date. Fair value recognised on acquisition 2022 2021 Assets \u00a0\u00a0Property, plant and equipment 2,328 - Customer relationships 293 - Favourable lease contract (right-of-use assets) 510 - Non-current financial assets 5 - Inventories and receivables 1,361 - Cash and cash equivalents 22 - Liabilities \u00a0\u00a0Other provisions (166) - Accrued expenses and deferred income (239) - Deferred income tax assets and liabilities (79) - Total identifiable net assets acquired at fair value 4,035 - Goodwill arising on acquisition 1,239 - Purchase consideration transferred 5,274 - Less: cash acquired (22) - Net outflow of cash - investing activities 5,252 - From the date of acquisition, the revenue and net income of the business combinations acquired in 2022 for the period 2022 amounts to \u20ac1.5 million and a loss of \u20ac1.1 million respectively. If the business combinations had been acquired at the start of the annual reporting period, the revenue and net income of the acquired business combinations would have been \u20ac4.1 million and a loss of \u20ac0.4 million respectively. Accounting policy Business combinations are accounted for using the acquisition method. The costs of an acquisition are measured as the aggregate of the consideration transferred, which is measured at fair value at the acquisition date and the amount of any non-controlling interest in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interest in the acquiree at fair value or at the proportionate share of the acquiree\u2019s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses. The Group determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent considerations classified as equity are not remeasured and its subsequent settlement is accounted for within equity. Contingent considerations classified as assets or liabilities that are financial instruments and within the scope of IFRS 9 Financial Instruments, are measured at fair value with the changes in fair value recognised in the statement of profit or loss in accordance with IFRS 9. Other contingent considerations that are not within the scope of IFRS 9 are measured at fair value at each reporting date with changes in fair value recognised in profit or loss. Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired exceeds the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in the excess fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group\u2019s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed of in these circumstances is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-540": { "value": "Accounting policy Business combinations are accounted for using the acquisition method. The costs of an acquisition are measured as the aggregate of the consideration transferred, which is measured at fair value at the acquisition date and the amount of any non-controlling interest in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interest in the acquiree at fair value or at the proportionate share of the acquiree\u2019s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses. The Group determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent considerations classified as equity are not remeasured and its subsequent settlement is accounted for within equity. Contingent considerations classified as assets or liabilities that are financial instruments and within the scope of IFRS 9 Financial Instruments, are measured at fair value with the changes in fair value recognised in the statement of profit or loss in accordance with IFRS 9. Other contingent considerations that are not within the scope of IFRS 9 are measured at fair value at each reporting date with changes in fair value recognised in profit or loss. Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired exceeds the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in the excess fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group\u2019s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed of in these circumstances is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-383": { "value": " 5.1 Inventories The composition of the inventories was as follows: \u00a02022 2021 Food and drinks 3,621 3,288 Fitness equipment 755 20,144 Other goods 16,517 8,280 Total 20,893 31,712 'Food and drinks' consist primarily of sportswater that members with a (paid) 'sportswater add-on' can drink in the clubs. 'Fitness equipment' relates to equipment that is held for sale to members and third parties. The decrease in 2022, can be explained by a transfer to fixed assets as this fitness equipment is no longer held for sale but is leased out or available to be leased out to members as part of the All-in membership, as further disclosed in note 4.3 Property, plant and equipment. 'Other goods' includes goods that are sold via the online store and vending machines and to third parties, which increased due to a high volume of purchases in December 2022. Accounting policy Inventories are stated at the lower of costs and net realisable value. Costs comprise direct materials. Costs are assigned to individual items of inventory on the basis of weighted average costs. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInventoriesExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-545": { "value": "Accounting policy Inventories are stated at the lower of costs and net realisable value. Costs comprise direct materials. Costs are assigned to individual items of inventory on the basis of weighted average costs. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-385": { "value": "| \u00a0 | 2022 | 2021 |
|---|---|---|
| Member and trade receivables | 54,082 | 28,011 |
| Less: allowance for expected credit losses | (18,436) | (18,594) |
| Receivables \u2013 net | 35,646 | 9,417 |
| Security deposits | 8,912 | 6,740 |
| Loan receivable | 29 | 40 |
| Taxes and social charges (mainly VAT) | 17,709 | 18,477 |
| Prepayments | 5,236 | 9,543 |
| Other receivables and accrued income | 18,213 | 34,642 |
| Total receivables | 85,745 | 78,859 |
| Less: non-current portion of security deposits | 8,912 | 6,740 |
| Less: non-current loans receivable | 29 | 40 |
| Total non-current portion | 8,941 | 6,780 |
| Total current portion | 76,804 | 72,079 |
The decrease in 'Other receivables and accrued income' mainly relates to government grants receivable.
The fair value of the receivables approximates the carrying amount. No breakdown of the fair values of trade and other receivables has been included, as the differences between the carrying amount and the fair values are insignificant. In determining the expected credit loss allowance, the Group has considered any change in the risk profile of its members following the COVID-19 pandemic and the economic uncertainty.
The carrying amounts of the Group\u2019s trade and other receivables are all denominated in euros.
Movements in the Group provision for impairment of receivables were as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| As at 1 January | (18,594) | (15,418) |
| Provision for impairment recognised during the year | (14,647) | (19,468) |
| Receivables written off during the year as uncollectable | 14,805 | 16,292 |
| As at 31 December | (18,436) | (18,594) |
The creation and release of provisions for impaired receivables have been included in 'Other operating expenses' in the statement of profit or loss (note 3.8 Other operating expenses). Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash. As described in note 6.4 Financial risk management regarding credit risk, all member-related receivable balances are automatically past due. The estimated provision for impairment losses is recognised based on the expected credit loss for each of the ageing buckets.
The other classes in trade and other receivables do not contain impaired assets and are not past due. Based on the credit history of these other classes, the Group expects these amounts to be received when due (the Group does not hold any collateral with respect to these receivables).
Trade and other receivables include amounts due from members for services performed in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets. Trade receivables are generally due for settlement within 30 days or less and are therefore all classified as current.
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost, using the effective interest rate method, less provision for impairment.
Reference is made to note 6.5 Financial instruments for the accounting policy related to financial assets and liabilities, derivative financial instruments and fair value measurement.
The composition of cash and cash equivalents was as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Cash in bank and on hand | 42,165 | 69,712 |
| Cash in transit | 1,345 | 392 |
| Total | 43,510 | 70,104 |
All cash and cash equivalents are available for immediate use by the Group, except for an amount of \u20ac205 thousand (2021: \u20ac205 thousand) related to bank guarantees.
In the statement of cash flows, cash and cash equivalents include cash on hand and deposits held at call with financial institutions. In the statement of financial position, bank overdrafts are shown within borrowings in current liabilities.
The composition of trade and other payables was as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Trade payables | 149,167 | 121,433 |
| Deferred revenues | 17,435 | 18,688 |
| Holiday allowance and vacation days accrual | 11,274 | 9,416 |
| VAT payable | 3,303 | 685 |
| Payroll tax payable | 7,012 | 6,248 |
| Interest payable | 1,705 | 516 |
| Investment obligations | 10,894 | 31,586 |
| Housing cost payable | 12,608 | 13,676 |
| Other liabilities and accrued expenses | 9,418 | 8,955 |
| Total | 222,816 | 211,203 |
All current liabilities fall due in less than one year. Investment obligations are related to investments in opened clubs, for which no invoice is received yet.
The fair value of the current liabilities approximates the carrying amount due to their short-term nature. The decrease in deferred revenues is disclosed in more detail in note 3.2 Revenue. The increase in other lines in the table above are mostly directly related to the growth in members and clubs.
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid. The amounts are unsecured and are usually paid within 30-60 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within twelve months after the reporting period. They are initially recognised at their fair value and subsequently measured at amortised cost using the effective interest rate method.
For deferred revenues, reference is made to note 3.2 Revenue.
The Group\u2018s interest-bearing borrowings at 31 December 2022 and 31 December 2021, including the movements during 2022 and 2021, are summarised in the following tables:
| \u00a0 | \u00a0 | \u00a0 | Cash settled | \u00a0 | Other changes (non-cash) | \u00a0 | \u00a0 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | Balance as at 1 January 2022 | \u00a0 | New loans | Repayments | Transaction costs | \u00a0 | Amortisation | Additions (lease liabilities) | COVID-19 rent credits | Accretion of interest | \u00a0 | Balance as at 31 December 2022 |
| Floating rate borrowings (non-current and current) | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Bank borrowings | 250,000 | \u00a0 | - | - | - | \u00a0 | - | - | - | - | \u00a0 | 250,000 |
| Drawn revolving credit facility | - | \u00a0 | 210,000 | - | - | \u00a0 | - | - | - | - | \u00a0 | 210,000 |
| GO-C facility | 40,000 | \u00a0 | - | (26,667) | - | \u00a0 | - | - | - | - | \u00a0 | 13,333 |
| Schuldschein | 83,500 | \u00a0 | - | (73,500) | - | \u00a0 | - | - | - | - | \u00a0 | 10,000 |
| Borrowing costs | (2,185) | \u00a0 | - | - | - | \u00a0 | 715 | - | - | - | \u00a0 | (1,470) |
| \u00a0 | 371,315 | \u00a0 | 210,000 | (100,167) | - | \u00a0 | 715 | - | - | - | \u00a0 | 481,863 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Fixed rate borrowings and lease liabilities (non-current and current) | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Convertible bonds \u2013 liability component | 238,581 | \u00a0 | - | - | - | \u00a0 | - | - | - | 8,667 | \u00a0 | 247,248 |
| Schuldschein | 8,000 | \u00a0 | - | - | - | \u00a0 | - | - | - | - | \u00a0 | 8,000 |
| Lease liabilities | 1,305,159 | \u00a0 | - | (202,108) | - | \u00a0 | - | 348,330 | (2,415) | 32,573 | \u00a0 | 1,481,539 |
| Other bank borrowings | 60 | \u00a0 | - | (60) | - | \u00a0 | - | - | - | - | \u00a0 | - |
| \u00a0 | 1,551,800 | \u00a0 | - | (202,168) | - | \u00a0 | - | 348,330 | (2,415) | 41,240 | \u00a0 | 1,736,787 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | 1,923,115 | \u00a0 | 210,000 | (302,335) | - | \u00a0 | 715 | 348,330 | (2,415) | 41,240 | \u00a0 | 2,218,650 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Of which: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current lease liabilities | 1,109,022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,265,086 |
| Non-current borrowings | 517,729 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 723,778 |
| Current lease liabilities | 196,137 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 216,453 |
| Current borrowings | 100,227 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 13,333 |
| \u00a0 | \u00a0 | \u00a0 | Cash settled | \u00a0 | Other changes (non-cash) | \u00a0 | \u00a0 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | Balance as at 1 January 2021 | \u00a0 | New loans | Repayments | Transaction costs | \u00a0 | Amortisation | Additions (lease liabilities) | COVID-19 rent credits | Accretion of interest | \u00a0 | Balance as at 31 December 2021 |
| Floating rate borrowings (non-current) | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Bank borrowings | 250,000 | \u00a0 | - | - | - | \u00a0 | - | - | - | - | \u00a0 | 250,000 |
| Drawn revolving credit facility | 210,500 | \u00a0 | 1,997 | (212,497) | - | \u00a0 | - | - | - | - | \u00a0 | - |
| GO-C facility | 60,000 | \u00a0 | - | (20,000) | - | \u00a0 | - | - | - | - | \u00a0 | 40,000 |
| Bridge loan | - | \u00a0 | 60,000 | (60,000) | - | \u00a0 | - | - | - | - | \u00a0 | - |
| Schuldschein | 83,500 | \u00a0 | \u00a0 | - | - | \u00a0 | - | - | - | - | \u00a0 | 83,500 |
| Borrowing costs | (2,801) | \u00a0 | - | - | - | \u00a0 | 616 | - | - | - | \u00a0 | (2,185) |
| \u00a0 | 601,199 | \u00a0 | 61,997 | (292,497) | - | \u00a0 | 616 | - | - | - | \u00a0 | 371,315 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Fixed rate borrowings and lease liabilities (non-current and current) | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Convertible bonds \u2013 liability component | - | \u00a0 | 237,700 | - | (3,743) | \u00a0 | - | - | - | 4,624 | \u00a0 | 238,581 |
| Schuldschein | 8,000 | \u00a0 | - | - | - | \u00a0 | - | - | - | - | \u00a0 | 8,000 |
| Lease liabilities | 1,187,663 | \u00a0 | - | (143,492) | - | \u00a0 | - | 251,209 | (23,143) | 32,922 | \u00a0 | 1,305,159 |
| Other bank borrowings | 120 | \u00a0 | - | (60) | - | \u00a0 | - | - | - | - | \u00a0 | 60 |
| \u00a0 | 1,195,783 | \u00a0 | 237,700 | (143,552) | (3,743) | \u00a0 | - | 251,209 | (23,143) | 37,546 | \u00a0 | 1,551,800 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | 1,796,982 | \u00a0 | 299,697 | (436,049) | (3,743) | \u00a0 | 616 | 251,209 | (23,143) | 37,546 | \u00a0 | 1,923,115 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Of which: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current lease liabilities | 1,013,496 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,109,022 |
| Non-current borrowings | 546,259 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 517,729 |
| Current lease liabilities | 174,167 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 196,137 |
| Current borrowings | 63,060 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 100,227 |
The revolving credit facility is presented as non-current borrowings, as the Group expects and has an unconditional right to renew the revolving credit facility every three months until the maturity date.
On 17 June 2021, the Company issued convertible bonds due 17 June 2028 at 100% of their nominal value in an aggregate principal amount of \u20ac303.7 million. The convertible bonds have an interest rate of 1.50% payable semi-annually in arrears in equal instalments on 17 June and 17 December each year, commencing on 17 December 2021. The convertible bonds have a maturity of seven years and a denomination of \u20ac100,000 each. The bonds are convertible into ordinary shares of the Company at the option of the bondholders during the conversion period ending on the earlier of seven business days prior to the maturity date or any relevant redemption date. The initial conversion price was set at \u20ac50.625, (a 35% premium over the reference share price) and will be subject to adjustment in certain circumstances in line with market practice.
The Company will have the option to redeem all, but not some only, of the bonds for the time being outstanding at their principal amount together with accrued interest, at any time on or after 8 July 2025 provided that the volume-weighted average price of a share on Euronext Amsterdam shall have exceeded 130% of the conversion price on each of not less than 20 trading days in any period of 30 consecutive trading days. Any outstanding bonds are also redeemable at any time after the settlement date if at least 85% of the issued bonds have been converted, settled or redeemed.
Bondholders will be entitled to require an early redemption of their convertible bonds at their principal amount, together with accrued but unpaid interest, on 17 June 2026 or in the event of a change of control as defined in the terms and conditions.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Carrying amount of liability at 1 January | 238,581 | - |
| \u00a0 | \u00a0 | \u00a0 |
| Proceeds from issue of convertible bonds | - | 303,700 |
| Transaction costs | - | (4,783) |
| Net proceeds | - | 298,917 |
| Amount classified as equity (net of transaction costs of \u20ac1.0 million)1 | - | (64,960) |
| Amount classified as liability (net of transaction costs of \u20ac3.8 million) | - | 233,957 |
| \u00a0 | \u00a0 | \u00a0 |
| Accrued interest | 13,222 | 6,902 |
| Interest paid | (4,555) | (2,278) |
| Carrying amount of liability at 31 December 2022 | 247,248 | 238,581 |
The facility agreement consists of a \u20ac250 million term loan and a \u20ac200 million revolving facility, expiring in June 2025.
The agreement includes an additional \u20ac150-million accordion facility of which \u20ac120 million (2021: \u20ac100 million) is available to be drawn at the date of publication of these financial statements. Basic-Fit can request the syndicated banks to make the remaining \u20ac30 million (2021: \u20ac50 million) available under the terms of the senior facility agreement, but that amount is not yet committed.
The interest is variable and based on Euribor plus a margin that depends on certain leverage covenants (Euribor plus margin were 4.40% as at 31 December 2022 and 2.45% as at 31 December 2021). The term loan and RCF are unsecured.\u00a0
As at 31 December 2022, an amount of \u20ac10.1 million (2021: \u20ac9.1 million) of the revolving facility of \u20ac320 million (including \u20ac120 million from the accordion) had been used for bank guarantees and \u20ac210.0 million had been drawn in cash (2021: the remaining part was not drawn).
In May 2020, the Company entered into a \u20ac60 million GO-C facility agreement, repayable quarterly on a straight line basis over two years, after an initial one-year grace period. The interest is variable and based on Euribor plus a margin that depends on certain leverage covenants (Euribor plus margin were 5.20% as at 31 December 2022 and 2.71% as at 31 December 2021). As part of the GO-C regulation, the Dutch State (Staat der Nederlanden) guarantees 80% of the loan for the benefit of the lenders. Furthermore, as part of the GO-C regulation, the Company is not allowed to pay any dividends until the loan has been fully repaid. The loan is recognised on the basis of IFRS 9 as the interest is a market-rate as required by the GO-C regulation. Therefore, IAS 20 related to accounting for government grants is not applicable. As at 31 December 2022, the remaining debt of \u20ac13.3 million (2021: \u20ac26.7 million) related to repayments within twelve months after the reporting period is classified as current borrowings.
In October 2019, Basic-Fit completed a Schuldschein issuance in euro-denominated tranches with maturities of three and five years. As at 31 December 2022, the outstanding amount was \u20ac18.0 million (2021: \u20ac91.5 million). For an amount of \u20ac8.0 million, the interest is fixed at 1.55% (2021: 2.05%) and for the remaining part, the interest is variable and based on Euribor plus a margin, together 3.45% (2021: 1.96%). This loan is unsecured. As at 31 December 2021, an amount of \u20ac73.5 million related to repayments within twelve months after the reporting period was classified as current borrowings.
The carrying amount of the borrowings is presented net of finance costs (2022: \u20ac1.5 million; 2021: \u20ac2.2 million). Finance costs are charged to the statement of profit or loss based on the effective interest rate method over the period to maturity of the loans.
This loan was repayable in quarterly instalments of \u20ac15 thousand. The interest rate is fixed at 1.90%.
The Group recognises lease liabilities to make lease payments related to the right to use the underlying assets. Reference is made to note 4.4 Right-of-use assets and lease liabilities for a more detailed disclosure.
Borrowings are initially recognised at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest rate method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period. However, a revolving credit facility is classified as non-current if the Group expects, and has the discretion, to roll over for at least twelve months after the reporting period.
The Group does not have any qualifying assets, which are assets that necessarily take a substantial period of time to prepare for their intended use or sale. Therefore, borrowing costs are not capitalised and are expensed in the period in which they are incurred.
Reference is made to note 6.5 Financial instruments for the accounting policy related to financial assets and liabilities, derivative financial instruments and fair value measurement.
The Group\u2019s activities expose it to a variety of financial risks. Management identifies and evaluates the financial risks based on principles for overall risk management. The Group\u2019s overall risk management programme seeks, in accordance with our Corporate Treasury Policy, to minimise potential adverse effects on the Group\u2019s financial performance.
Credit risk arises from cash, cash equivalents and deposits with banks and financial institutions, as well as credit exposures to outstanding receivables for membership fees or other membership services that could not be collected upfront. The carrying amounts of these financial instruments as disclosed in notes 5.2 Trade and other receivables and 5.3 Cash and cash equivalents represent the Group\u2019s maximum credit exposure.
The Group\u2019s policy is that all members need to pay membership fees upfront, which means that credit risk related to membership fees is limited to those fees that could not be collected upfront. The first measure to limit credit risk is to deny access to the services provided by the Group to members with overdue receivables until the receivables have been fully paid. The second measure is the Group\u2019s collection policy of using debt collection agencies for all receivables due for more than 120 days. The Group does not hold collateral as security for the membership receivables. The Group evaluates the concentration of risk with respect to trade receivables as low, as its members are located in several jurisdictions.
As a result of the Group\u2019s prepayment policy, any account receivables balances are automatically past due.
An ageing analysis of the Group\u2019s trade and other receivables that are past due (including provision for expected credit losses) is as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Overdue <30 days | 19,265 | 3,420 |
| Overdue 31-60 days | 2,470 | 3,829 |
| Overdue 61-90 days | 3,632 | 1,149 |
| Overdue >90 days | 10,279 | 1,019 |
| Balance incl. provision | 35,646 | 9,417 |
The receivables consist of member receivables and trade receivables. These receivables are assessed collectively to determine whether an impairment should be recognised. As a direct result of the COVID-19 pandemic, and economic uncertainty increasing in 2022, the Group noticed that it was more difficult to collect the outstanding amounts. In determining the expected credit loss allowance the Group considered any change in the risk profile of its members following the COVID-19 pandemic and the economic uncertainty as of 2022. For the receivables, the estimated impairment losses are recognised in a separate provision for impairment, which is based on the expected credit loss for each of the ageing buckets. As at 31 December 2022, the provision stood at \u20ac18.4 million (2021: \u20ac18.6 million). The Group avoids the concentration of credit risk on its cash and cash equivalents by spreading them over reputable banks: ABN AMRO, Rabobank, ING, KBC and BNP Paribas. No collateral is held for the aforementioned liquid assets.
The Group\u2019s funding strategy is focused on ensuring that it has continuous access to capital. On a weekly basis, management prepares a cash flow forecast to identify the cash needs for the short and medium term and on a quarterly basis for the longer term. Additionally, management monitors on a daily basis the intra-month cash needs by assessing the cash inflows and outflows. In direct response to the impact of the COVID-19 pandemic, management intensified the monitoring of cash needs and frequently updated the forecasts based on the latest available information and expectations related to temporary club closures and re-openings.
The revolving credit facility of \u20ac320 million (2021: \u20ac300 million) has a maturity date of June 2025. Basic-Fit can request the syndicated banks to make the remaining \u20ac30 million of the accordion facility available under the terms of the SFA, but the amount is not yet committed. The facilities can only be cancelled by the lenders upon the receipt of a timely period of notice after an event of default (including non-payment, breach of (financial) covenants or breach of other obligations, in each case subject to materiality thresholds, qualifications and cure periods).
The table below provides an overview of all committed and undrawn facilities as at 31 December 2022:
| (In \u20ac\u00a0millions) | Facility (committed) | Undrawn | Covenant applicable |
|---|---|---|---|
| Term loan | 250.0 | - | Yes |
| Revolving credit facility1 | 320.0 | 99.9 | Yes |
| GO-C facility | 13.3 | - | Yes |
| Schuldschein | 18.0 | - | Yes |
| \u00a0 | 601.3 | 99.9 | \u00a0 |
The following table analyses the Group\u2019s financial liabilities in terms of relevant maturity groupings, based on their contractual maturities for all non-derivative financial liabilities, and net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within twelve months equal their carrying balances, as the impact of discounting is not significant. For interest rate swaps, the cash flows have been estimated using forward interest-rates applicable at the end of the reporting period.
| \u00a0 | 2022 | ||||||
|---|---|---|---|---|---|---|---|
| \u00a0 | Less than 6 months | 6 months to 1 year | 1-2 years | 2-5 years | Over 5 years | Total | Carrying amount |
| Non-derivatives | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Convertible bonds | 2,278 | 2,278 | 4,555 | 13,666 | 305,978 | 328,755 | 247,248 |
| Borrowings1 | 24,094 | 10,625 | 39,126 | 470,423 | \u00a0 | 544,268 | 491,333 |
| Lease liabilities | 110,643 | 108,425 | 216,354 | 596,115 | 618,350 | 1,649,887 | 1,481,539 |
| Trade payables | 149,167 | - | - | - | - | 149,167 | 149,167 |
| Total non-derivatives | 286,182 | 121,328 | 260,035 | 1,080,204 | 924,328 | 2,672,077 | 2,369,287 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Derivative financial liability | - | - | - | - | - | - | - |
| Total derivatives | - | - | - | - | - | - | - |
| \u00a0 | 2021 | ||||||
|---|---|---|---|---|---|---|---|
| \u00a0 | Less than 6 months | 6 months to 1 year | 1-2 years | 2-5 years | Over 5 years | Total | Carrying amount |
| Non-derivatives | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Convertible bonds | 2,278 | 2,278 | 4,555 | 13,667 | 310,533 | 333,311 | 238,581 |
| Borrowings1 | 18,905 | 92,390 | 22,298 | 281,061 | - | 414,654 | 381,560 |
| Lease liabilities | 104,871 | 92,790 | 184,720 | 508,735 | 570,758 | 1,461,874 | 1,305,159 |
| Trade payables | 121,433 | - | - | - | - | 121,433 | 121,433 |
| Total non-derivatives | 247,487 | 187,458 | 211,573 | 803,463 | 881,291 | 2,331,272 | 2,046,733 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Derivative financial liability | 706 | 605 | 333 | - | - | 1,644 | 1,660 |
| Total derivatives | 706 | 605 | 333 | - | - | 1,644 | 1,660 |
Foreign exchange risk
The Group only operates in the Eurozone, so currency risk is limited, due to the fact that all revenues (and almost all expenses) are incurred in euro. There is therefore no significant exposure to foreign currency
fluctuations.
Price risk
The Group has limited exposure to price risk. The Group's main exposure is to fluctuations in energy costs. Basic-Fit has fixed prices for 75% of the expected energy consumption in 2023. To reduce the energy costs per club, Basic-Fit established an energy savings task force to scrutinise the energy consumption and identify where further efficiencies can be achieved.
Interest rate risk and cash flow risk
The Group\u2019s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. Basic-Fit aims to hedge a minimum of 50% of its variable interest exposure. The Group manages its cash flow interest rate risk by mostly using floating-to-fixed interest rate swaps. Under the swap agreements, the Group agrees with another party to exchange, at specified intervals, the difference between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional principal amounts.
The exposure of the Group\u2019s borrowings to interest rate changes and the contractual re-pricing dates of the fixed interest rate borrowings (including lease liabilities) at the end of the reporting period were as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Variable rate borrowings | 483,333 | 373,500 |
| Fixed interest rate borrowings (including lease liabilities) | 1,736,787 | 1,551,800 |
| Total | 2,220,120 | 1,925,300 |
Swaps currently in place cover approximately 42.4% (2021: 54.9%) of the variable loan principal outstanding.
The contracts require settlement of net interest receivable or payable every 90 days.
At the end of the reporting period, the Group had the following variable rate borrowings and interest rate swap contracts (which are disclosed under 'Derivative financial instruments and hedging activities' in note 6.5 Financial instruments) outstanding:
| \u00a0 | 31 December 2022 | \u00a0 | 31 December 2021 | ||||
|---|---|---|---|---|---|---|---|
| \u00a0 | Weighted average interest rate | Balance | % of the total loans | \u00a0 | Weighted average interest rate | Balance | % of the total loans |
| Bank overdrafts and bank loans | 4.36% | 483,333 | 21.77% | \u00a0 | 2.37% | 373,500 | 19.40% |
| Interest rate swaps (notional amount) | \u00a0 | (205,000) | \u00a0 | \u00a0 | \u00a0 | (205,000) | \u00a0 |
| Net exposure to cash flow interest rate risk | \u00a0 | 278,333 | 12.54% | \u00a0 | \u00a0 | 168,500 | 8.75% |
Over the past two years, the following gains/(losses) were recognised in profit or loss and other comprehensive income with respect to interest rate swaps:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Gain (loss) recognised in profit or loss | 3,705 | 1,796 |
| Reclassified from other comprehensive income to profit or loss | - | - |
According to interest rate sensitivity analyses performed for the years ending 31 December 2022 and 2021, the impact on the consolidated statement of profit or loss (post-tax) due to upward or downward movements in the interest rates of 1% were as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Increase by 100 basis points (derivative financial instruments) | - | 1,796 |
| Decrease by 100 basis points (derivative financial instruments) | - | (1,778) |
| Increase by 100 basis points (non-derivative financial instruments) | (3,586) | (1,413) |
| Decrease by 100 basis points (non-derivative financial instruments) | 3,586 | 297 |
There was no impact on components of equity due to upward or downward movements in the interest rates.
The Group\u2019s receivables are carried at amortised cost. They are not subject to interest rate risk as defined in IFRS 7, since neither the carrying amount nor the future cash flows will fluctuate due to changes in market interest rates.
Management did not identify any other market risks that could have a significant impact on the Group.
Reference is made to note 6.5 Financial instruments for the accounting policy with respect to financial assets and liabilities, derivative financial instruments and fair value measurement.
Financial instruments by category comprise the following:
| Assets | 2022 | 2021 | ||
|---|---|---|---|---|
| \u00a0 | Derivatives at FVPL1 | Loans and receivables | Derivatives at FVPL1 | Loans and receivables |
| Loan receivable | - | 29 | - | 40 |
| Derivative financial instruments (current) | 2,045 | - | - | - |
| Trade and other receivables excluding prepayments | - | 35,646 | - | 9,417 |
| Cash and cash equivalents | - | 43,510 | - | 70,104 |
| Total | 2,045 | 79,185 | - | 79,561 |
| Liabilities | 2022 | 2021 | ||
|---|---|---|---|---|
| \u00a0 | Derivatives at FVPL1 | Other financial liabilities at amortised cost | Derivatives at FVPL1 | Other financial liabilities at amortised cost |
| Borrowings (excluding lease liabilities) | - | 737,111 | - | 617,956 |
| Lease liabilities | - | 1,481,539 | - | 1,305,159 |
| Derivative financial instruments | - | - | 1,660 | - |
| Trade and other payables excluding non-financial liabilities | - | 149,167 | - | 121,433 |
| Total | - | 2,367,817 | 1,660 | 2,044,548 |
The carrying amount of the above financial instruments under 'Assets' represents the maximum exposure to credit risk, with the exception of derivative financial instruments. The Group\u2019s maximum exposure related to financial derivative instruments is disclosed in the maturities table as part of the liquidity risk disclosure in note 6.4 Financial risk management.
See note 6.4 Financial risk management for a description of the credit quality of financial assets that are neither past due nor impaired.
Derivatives are classified as Level 2 valuation, in accordance with the fair value hierarchy as described in IFRS 13.
As at 31 December 2022, the Group had five (2021: five) derivative financial instruments measured at fair value. These interest rate swaps swap quarterly interest payments, where the Group pays a fixed interest and receives interest based on the three-month Euribor rate. The Group does not apply hedge accounting to these swaps.
| \u00a0 | Notional amount | Inception | Termination | Fixed interest | Carrying amount 2022 | Carrying amount 2021 |
|---|---|---|---|---|---|---|
| Interest rate swaps (five) | 205,000 | January 2019 | May 2023 | 0.131% | 2,045 | (1,660) |
| Total | 205,000 | \u00a0 | \u00a0 | \u00a0 | 2,045 | (1,660) |
The movements in 2022 and 2021 arising from cash flows and non-cash changes in the Group\u2018s derivative financial instruments are summarised in the following table:
| \u00a0 | \u00a0 | Cash flows | Other changes (non-cash) | \u00a0 | |
|---|---|---|---|---|---|
| \u00a0 | Balance as at 1 January1 | Repayments | Fair value changes through P&L2 | Fair value changes through OCI3 | Balance as at 31 December1 |
| 2022 | (1,660) | - | 3,705 | - | 2,045 |
| 2021 | (3,456) | - | 1,796 | - | (1,660) |
As at 31 December 2022 and 31 December 2021, the carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables, and short-term borrowings approximated their fair values due to the short-term maturities of these assets and liabilities.
As at 31 December 2022 and 31 December 2021, the fair values of other long-term financial assets (security deposits) were not materially different from the carrying amounts.
As at 31 December 2022, the fair values of the long-term borrowings (excluding lease liabilities) were not materially different from the carrying amounts. As at 31 December 2021, the fair values of the long-term borrowings (excluding lease liabilities) amounted to \u20ac274.5 million (carrying amount \u20ac279.1 million).
As at 31 December 2022, the fair values of the convertible bonds amounted to \u20ac224 million (carrying amount \u20ac247 million. As at 31 December 2021, the fair value of the convertible bonds was not materially different from the carrying amount.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Initial recognition and measurement
Financial assets are classified, at initial recognition, and subsequently measured at amortised cost and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset\u2019s contractual cash flow characteristics and the Group\u2019s business model for managing them. The Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component are measured at the transaction price determined under IFRS 15. Reference is made to the accounting policies in Note 3.2 Revenue.
For a financial asset to be classified and measured at amortised cost, it needs to give rise to cash flows that are \u2018solely payments of principal and interest (SPPI)\u2019 on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at instrument level. The Group\u2019s business model for managing financial assets refers to how it manages its financial assets to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require the delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset.
Subsequent measurement
For the purposes of subsequent measurement, financial assets are classified into two categories:
\u2022 Financial assets at amortised cost (debt instruments)
\u2022 Financial assets at fair value through profit or loss
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of the following conditions are met:
\u2022 The financial asset is held within a business model with the objective of holding financial assets to collect contractual cash flows
and
\u2022 The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding
Financial assets at amortised cost are subsequently measured using the effective interest rate method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
The Group\u2019s financial assets at amortised cost include trade receivables.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the statement of profit or loss.
Impairment of financial assets
Aside from this note, other disclosures relating to impairment of financial assets (trade receivables) are included in note 5.2 Trade and other receivables.
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
For trade receivables, the Group applies a simplified approach for the calculation of ECLs. The Group does not, therefore, track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
\u2022 The rights to receive cash flows from the asset have expired
or
\u2022 The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u2018pass-through\u2019 arrangement and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Group\u2019s financial liabilities include trade and other payables, loans and borrowings, including bank overdrafts and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below.
Financial liabilities at fair value through profit or loss
The Group has not designated any financial liabilities as at fair value through profit or loss.
Loans and borrowings
This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, as well as through the effective interest rate amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included as finance costs in the statement of profit or loss. This category generally applies to interest-bearing loans and borrowings.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. A voluntary forgiveness of a lease liability granted by the lessor without other changes to the lease as a (partial) derecognition of a lease liability is accounted for as a credit to profit or loss.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss. If the terms are not substantially different, the original liability is not derecognised and a modification gain or loss is determined based on the original effective interest rate. However, if the financing agreement has a prepayment option at par without significant penalty, the adjustment is treated as a modification with a prospective adjustment of the effective interest rate to reflect the new market rate and without recognising a gain or loss on modification.
Compound financial instruments issued by the Group comprise convertible bonds denominated in euro that can be converted to ordinary shares at the option of the holder, when the number of shares to be issued is fixed and does not vary with changes in fair value. The liability component of compound financial instruments is initially recognised at the fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognised at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest rate method. The equity component of a compound financial instrument is not remeasured. Interest related to the financial liability is recognised in profit or loss. On conversion at maturity, the financial liability is reclassified to equity and no gain or loss is recognised.
Initial recognition and subsequent measurement
The Group uses interest rate swaps as derivative financial instruments to hedge its interest rate risks. Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
The Group did not apply hedge accounting for the remaining financial instruments as at 31 December 2022. Therefore, all changes related to these financial instruments will be recognised in profit or loss.
The Group measures financial instruments such as derivatives at fair value at each reporting date.
Fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
\u2022 In the principal market for the asset or liability
or
\u2022 in the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 \u2014 Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 \u2014 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable Level 3 \u2014 Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For all years presented, the Group only held financial instruments that classify as Level 2 fair values. The Group did not hold any Level 1 or Level 3 financial instruments, nor were there any transfers between levels in the year under review. The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques that maximise the use of observable market data where it is available and rely as little as possible on entity-specific estimates. If all significant inputs required to assign a fair value to an instrument are observable, the instrument is included in Level 2. The fair value of the interest rate swaps is calculated as the present value of the estimated future cash flows, based on observable yield curves (discounted cash flow model).
Significant judgement is required in determining the expected credit loss allowance. For this purpose, any change in the risk profile of members following the COVID-19 pandemic should be considered.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Finance income: | \u00a0 | \u00a0 |
| Other interest income | 2 | - |
| Total finance income | 2 | - |
| \u00a0 | \u00a0 | \u00a0 |
| Finance costs: | \u00a0 | \u00a0 |
| Interest on convertible bonds | (13,222) | (6,902) |
| Interest on external debt and borrowings | (15,384) | (16,916) |
| Lease liabilities interest | (32,573) | (32,922) |
| Valuation difference derivative financial instruments | 3,705 | 1,796 |
| Other finance costs (including waiver fees) | (1,161) | (1,811) |
| Total finance costs | (58,635) | (56,755) |
| \u00a0 | \u00a0 | \u00a0 |
| Total finance costs - net | (58,633) | (56,755) |
Reference is made to note 6.5 Financial instruments for the accounting policy related to financial assets and liabilities, derivative financial instruments and fair value measurement.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-386": { "value": "| \u00a0 | 2022 | 2021 |
|---|---|---|
| Member and trade receivables | 54,082 | 28,011 |
| Less: allowance for expected credit losses | (18,436) | (18,594) |
| Receivables \u2013 net | 35,646 | 9,417 |
| Security deposits | 8,912 | 6,740 |
| Loan receivable | 29 | 40 |
| Taxes and social charges (mainly VAT) | 17,709 | 18,477 |
| Prepayments | 5,236 | 9,543 |
| Other receivables and accrued income | 18,213 | 34,642 |
| Total receivables | 85,745 | 78,859 |
| Less: non-current portion of security deposits | 8,912 | 6,740 |
| Less: non-current loans receivable | 29 | 40 |
| Total non-current portion | 8,941 | 6,780 |
| Total current portion | 76,804 | 72,079 |
The decrease in 'Other receivables and accrued income' mainly relates to government grants receivable.
The fair value of the receivables approximates the carrying amount. No breakdown of the fair values of trade and other receivables has been included, as the differences between the carrying amount and the fair values are insignificant. In determining the expected credit loss allowance, the Group has considered any change in the risk profile of its members following the COVID-19 pandemic and the economic uncertainty.
The carrying amounts of the Group\u2019s trade and other receivables are all denominated in euros.
Movements in the Group provision for impairment of receivables were as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| As at 1 January | (18,594) | (15,418) |
| Provision for impairment recognised during the year | (14,647) | (19,468) |
| Receivables written off during the year as uncollectable | 14,805 | 16,292 |
| As at 31 December | (18,436) | (18,594) |
The creation and release of provisions for impaired receivables have been included in 'Other operating expenses' in the statement of profit or loss (note 3.8 Other operating expenses). Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash. As described in note 6.4 Financial risk management regarding credit risk, all member-related receivable balances are automatically past due. The estimated provision for impairment losses is recognised based on the expected credit loss for each of the ageing buckets.
The other classes in trade and other receivables do not contain impaired assets and are not past due. Based on the credit history of these other classes, the Group expects these amounts to be received when due (the Group does not hold any collateral with respect to these receivables).
Credit risk arises from cash, cash equivalents and deposits with banks and financial institutions, as well as credit exposures to outstanding receivables for membership fees or other membership services that could not be collected upfront. The carrying amounts of these financial instruments as disclosed in notes 5.2 Trade and other receivables and 5.3 Cash and cash equivalents represent the Group\u2019s maximum credit exposure.
The Group\u2019s policy is that all members need to pay membership fees upfront, which means that credit risk related to membership fees is limited to those fees that could not be collected upfront. The first measure to limit credit risk is to deny access to the services provided by the Group to members with overdue receivables until the receivables have been fully paid. The second measure is the Group\u2019s collection policy of using debt collection agencies for all receivables due for more than 120 days. The Group does not hold collateral as security for the membership receivables. The Group evaluates the concentration of risk with respect to trade receivables as low, as its members are located in several jurisdictions.
As a result of the Group\u2019s prepayment policy, any account receivables balances are automatically past due.
An ageing analysis of the Group\u2019s trade and other receivables that are past due (including provision for expected credit losses) is as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Overdue <30 days | 19,265 | 3,420 |
| Overdue 31-60 days | 2,470 | 3,829 |
| Overdue 61-90 days | 3,632 | 1,149 |
| Overdue >90 days | 10,279 | 1,019 |
| Balance incl. provision | 35,646 | 9,417 |
The receivables consist of member receivables and trade receivables. These receivables are assessed collectively to determine whether an impairment should be recognised. As a direct result of the COVID-19 pandemic, and economic uncertainty increasing in 2022, the Group noticed that it was more difficult to collect the outstanding amounts. In determining the expected credit loss allowance the Group considered any change in the risk profile of its members following the COVID-19 pandemic and the economic uncertainty as of 2022. For the receivables, the estimated impairment losses are recognised in a separate provision for impairment, which is based on the expected credit loss for each of the ageing buckets. As at 31 December 2022, the provision stood at \u20ac18.4 million (2021: \u20ac18.6 million). The Group avoids the concentration of credit risk on its cash and cash equivalents by spreading them over reputable banks: ABN AMRO, Rabobank, ING, KBC and BNP Paribas. No collateral is held for the aforementioned liquid assets.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Initial recognition and measurement
Financial assets are classified, at initial recognition, and subsequently measured at amortised cost and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset\u2019s contractual cash flow characteristics and the Group\u2019s business model for managing them. The Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component are measured at the transaction price determined under IFRS 15. Reference is made to the accounting policies in Note 3.2 Revenue.
For a financial asset to be classified and measured at amortised cost, it needs to give rise to cash flows that are \u2018solely payments of principal and interest (SPPI)\u2019 on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at instrument level. The Group\u2019s business model for managing financial assets refers to how it manages its financial assets to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require the delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset.
Subsequent measurement
For the purposes of subsequent measurement, financial assets are classified into two categories:
\u2022 Financial assets at amortised cost (debt instruments)
\u2022 Financial assets at fair value through profit or loss
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of the following conditions are met:
\u2022 The financial asset is held within a business model with the objective of holding financial assets to collect contractual cash flows
and
\u2022 The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding
Financial assets at amortised cost are subsequently measured using the effective interest rate method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
The Group\u2019s financial assets at amortised cost include trade receivables.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the statement of profit or loss.
Impairment of financial assets
Aside from this note, other disclosures relating to impairment of financial assets (trade receivables) are included in note 5.2 Trade and other receivables.
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
For trade receivables, the Group applies a simplified approach for the calculation of ECLs. The Group does not, therefore, track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
\u2022 The rights to receive cash flows from the asset have expired
or
\u2022 The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u2018pass-through\u2019 arrangement and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.
Movements in the Group provision for impairment of receivables were as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| As at 1 January | (18,594) | (15,418) |
| Provision for impairment recognised during the year | (14,647) | (19,468) |
| Receivables written off during the year as uncollectable | 14,805 | 16,292 |
| As at 31 December | (18,436) | (18,594) |
The creation and release of provisions for impaired receivables have been included in 'Other operating expenses' in the statement of profit or loss (note 3.8 Other operating expenses). Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash. As described in note 6.4 Financial risk management regarding credit risk, all member-related receivable balances are automatically past due. The estimated provision for impairment losses is recognised based on the expected credit loss for each of the ageing buckets.
The other classes in trade and other receivables do not contain impaired assets and are not past due. Based on the credit history of these other classes, the Group expects these amounts to be received when due (the Group does not hold any collateral with respect to these receivables).
The Group\u2019s activities expose it to a variety of financial risks. Management identifies and evaluates the financial risks based on principles for overall risk management. The Group\u2019s overall risk management programme seeks, in accordance with our Corporate Treasury Policy, to minimise potential adverse effects on the Group\u2019s financial performance.
Credit risk arises from cash, cash equivalents and deposits with banks and financial institutions, as well as credit exposures to outstanding receivables for membership fees or other membership services that could not be collected upfront. The carrying amounts of these financial instruments as disclosed in notes 5.2 Trade and other receivables and 5.3 Cash and cash equivalents represent the Group\u2019s maximum credit exposure.
The Group\u2019s policy is that all members need to pay membership fees upfront, which means that credit risk related to membership fees is limited to those fees that could not be collected upfront. The first measure to limit credit risk is to deny access to the services provided by the Group to members with overdue receivables until the receivables have been fully paid. The second measure is the Group\u2019s collection policy of using debt collection agencies for all receivables due for more than 120 days. The Group does not hold collateral as security for the membership receivables. The Group evaluates the concentration of risk with respect to trade receivables as low, as its members are located in several jurisdictions.
As a result of the Group\u2019s prepayment policy, any account receivables balances are automatically past due.
An ageing analysis of the Group\u2019s trade and other receivables that are past due (including provision for expected credit losses) is as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Overdue <30 days | 19,265 | 3,420 |
| Overdue 31-60 days | 2,470 | 3,829 |
| Overdue 61-90 days | 3,632 | 1,149 |
| Overdue >90 days | 10,279 | 1,019 |
| Balance incl. provision | 35,646 | 9,417 |
The receivables consist of member receivables and trade receivables. These receivables are assessed collectively to determine whether an impairment should be recognised. As a direct result of the COVID-19 pandemic, and economic uncertainty increasing in 2022, the Group noticed that it was more difficult to collect the outstanding amounts. In determining the expected credit loss allowance the Group considered any change in the risk profile of its members following the COVID-19 pandemic and the economic uncertainty as of 2022. For the receivables, the estimated impairment losses are recognised in a separate provision for impairment, which is based on the expected credit loss for each of the ageing buckets. As at 31 December 2022, the provision stood at \u20ac18.4 million (2021: \u20ac18.6 million). The Group avoids the concentration of credit risk on its cash and cash equivalents by spreading them over reputable banks: ABN AMRO, Rabobank, ING, KBC and BNP Paribas. No collateral is held for the aforementioned liquid assets.
The Group\u2019s funding strategy is focused on ensuring that it has continuous access to capital. On a weekly basis, management prepares a cash flow forecast to identify the cash needs for the short and medium term and on a quarterly basis for the longer term. Additionally, management monitors on a daily basis the intra-month cash needs by assessing the cash inflows and outflows. In direct response to the impact of the COVID-19 pandemic, management intensified the monitoring of cash needs and frequently updated the forecasts based on the latest available information and expectations related to temporary club closures and re-openings.
The revolving credit facility of \u20ac320 million (2021: \u20ac300 million) has a maturity date of June 2025. Basic-Fit can request the syndicated banks to make the remaining \u20ac30 million of the accordion facility available under the terms of the SFA, but the amount is not yet committed. The facilities can only be cancelled by the lenders upon the receipt of a timely period of notice after an event of default (including non-payment, breach of (financial) covenants or breach of other obligations, in each case subject to materiality thresholds, qualifications and cure periods).
The table below provides an overview of all committed and undrawn facilities as at 31 December 2022:
| (In \u20ac\u00a0millions) | Facility (committed) | Undrawn | Covenant applicable |
|---|---|---|---|
| Term loan | 250.0 | - | Yes |
| Revolving credit facility1 | 320.0 | 99.9 | Yes |
| GO-C facility | 13.3 | - | Yes |
| Schuldschein | 18.0 | - | Yes |
| \u00a0 | 601.3 | 99.9 | \u00a0 |
The following table analyses the Group\u2019s financial liabilities in terms of relevant maturity groupings, based on their contractual maturities for all non-derivative financial liabilities, and net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within twelve months equal their carrying balances, as the impact of discounting is not significant. For interest rate swaps, the cash flows have been estimated using forward interest-rates applicable at the end of the reporting period.
| \u00a0 | 2022 | ||||||
|---|---|---|---|---|---|---|---|
| \u00a0 | Less than 6 months | 6 months to 1 year | 1-2 years | 2-5 years | Over 5 years | Total | Carrying amount |
| Non-derivatives | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Convertible bonds | 2,278 | 2,278 | 4,555 | 13,666 | 305,978 | 328,755 | 247,248 |
| Borrowings1 | 24,094 | 10,625 | 39,126 | 470,423 | \u00a0 | 544,268 | 491,333 |
| Lease liabilities | 110,643 | 108,425 | 216,354 | 596,115 | 618,350 | 1,649,887 | 1,481,539 |
| Trade payables | 149,167 | - | - | - | - | 149,167 | 149,167 |
| Total non-derivatives | 286,182 | 121,328 | 260,035 | 1,080,204 | 924,328 | 2,672,077 | 2,369,287 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Derivative financial liability | - | - | - | - | - | - | - |
| Total derivatives | - | - | - | - | - | - | - |
| \u00a0 | 2021 | ||||||
|---|---|---|---|---|---|---|---|
| \u00a0 | Less than 6 months | 6 months to 1 year | 1-2 years | 2-5 years | Over 5 years | Total | Carrying amount |
| Non-derivatives | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Convertible bonds | 2,278 | 2,278 | 4,555 | 13,667 | 310,533 | 333,311 | 238,581 |
| Borrowings1 | 18,905 | 92,390 | 22,298 | 281,061 | - | 414,654 | 381,560 |
| Lease liabilities | 104,871 | 92,790 | 184,720 | 508,735 | 570,758 | 1,461,874 | 1,305,159 |
| Trade payables | 121,433 | - | - | - | - | 121,433 | 121,433 |
| Total non-derivatives | 247,487 | 187,458 | 211,573 | 803,463 | 881,291 | 2,331,272 | 2,046,733 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Derivative financial liability | 706 | 605 | 333 | - | - | 1,644 | 1,660 |
| Total derivatives | 706 | 605 | 333 | - | - | 1,644 | 1,660 |
Foreign exchange risk
The Group only operates in the Eurozone, so currency risk is limited, due to the fact that all revenues (and almost all expenses) are incurred in euro. There is therefore no significant exposure to foreign currency
fluctuations.
Price risk
The Group has limited exposure to price risk. The Group's main exposure is to fluctuations in energy costs. Basic-Fit has fixed prices for 75% of the expected energy consumption in 2023. To reduce the energy costs per club, Basic-Fit established an energy savings task force to scrutinise the energy consumption and identify where further efficiencies can be achieved.
Interest rate risk and cash flow risk
The Group\u2019s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. Basic-Fit aims to hedge a minimum of 50% of its variable interest exposure. The Group manages its cash flow interest rate risk by mostly using floating-to-fixed interest rate swaps. Under the swap agreements, the Group agrees with another party to exchange, at specified intervals, the difference between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional principal amounts.
The exposure of the Group\u2019s borrowings to interest rate changes and the contractual re-pricing dates of the fixed interest rate borrowings (including lease liabilities) at the end of the reporting period were as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Variable rate borrowings | 483,333 | 373,500 |
| Fixed interest rate borrowings (including lease liabilities) | 1,736,787 | 1,551,800 |
| Total | 2,220,120 | 1,925,300 |
Swaps currently in place cover approximately 42.4% (2021: 54.9%) of the variable loan principal outstanding.
The contracts require settlement of net interest receivable or payable every 90 days.
At the end of the reporting period, the Group had the following variable rate borrowings and interest rate swap contracts (which are disclosed under 'Derivative financial instruments and hedging activities' in note 6.5 Financial instruments) outstanding:
| \u00a0 | 31 December 2022 | \u00a0 | 31 December 2021 | ||||
|---|---|---|---|---|---|---|---|
| \u00a0 | Weighted average interest rate | Balance | % of the total loans | \u00a0 | Weighted average interest rate | Balance | % of the total loans |
| Bank overdrafts and bank loans | 4.36% | 483,333 | 21.77% | \u00a0 | 2.37% | 373,500 | 19.40% |
| Interest rate swaps (notional amount) | \u00a0 | (205,000) | \u00a0 | \u00a0 | \u00a0 | (205,000) | \u00a0 |
| Net exposure to cash flow interest rate risk | \u00a0 | 278,333 | 12.54% | \u00a0 | \u00a0 | 168,500 | 8.75% |
Over the past two years, the following gains/(losses) were recognised in profit or loss and other comprehensive income with respect to interest rate swaps:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Gain (loss) recognised in profit or loss | 3,705 | 1,796 |
| Reclassified from other comprehensive income to profit or loss | - | - |
According to interest rate sensitivity analyses performed for the years ending 31 December 2022 and 2021, the impact on the consolidated statement of profit or loss (post-tax) due to upward or downward movements in the interest rates of 1% were as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Increase by 100 basis points (derivative financial instruments) | - | 1,796 |
| Decrease by 100 basis points (derivative financial instruments) | - | (1,778) |
| Increase by 100 basis points (non-derivative financial instruments) | (3,586) | (1,413) |
| Decrease by 100 basis points (non-derivative financial instruments) | 3,586 | 297 |
There was no impact on components of equity due to upward or downward movements in the interest rates.
The Group\u2019s receivables are carried at amortised cost. They are not subject to interest rate risk as defined in IFRS 7, since neither the carrying amount nor the future cash flows will fluctuate due to changes in market interest rates.
Management did not identify any other market risks that could have a significant impact on the Group.
Reference is made to note 6.5 Financial instruments for the accounting policy with respect to financial assets and liabilities, derivative financial instruments and fair value measurement.
Initial recognition and measurement
Financial assets are classified, at initial recognition, and subsequently measured at amortised cost and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset\u2019s contractual cash flow characteristics and the Group\u2019s business model for managing them. The Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component are measured at the transaction price determined under IFRS 15. Reference is made to the accounting policies in Note 3.2 Revenue.
For a financial asset to be classified and measured at amortised cost, it needs to give rise to cash flows that are \u2018solely payments of principal and interest (SPPI)\u2019 on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at instrument level. The Group\u2019s business model for managing financial assets refers to how it manages its financial assets to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require the delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset.
Subsequent measurement
For the purposes of subsequent measurement, financial assets are classified into two categories:
\u2022 Financial assets at amortised cost (debt instruments)
\u2022 Financial assets at fair value through profit or loss
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of the following conditions are met:
\u2022 The financial asset is held within a business model with the objective of holding financial assets to collect contractual cash flows
and
\u2022 The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding
Financial assets at amortised cost are subsequently measured using the effective interest rate method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
The Group\u2019s financial assets at amortised cost include trade receivables.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the statement of profit or loss.
Impairment of financial assets
Aside from this note, other disclosures relating to impairment of financial assets (trade receivables) are included in note 5.2 Trade and other receivables.
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
For trade receivables, the Group applies a simplified approach for the calculation of ECLs. The Group does not, therefore, track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
\u2022 The rights to receive cash flows from the asset have expired
or
\u2022 The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u2018pass-through\u2019 arrangement and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.
Swaps currently in place cover approximately 42.4% (2021: 54.9%) of the variable loan principal outstanding.
The contracts require settlement of net interest receivable or payable every 90 days.
At the end of the reporting period, the Group had the following variable rate borrowings and interest rate swap contracts (which are disclosed under 'Derivative financial instruments and hedging activities' in note 6.5 Financial instruments) outstanding:
| \u00a0 | 31 December 2022 | \u00a0 | 31 December 2021 | ||||
|---|---|---|---|---|---|---|---|
| \u00a0 | Weighted average interest rate | Balance | % of the total loans | \u00a0 | Weighted average interest rate | Balance | % of the total loans |
| Bank overdrafts and bank loans | 4.36% | 483,333 | 21.77% | \u00a0 | 2.37% | 373,500 | 19.40% |
| Interest rate swaps (notional amount) | \u00a0 | (205,000) | \u00a0 | \u00a0 | \u00a0 | (205,000) | \u00a0 |
| Net exposure to cash flow interest rate risk | \u00a0 | 278,333 | 12.54% | \u00a0 | \u00a0 | 168,500 | 8.75% |
Over the past two years, the following gains/(losses) were recognised in profit or loss and other comprehensive income with respect to interest rate swaps:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Gain (loss) recognised in profit or loss | 3,705 | 1,796 |
| Reclassified from other comprehensive income to profit or loss | - | - |
Financial instruments by category comprise the following:
| Assets | 2022 | 2021 | ||
|---|---|---|---|---|
| \u00a0 | Derivatives at FVPL1 | Loans and receivables | Derivatives at FVPL1 | Loans and receivables |
| Loan receivable | - | 29 | - | 40 |
| Derivative financial instruments (current) | 2,045 | - | - | - |
| Trade and other receivables excluding prepayments | - | 35,646 | - | 9,417 |
| Cash and cash equivalents | - | 43,510 | - | 70,104 |
| Total | 2,045 | 79,185 | - | 79,561 |
| Liabilities | 2022 | 2021 | ||
|---|---|---|---|---|
| \u00a0 | Derivatives at FVPL1 | Other financial liabilities at amortised cost | Derivatives at FVPL1 | Other financial liabilities at amortised cost |
| Borrowings (excluding lease liabilities) | - | 737,111 | - | 617,956 |
| Lease liabilities | - | 1,481,539 | - | 1,305,159 |
| Derivative financial instruments | - | - | 1,660 | - |
| Trade and other payables excluding non-financial liabilities | - | 149,167 | - | 121,433 |
| Total | - | 2,367,817 | 1,660 | 2,044,548 |
The carrying amount of the above financial instruments under 'Assets' represents the maximum exposure to credit risk, with the exception of derivative financial instruments. The Group\u2019s maximum exposure related to financial derivative instruments is disclosed in the maturities table as part of the liquidity risk disclosure in note 6.4 Financial risk management.
See note 6.4 Financial risk management for a description of the credit quality of financial assets that are neither past due nor impaired.
Derivatives are classified as Level 2 valuation, in accordance with the fair value hierarchy as described in IFRS 13.
As at 31 December 2022, the Group had five (2021: five) derivative financial instruments measured at fair value. These interest rate swaps swap quarterly interest payments, where the Group pays a fixed interest and receives interest based on the three-month Euribor rate. The Group does not apply hedge accounting to these swaps.
| \u00a0 | Notional amount | Inception | Termination | Fixed interest | Carrying amount 2022 | Carrying amount 2021 |
|---|---|---|---|---|---|---|
| Interest rate swaps (five) | 205,000 | January 2019 | May 2023 | 0.131% | 2,045 | (1,660) |
| Total | 205,000 | \u00a0 | \u00a0 | \u00a0 | 2,045 | (1,660) |
The movements in 2022 and 2021 arising from cash flows and non-cash changes in the Group\u2018s derivative financial instruments are summarised in the following table:
| \u00a0 | \u00a0 | Cash flows | Other changes (non-cash) | \u00a0 | |
|---|---|---|---|---|---|
| \u00a0 | Balance as at 1 January1 | Repayments | Fair value changes through P&L2 | Fair value changes through OCI3 | Balance as at 31 December1 |
| 2022 | (1,660) | - | 3,705 | - | 2,045 |
| 2021 | (3,456) | - | 1,796 | - | (1,660) |
Initial recognition and subsequent measurement
The Group uses interest rate swaps as derivative financial instruments to hedge its interest rate risks. Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
The Group did not apply hedge accounting for the remaining financial instruments as at 31 December 2022. Therefore, all changes related to these financial instruments will be recognised in profit or loss.
The Group measures financial instruments such as derivatives at fair value at each reporting date.
Fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
\u2022 In the principal market for the asset or liability
or
\u2022 in the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 \u2014 Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 \u2014 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable Level 3 \u2014 Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For all years presented, the Group only held financial instruments that classify as Level 2 fair values. The Group did not hold any Level 1 or Level 3 financial instruments, nor were there any transfers between levels in the year under review. The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques that maximise the use of observable market data where it is available and rely as little as possible on entity-specific estimates. If all significant inputs required to assign a fair value to an instrument are observable, the instrument is included in Level 2. The fair value of the interest rate swaps is calculated as the present value of the estimated future cash flows, based on observable yield curves (discounted cash flow model).
Derivatives are classified as Level 2 valuation, in accordance with the fair value hierarchy as described in IFRS 13.
As at 31 December 2022, the Group had five (2021: five) derivative financial instruments measured at fair value. These interest rate swaps swap quarterly interest payments, where the Group pays a fixed interest and receives interest based on the three-month Euribor rate. The Group does not apply hedge accounting to these swaps.
| \u00a0 | Notional amount | Inception | Termination | Fixed interest | Carrying amount 2022 | Carrying amount 2021 |
|---|---|---|---|---|---|---|
| Interest rate swaps (five) | 205,000 | January 2019 | May 2023 | 0.131% | 2,045 | (1,660) |
| Total | 205,000 | \u00a0 | \u00a0 | \u00a0 | 2,045 | (1,660) |
The movements in 2022 and 2021 arising from cash flows and non-cash changes in the Group\u2018s derivative financial instruments are summarised in the following table:
| \u00a0 | \u00a0 | Cash flows | Other changes (non-cash) | \u00a0 | |
|---|---|---|---|---|---|
| \u00a0 | Balance as at 1 January1 | Repayments | Fair value changes through P&L2 | Fair value changes through OCI3 | Balance as at 31 December1 |
| 2022 | (1,660) | - | 3,705 | - | 2,045 |
| 2021 | (3,456) | - | 1,796 | - | (1,660) |
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the statement of profit or loss.
Financial liabilities at fair value through profit or loss
The Group has not designated any financial liabilities as at fair value through profit or loss.
Initial recognition and subsequent measurement
The Group uses interest rate swaps as derivative financial instruments to hedge its interest rate risks. Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
The Group did not apply hedge accounting for the remaining financial instruments as at 31 December 2022. Therefore, all changes related to these financial instruments will be recognised in profit or loss.
The movements in 2022 and 2021 arising from cash flows and non-cash changes in the Group\u2018s derivative financial instruments are summarised in the following table:
| \u00a0 | \u00a0 | Cash flows | Other changes (non-cash) | \u00a0 | |
|---|---|---|---|---|---|
| \u00a0 | Balance as at 1 January1 | Repayments | Fair value changes through P&L2 | Fair value changes through OCI3 | Balance as at 31 December1 |
| 2022 | (1,660) | - | 3,705 | - | 2,045 |
| 2021 | (3,456) | - | 1,796 | - | (1,660) |
This section includes notes related to provisions, contingencies and commitments.
Provisions consist of:
expected outflows of resources (costs) related to potential legal and other risks;
expected costs associated with the restructuring of operations;
specific legal provisions in France related to retirement benefits ('IDR'); and
other expected outflows of resources (costs) as a result of past events
The movement in provisions over the past two years was as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| As at 1 January | 1,271 | 1,825 |
| Charged to profit or loss | 540 | 417 |
| New in consolidation1 | 166 | - |
| Utilised | (103) | (199) |
| Unused amounts reversed | (194) | (772) |
| As at 31 December | 1,680 | 1,271 |
| Of which: | \u00a0 | \u00a0 |
| Non-current portion of provisions (> 1 year) | 1,285 | 846 |
| Current portion of provisions (< 1 year) | 395 | 425 |
Management is of the opinion that the provision is adequate to resolve all the claims.
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated.
Restructuring provisions are recognised only when the Group has a constructive obligation, which is when:
(i) there is a detailed formal plan that identifies the business or part of the business concerned, the location and number of employees affected, the detailed estimate of the associated costs, and the timeline; and
(ii) the employees affected have been notified of the plan\u2019s main features.
Provisions are measured at the best estimate of the expenditure required to settle the obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the obligation, the carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
Provisions are not recognised for future operating losses. When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit or loss net of any reimbursement.
The cases and claims against the Group often raise difficult and complex factual and legal issues which are subject to many uncertainties and complexities, including but not limited to the facts and circumstances of each particular case and claim, the jurisdiction in which each suit is brought, and the differences in applicable law. In the normal course of business, management consults with legal counsel and certain other experts on matters related to such claims and litigation.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation, using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as an interest expense.
Significant capital expenditure contracted or planned, based on lease commitments for new clubs to be opened after balance date, before the end of the reporting period but not recognised as a liability, are as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Property, plant and equipment | 94,630 | 56,322 |
The Group entered into several lease agreements for which it uses the low-value or short-term exemption option of IFRS 16 and entered into several agreements that do not (or do not yet) meet the definition of a lease.
Future payment obligations under these agreements are as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Within one year | 10,842 | 5,782 |
| After one year but not more than five years | 111,547 | 54,884 |
| More than five years | 157,803 | 81,553 |
| Total | 280,192 | 142,219 |
These lease commitments include lease agreements for new clubs that are not effective yet and that can be dissolved on the basis of resolutive conditions, for example if the required permits are not obtained or if the builiding is not delivered by the lessor in the condition as agreed.
No discount factor is used in determining these commitments.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Future minimum lease payments expected to be received in relation to non-cancellable sub-leases of operating leases | 4,064 | 5,915 |
The Group does not have any contingent rentals or sub-lease expenses.
As at 31 December 2022, approximately \u20ac10.1 million in total had been issued in bank guarantees (31 December 2021: \u20ac9.1 million).
The Group is involved in a number of legal proceedings that have arisen in the ordinary course of business. Although it is not possible to predict the outcome of these disputes with reasonable certainty, management does not expect these pending or potential legal proceedings to have any materially negative impact on the Group's consolidated financial position or profitability. Accordingly, the Group has not recognised any legal provisions in these consolidated financial statements, if it is not probable that an outflow of economic resources will be required. However, the outcome of legal proceedings can be extremely difficult to predict, and the final outcome may be materially different from management's current expectations.
Basic-Fit N.V., Basic Fit International B.V., BF Developments and Basic Fit Nederland B.V. formed a fiscal unity for income tax at year-end 2022. For VAT purposes, the aforementioned companies and B-Securit\u00e9 B.V. formed a fiscal unity at year-end 2022. As a result, the companies within the fiscal unity are jointly and severally liable for each other's income tax and VAT debts.
HealthCity Belgi\u00eb N.V. formed a VAT unity with Basic-Fit Belgium BVBA at year-end 2022. As a result, the companies are jointly and severally liable for each other's VAT debts.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-465": { "value": "Provisions consist of:
expected outflows of resources (costs) related to potential legal and other risks;
expected costs associated with the restructuring of operations;
specific legal provisions in France related to retirement benefits ('IDR'); and
other expected outflows of resources (costs) as a result of past events
The movement in provisions over the past two years was as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| As at 1 January | 1,271 | 1,825 |
| Charged to profit or loss | 540 | 417 |
| New in consolidation1 | 166 | - |
| Utilised | (103) | (199) |
| Unused amounts reversed | (194) | (772) |
| As at 31 December | 1,680 | 1,271 |
| Of which: | \u00a0 | \u00a0 |
| Non-current portion of provisions (> 1 year) | 1,285 | 846 |
| Current portion of provisions (< 1 year) | 395 | 425 |
Management is of the opinion that the provision is adequate to resolve all the claims.
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated.
Restructuring provisions are recognised only when the Group has a constructive obligation, which is when:
(i) there is a detailed formal plan that identifies the business or part of the business concerned, the location and number of employees affected, the detailed estimate of the associated costs, and the timeline; and
(ii) the employees affected have been notified of the plan\u2019s main features.
Provisions are measured at the best estimate of the expenditure required to settle the obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the obligation, the carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
Provisions are not recognised for future operating losses. When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit or loss net of any reimbursement.
The cases and claims against the Group often raise difficult and complex factual and legal issues which are subject to many uncertainties and complexities, including but not limited to the facts and circumstances of each particular case and claim, the jurisdiction in which each suit is brought, and the differences in applicable law. In the normal course of business, management consults with legal counsel and certain other experts on matters related to such claims and litigation.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation, using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as an interest expense.
", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-619": { "value": "Accounting Policy Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Restructuring provisions are recognised only when the Group has a constructive obligation, which is when: (i) there is a detailed formal plan that identifies the business or part of the business concerned, the location and number of employees affected, the detailed estimate of the associated costs, and the timeline; and (ii) the employees affected have been notified of the plan\u2019s main features. Provisions are measured at the best estimate of the expenditure required to settle the obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the obligation, the carrying amount is the present value of those cash flows (when the effect of the time value of money is material). Provisions are not recognised for future operating losses. When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit or loss net of any reimbursement. The cases and claims against the Group often raise difficult and complex factual and legal issues which are subject to many uncertainties and complexities, including but not limited to the facts and circumstances of each particular case and claim, the jurisdiction in which each suit is brought, and the differences in applicable law. In the normal course of business, management consults with legal counsel and certain other experts on matters related to such claims and litigation. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation, using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as an interest expense. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-466": { "value": " 7.2 Contingencies and commitments Capital commitments Significant capital expenditure contracted or planned, based on lease commitments for new clubs to be opened after balance date, before the end of the reporting period but not recognised as a liability, are as follows: \u00a02022 2021 Property, plant and equipment 94,630 56,322 (Long-term) financial obligations The Group entered into several lease agreements for which it uses the low-value or short-term exemption option of IFRS 16 and entered into several agreements that do not (or do not yet) meet the definition of a lease. Future payment obligations under these agreements are as follows: \u00a02022 2021 Within one year 10,842 5,782 After one year but not more than five years 111,547 54,884 More than five years 157,803 81,553 Total 280,192 142,219 These lease commitments include lease agreements for new clubs that are not effective yet and that can be dissolved on the basis of resolutive conditions, for example if the required permits are not obtained or if the builiding is not delivered by the lessor in the condition as agreed. No discount factor is used in determining these commitments. Sub-lease payments \u00a02022 2021 Future minimum lease payments expected to be received in relation to non-cancellable sub-leases of operating leases 4,064 5,915 The Group does not have any contingent rentals or sub-lease expenses. Other commitments As at 31 December 2022, approximately \u20ac10.1 million in total had been issued in bank guarantees (31 December 2021: \u20ac9.1 million). Claims The Group is involved in a number of legal proceedings that have arisen in the ordinary course of business. Although it is not possible to predict the outcome of these disputes with reasonable certainty, management does not expect these pending or potential legal proceedings to have any materially negative impact on the Group's consolidated financial position or profitability. Accordingly, the Group has not recognised any legal provisions in these consolidated financial statements, if it is not probable that an outflow of economic resources will be required. However, the outcome of legal proceedings can be extremely difficult to predict, and the final outcome may be materially different from management's current expectations. Tax group liability (the Netherlands) Basic-Fit N.V., Basic Fit International B.V., BF Developments and Basic Fit Nederland B.V. formed a fiscal unity for income tax at year-end 2022. For VAT purposes, the aforementioned companies and B-Securit\u00e9 B.V. formed a fiscal unity at year-end 2022. As a result, the companies within the fiscal unity are jointly and severally liable for each other's income tax and VAT debts. Tax group liability (Belgium) HealthCity Belgi\u00eb N.V. formed a VAT unity with Basic-Fit Belgium BVBA at year-end 2022. As a result, the companies are jointly and severally liable for each other's VAT debts. ", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-467": { "value": " Capital commitments Significant capital expenditure contracted or planned, based on lease commitments for new clubs to be opened after balance date, before the end of the reporting period but not recognised as a liability, are as follows: \u00a02022 2021 Property, plant and equipment 94,630 56,322 (Long-term) financial obligations The Group entered into several lease agreements for which it uses the low-value or short-term exemption option of IFRS 16 and entered into several agreements that do not (or do not yet) meet the definition of a lease. Future payment obligations under these agreements are as follows: \u00a02022 2021 Within one year 10,842 5,782 After one year but not more than five years 111,547 54,884 More than five years 157,803 81,553 Total 280,192 142,219 These lease commitments include lease agreements for new clubs that are not effective yet and that can be dissolved on the basis of resolutive conditions, for example if the required permits are not obtained or if the builiding is not delivered by the lessor in the condition as agreed. No discount factor is used in determining these commitments. Other commitments As at 31 December 2022, approximately \u20ac10.1 million in total had been issued in bank guarantees (31 December 2021: \u20ac9.1 million). Claims The Group is involved in a number of legal proceedings that have arisen in the ordinary course of business. Although it is not possible to predict the outcome of these disputes with reasonable certainty, management does not expect these pending or potential legal proceedings to have any materially negative impact on the Group's consolidated financial position or profitability. Accordingly, the Group has not recognised any legal provisions in these consolidated financial statements, if it is not probable that an outflow of economic resources will be required. However, the outcome of legal proceedings can be extremely difficult to predict, and the final outcome may be materially different from management's current expectations. Tax group liability (the Netherlands) Basic-Fit N.V., Basic Fit International B.V., BF Developments and Basic Fit Nederland B.V. formed a fiscal unity for income tax at year-end 2022. For VAT purposes, the aforementioned companies and B-Securit\u00e9 B.V. formed a fiscal unity at year-end 2022. As a result, the companies within the fiscal unity are jointly and severally liable for each other's income tax and VAT debts. Tax group liability (Belgium) HealthCity Belgi\u00eb N.V. formed a VAT unity with Basic-Fit Belgium BVBA at year-end 2022. As a result, the companies are jointly and severally liable for each other's VAT debts. ", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-473": { "value": " Claims The Group is involved in a number of legal proceedings that have arisen in the ordinary course of business. Although it is not possible to predict the outcome of these disputes with reasonable certainty, management does not expect these pending or potential legal proceedings to have any materially negative impact on the Group's consolidated financial position or profitability. Accordingly, the Group has not recognised any legal provisions in these consolidated financial statements, if it is not probable that an outflow of economic resources will be required. However, the outcome of legal proceedings can be extremely difficult to predict, and the final outcome may be materially different from management's current expectations. ", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-475": { "value": " 8.1 Remunerations of key management personnel Compensation of the Management Board members and other key management personnel was as follows: \u00a0Ren\u00e9 Moos (CEO) Hans van der Aar (CFO) Other key management personnel Total \u00a02022 2021 2022 2021 2022 2021 2022 2021 Base Salary 729 729 601 562 703 500 2,033 1,791 Pension allowance 109 109 90 84 40 37 239 230 Total fixed compensation 838 838 691 646 743 537 2,272 2,021 Short-term incentive 182 - 198 - 232 - 612 - Long-term share-based payments -22 47 -10 27 21 64 -11 138 Total variable compensation 160 47 188 27 253 64 601 138 Social charges 17 15 13 13 212 187 242 215 Other 32 36 43 45 44 37 119 118 Total other benefits/expenses 49 51 56 58 256 224 361 333 Total remuneration 1,047 936 935 731 1,252 825 3,234 2,492 In 2022, the annual base salaries for Ren\u00e9 Moos and Hans van der Aar amounted to \u20ac729,063 (2021: \u20ac729,063) and \u20ac601,209 (2021: \u20ac561,879) respectively. The members of the Management Board do not participate in the Company\u2019s collective pension scheme but receive a comparable payment (pension allowance) set at a maximum of 15% of their base salary. The remuneration reported as long-term share-based payments is based on costs incurred under IFRS (see note 3.5 Share-based payments). The short-term incentive (STI) achievement for 2022 for the Management Board was approved by the Supervisory Board on 8 February 2023. This resulted in an STI pay-out for 2022 of 25% of the annual base salary for the CEO and 33% for the CFO. The STI amount will be paid in 2023 after the adoption of the Financial Statements for 2022. In reaction to the impact of the COVID-19 pandemic, no short-term incentive was granted to the Management Board and other key management personnel for 2021. 'Other key management personnel' pertains to employees with authority and responsibility for planning, directing and controlling the activities of the entity, either directly or indirectly (COO and CCO). Details of the performance shares granted to the members of the Management Board as long-term share-based payments are as follows: Board member Year of grant Outstanding at 1 January 2022 Number of shares granted on target 2022 Performance adjustment / forfeited Vested in 2022 Outstanding at 31 December 2022 Fair value at grant date lock-up date Ren\u00e9 Moos 2018 14,050 - (4,683) (9,367) - \u20ac27.00 15-6-2023 \u00a02019 13,023 - (13,023) - - \u20ac30.25 9-5-2024 \u00a02020 28,535 - - - 28,535 \u20ac15.33 13-5-2025 \u00a02021 7,634 - - - 7,634 \u20ac38.20 15-12-2026 \u00a02022 - 11,634 - - 11,634 \u20ac37.60 16-5-2027 Total shares \u00a063,242 11,634 (17,706) (9,367) 47,803 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Hans van der Aar 2018 10,828 - (3,609) (7,219) - \u20ac27.00 15-6-2023 \u00a02019 8,364 - (8,364) - - \u20ac30.25 9-5-2024 \u00a02020 18,326 - - - 18,326 \u20ac15.33 13-5-2025 \u00a02021 4,903 - - - 4,903 \u20ac38.20 15-12-2026 \u00a02022 - 7,995 - - 7,995 \u20ac37.60 16-5-2027 Total shares \u00a042,421 7,995 (11,973) (7,219) 31,224 \u00a0\u00a0 All awards under the share plans will vest on the condition that the Management Board members are still employed at Basic-Fit. The awards can increase by up to 25% in the event of outperformance. The awards for 2020 were granted under the specific reservation that the award and its vesting could be subject to limitations if government requirements related to, for example, government grants require the Company to apply these limitations and it is essential and necessary or mandatory for the Company to apply for these government grants. As a consequence, the years 2020 and 2021 will be disregarded for the calculation and the maximum number of shares that is expected to vest in 2023 is limited to 33.33% of the achieved performance range for that year. As at 31 December 2022, the members of the Management Board did not have any loans outstanding with Basic-Fit. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-476": { "value": " 8.1 Remunerations of key management personnel Compensation of the Management Board members and other key management personnel was as follows: \u00a0Ren\u00e9 Moos (CEO) Hans van der Aar (CFO) Other key management personnel Total \u00a02022 2021 2022 2021 2022 2021 2022 2021 Base Salary 729 729 601 562 703 500 2,033 1,791 Pension allowance 109 109 90 84 40 37 239 230 Total fixed compensation 838 838 691 646 743 537 2,272 2,021 Short-term incentive 182 - 198 - 232 - 612 - Long-term share-based payments -22 47 -10 27 21 64 -11 138 Total variable compensation 160 47 188 27 253 64 601 138 Social charges 17 15 13 13 212 187 242 215 Other 32 36 43 45 44 37 119 118 Total other benefits/expenses 49 51 56 58 256 224 361 333 Total remuneration 1,047 936 935 731 1,252 825 3,234 2,492 In 2022, the annual base salaries for Ren\u00e9 Moos and Hans van der Aar amounted to \u20ac729,063 (2021: \u20ac729,063) and \u20ac601,209 (2021: \u20ac561,879) respectively. The members of the Management Board do not participate in the Company\u2019s collective pension scheme but receive a comparable payment (pension allowance) set at a maximum of 15% of their base salary. The remuneration reported as long-term share-based payments is based on costs incurred under IFRS (see note 3.5 Share-based payments). The short-term incentive (STI) achievement for 2022 for the Management Board was approved by the Supervisory Board on 8 February 2023. This resulted in an STI pay-out for 2022 of 25% of the annual base salary for the CEO and 33% for the CFO. The STI amount will be paid in 2023 after the adoption of the Financial Statements for 2022. In reaction to the impact of the COVID-19 pandemic, no short-term incentive was granted to the Management Board and other key management personnel for 2021. 'Other key management personnel' pertains to employees with authority and responsibility for planning, directing and controlling the activities of the entity, either directly or indirectly (COO and CCO). Details of the performance shares granted to the members of the Management Board as long-term share-based payments are as follows: Board member Year of grant Outstanding at 1 January 2022 Number of shares granted on target 2022 Performance adjustment / forfeited Vested in 2022 Outstanding at 31 December 2022 Fair value at grant date lock-up date Ren\u00e9 Moos 2018 14,050 - (4,683) (9,367) - \u20ac27.00 15-6-2023 \u00a02019 13,023 - (13,023) - - \u20ac30.25 9-5-2024 \u00a02020 28,535 - - - 28,535 \u20ac15.33 13-5-2025 \u00a02021 7,634 - - - 7,634 \u20ac38.20 15-12-2026 \u00a02022 - 11,634 - - 11,634 \u20ac37.60 16-5-2027 Total shares \u00a063,242 11,634 (17,706) (9,367) 47,803 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Hans van der Aar 2018 10,828 - (3,609) (7,219) - \u20ac27.00 15-6-2023 \u00a02019 8,364 - (8,364) - - \u20ac30.25 9-5-2024 \u00a02020 18,326 - - - 18,326 \u20ac15.33 13-5-2025 \u00a02021 4,903 - - - 4,903 \u20ac38.20 15-12-2026 \u00a02022 - 7,995 - - 7,995 \u20ac37.60 16-5-2027 Total shares \u00a042,421 7,995 (11,973) (7,219) 31,224 \u00a0\u00a0 All awards under the share plans will vest on the condition that the Management Board members are still employed at Basic-Fit. The awards can increase by up to 25% in the event of outperformance. The awards for 2020 were granted under the specific reservation that the award and its vesting could be subject to limitations if government requirements related to, for example, government grants require the Company to apply these limitations and it is essential and necessary or mandatory for the Company to apply for these government grants. As a consequence, the years 2020 and 2021 will be disregarded for the calculation and the maximum number of shares that is expected to vest in 2023 is limited to 33.33% of the achieved performance range for that year. As at 31 December 2022, the members of the Management Board did not have any loans outstanding with Basic-Fit. 8.2 Remunerations of members of the Supervisory Board The total remuneration for Supervisory Board members was \u20ac307 thousand in 2022 (2021: \u20ac341 thousand). \u00a02022 2021 Kees van der Graaf 65 65 Hans Willemse 58 58 Carin Gorter 60 60 Pieter de Jong 13 50 Herman Rutgers 55 55 Rob van der Heijden 56 53 Total 307 341 None of the Supervisory Board members have been granted, nor do they possess, any Basic-Fit options or shares, with the exception of Kees van der Graaf, who personally held 3,275 shares, Herman Rutgers who held 3,000 shares and Hans Willemse who held 40,029 shares in Basic-Fit on 31 December 2022. 8.3 Related party transactions Identification of related parties All legal entities that can be controlled, jointly controlled or significantly influenced are considered related parties. Entities that can control the Company or other subsidiaries of the Group are also considered related parties. In addition, statutory and supervisory directors and close relatives are regarded as related parties. The following transactions were carried out with related parties: Management Board and Supervisory Board compensation; Purchases from/sales to related parties (mainly leases from related parties); and Acquisition of fitness clubs (in 2022). All transactions with related parties are made at terms equivalent to those that prevail in arm\u2019s length transactions.\u00a0Management Board compensation Management board compensation is disclosed in note 8.1 Remunerations of key management personnel and note 8.2 Remunerations of members of the Supervisory Board. Purchases from/sales to related parties The table below provides the total amount of purchases from and sales for the relevant financial year to entities in which Management Board members have an interest. In addition, the table provides an overview of all balances held with these related parties. \u00a02022 2021 Sales to related parties 48 21 Purchases from related parties 6,408 5,537 Amounts owed by related parties1 38 - Amounts owed to related parties2 695 399 Included in trade receivables - note 5.2 Trade and other receivables Included in lease liabilities and trade and in other payables - note 4.4 Right-of-use assets and lease liabilities and note 5.4 Trade and other payables Outstanding balances at the year-end are unsecured, interest-free and settled in cash. No guarantees have been provided or received for any related party receivables or payables. Acquisition of fitness clubs In 2022, Basic-Fit acquired three fitness clubs from a company related to the CEO of Basic-Fit N.V. for a total amount of \u20ac4.1 million. Related party leases Future related party lease obligations (as accounted for as right-of-use assets and lease liabilities) are as follows: \u00a02022 2021 Within one year 6,072 6,046 After one year but not more than five years 24,148 24,185 More than five years 35,094 40,973 Total 65,314 71,204 The amounts disclosed relate to the amounts to be invoiced by related parties. ", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-479": { "value": "The following table sets out the aggregate fees incurred during the years for professional audit services and other services provided to the Group by Ernst & Young Accountants LLP and their network inside and outside the Netherlands, as referred to in Section 1(1) of the Dutch Audit Firms Supervision Act (Dutch: Wta, Wet toezicht accountantsorganisaties):
| \u00a0 | EY Accountants LLP | Other EY member firms and affiliates | Total network | |||
|---|---|---|---|---|---|---|
| \u00a0 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
| Audit of the financial statements | 842 | 848 | 116 | 113 | 958 | 961 |
| Other audit procedures | 98 | 63 | 2 | 15 | 100 | 78 |
| Total | 940 | 911 | 118 | 128 | 1,058 | 1,039 |