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.
\nThe Group is active in six countries: the Netherlands, Belgium, Luxembourg, France, Spain and Germany.
\nWith 1,402 clubs and more than 3,800,000 memberships as at 31 December 2023, 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.
\nThe Group's consolidated financial statements for the year ended 31 December 2023 were authorised for issue in accordance with a resolution of the Management Board on 13 March 2024.
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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "ixv-2": { "value": "N.V.", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "ixv-3": { "value": "the Netherlands", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "ixv-4": { "value": "Wegalaan 60, Hoofddorp, the Netherlands", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "ixv-1": { "value": "the Netherlands", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "ixv-5": { "value": "the Netherlands, Belgium, Luxembourg, France, Spain and Germany", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "ixv-6": { "value": "With 1,402 clubs and more than 3,800,000 memberships as at 31 December 2023, 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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "ixv-307": { "value": "\nThe Group's consolidated financial statements for the year ended 31 December 2023 were authorised for issue in accordance with a resolution of the Management Board on 13 March 2024.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "ixv-308": { "value": "\nThese 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.1, 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.2, Malaga (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) (100%3 interest of BF Developments B.V.)
Basic Fit International B.V. is an intermediate holding company and operates as international headquarters of the Group.
\nBasic Fit France S.A. and BF Developments B.V. are holding companies and do not run fitness clubs or undertake other operations.
\nB-Securit\u00e9 B.V. is involved in the remote surveillance of a vast majority of the fitness clubs that are operated by the Group.
Since the end of November 2023, the Group has a 25% interest in HKNA Participaties B.V. (note 4.7 Investment in an associate). HKNA Participaties B.V. and its subsidiaries are involved in maintenance, repair and cleaning activities in commercial buildings in the countries where Basic-Fit operates fitness clubs.
On 4 July 2023, the Group acquired the remaining 49% interest in B-Securit\u00e9 B.V., increasing1 its ownership interest to 100%. The Group paid a cash consideration of \u20ac350 thousand to the non-controlling shareholder. The carrying value of the net assets of B-Securit\u00e9 B.V. was nil. The difference between consideration paid and carrying amount of the net assets of \u20ac350 thousand was recognised in retained earnings.
At the end of November 2023, the Group acquired a 25% interest in HKNA Participaties B.V., which (with its 100% subsidiaries) is involved in maintenance, repair and cleaning activities in commercial buildings in the Netherlands, Belgium, Luxembourg, France, Spain and Germany. HKNA Participaties B.V. is a private entity that is not listed on any public exchange. The registered office is in Hoofddorp, the Netherlands. The Group\u2019s interest in HKNA Participaties B.V. is considered individually immaterial and accounted for using the equity method in the consolidated financial statements.
\nThe carrying amount at 31 December 2023 of \u20ac750 thousand consists of the acquisition price of \u20ac1.5 million less \u20ac750 thousand dividend received in December 2023. In 2023, no result from this associate was recognised. As at 31 December 2023, the Group had no contingent liabilities or commitments relating to its interest in HKNA Participaties B.V.
Investments in associates are accounted for using the equity method. The aggregate of the Group\u2019s share in the profit or loss of an associate is shown on the face of the statement of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate.
\nAccording to the equity method, the investment in an associate is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group\u2019s share of net assets of the associate since the acquisition date. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is not tested for impairment separately. Thus, reversals of impairments may effectively include reversal of goodwill impairments. Impairments and reversals are presented within \u2018Share of profit of an associate\u2019 in the statement of profit or loss.
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.1, 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.2, Malaga (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) (100%3 interest of BF Developments B.V.)
Basic Fit International B.V. is an intermediate holding company and operates as international headquarters of the Group.
\nBasic Fit France S.A. and BF Developments B.V. are holding companies and do not run fitness clubs or undertake other operations.
\nB-Securit\u00e9 B.V. is involved in the remote surveillance of a vast majority of the fitness clubs that are operated by the Group.
Since the end of November 2023, the Group has a 25% interest in HKNA Participaties B.V. (note 4.7 Investment in an associate). HKNA Participaties B.V. and its subsidiaries are involved in maintenance, repair and cleaning activities in commercial buildings in the countries where Basic-Fit operates fitness clubs.
All acquisitions are considered good opportunities for further growth and the acquisition in Germany 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 in the locations and that these locations are a good fit with 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.
\nTotal key management remuneration was \u20ac5,018 thousand (2022: \u20ac3,541 thousand), allocated to the following remuneration categories: Short-term employee benefits \u20ac3,798 thousand (2022: \u20ac3,313 thousand), post-employment benefits \u20ac248 thousand (2022: \u20ac239 thousand) and share-based payments \u20ac972 thousand (2022: minus \u20ac11 thousand).
\nCompensation of the Management Board members and other key management personnel was as follows:
\n| \u00a0 | Ren\u00e9 Moos (CEO) | Hans van der Aar (CFO) | Other key management personnel | Total | ||||
|---|---|---|---|---|---|---|---|---|
| \u00a0 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
| Base Salary | 729 | 729 | 651 | 601 | 797 | 703 | 2,177 | 2,033 |
| Pension allowance | 109 | 109 | 98 | 90 | 41 | 40 | 248 | 239 |
| Total fixed compensation | 838 | 838 | 749 | 691 | 838 | 743 | 2,425 | 2,272 |
| Short-term incentive | 263 | 182 | 247 | 198 | 310 | 232 | 820 | 612 |
| Long-term share-based payments | 399 | -22 | 274 | -10 | 299 | 21 | 972 | -11 |
| Total variable compensation | 662 | 160 | 521 | 188 | 609 | 253 | 1,792 | 601 |
| Social charges | 18 | 17 | 15 | 13 | 305 | 212 | 338 | 242 |
| Other | 39 | 32 | 39 | 43 | 62 | 44 | 140 | 119 |
| Total other benefits/expenses | 57 | 49 | 54 | 56 | 367 | 256 | 478 | 361 |
| Total remuneration | 1,557 | 1,047 | 1,324 | 935 | 1,814 | 1,252 | 4,695 | 3,234 |
In 2023, the annual base salaries for Ren\u00e9 Moos and Hans van der Aar amounted to \u20ac729 thousand (2022: \u20ac729 thousand) and \u20ac651 thousand (2022: \u20ac601 thousand) respectively.
\nThe 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.
\nThe remuneration reported as long-term share-based payments is based on costs incurred under IFRS (see note 3.5 Share-based payments).
\nThe short-term incentive (STI) achievement for 2023 for the Management Board was approved by the Supervisory Board on 6 February 2024. This resulted in an STI pay-out for 2023 of 36% of the annual base salary for the CEO and 38% for the CFO. The STI amount will be paid in 2024 after the adoption of the Financial Statements for 2023.
\n'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).
\nDetails of the performance shares granted to the members of the Management Board as long-term share-based payments are as follows:
\n| Board member | Year of grant | Outstanding at 1 January 2023 | Number of shares granted on target 2023 | Performance adjustment / forfeited | Vested in 2023 | Outstanding at 31 December 2023 | Fair value at grant date | lock-up date |
|---|---|---|---|---|---|---|---|---|
| Ren\u00e9 Moos | 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 |
| \u00a0 | 2023 | - | 12,806 | - | - | 12,806 | \u20ac34.16 | 21-6-2028 |
| Total shares | \u00a0 | 47,803 | 12,806 | (28,535) | - | 32,074 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Hans van der Aar | 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 |
| \u00a0 | 2023 | - | 9,532 | - | - | 9,532 | \u20ac34.16 | 21-6-2028 |
| Total shares | \u00a0 | 31,224 | 9,532 | (18,326) | - | 22,430 | \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.
\nAs at 31 December 2023, the members of the Management Board did not have any loans outstanding with Basic-Fit.
The total remuneration for Supervisory Board members was \u20ac323 thousand in 2023 (2022: \u20ac307 thousand).
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Kees van der Graaf | 16 | 65 |
| Jan van Nieuwenhuizen | 45 | - |
| Hans Willemse | 58 | 58 |
| Carin Gorter | 60 | 60 |
| Pieter de Jong | - | 13 |
| Herman Rutgers | 55 | 55 |
| Rob van der Heijden | 58 | 56 |
| Jo\u00eblle Frijters | 31 | - |
| Total | 323 | 307 |
None of the Supervisory Board members have been granted, nor do they possess, any Basic-Fit options or shares, with the exception of Herman Rutgers who held 3,000 shares and Hans Willemse who held 40,029 shares in Basic-Fit on 31 December 2023.
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.
\nThe following transactions were carried out with related parties:
Management Board and Supervisory Board compensation;
Purchases from/sales to related parties (Key management personnel); and
Acquisition of fitness clubs from Key management personnel1 (in 2022);
Purchases from an associate (starting December 2023)
All transactions with related parties are made at terms equivalent to those that prevail in arm\u2019s length transactions.\u00a0
\nManagement Board compensation and Supervisory Board compensation
Management Board compensation is disclosed in note 8.1 Remunerations of key management personnel and Supervisory Board compensation is disclosed in note 8.2 Remunerations of members of the Supervisory Board.
Purchases from/sales to related parties (Key management personnel)
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 (mainly leases from related parties). In addition, the table provides an overview of all balances held with these related parties.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Sales to related parties | - | 48 |
| Purchases from related parties | 7,167 | 6,408 |
| Amounts owed by related parties1 | - | 38 |
| Amounts owed to related parties2 | 1,031 | 695 |
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.
\nPurchases from an associate
Since the acquisition of a 25% interest in HKNA Participaties B.V., purchases from (subsidiaries) of the associate amounted to \u20ac5.4 million. The amount owed to HKNA Participaties B.V. and its subsidiaries at 31 December 2023 was \u20ac10.8 million.
Future related party lease obligations (as accounted for as right-of-use assets and lease liabilities) are as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Within one year | 7,033 | 6,072 |
| After one year but not more than five years | 27,823 | 24,148 |
| More than five years | 36,394 | 35,094 |
| Total | 71,250 | 65,314 |
The amounts disclosed relate to the amounts to be invoiced by related parties. The increase is the result of indexation of all lease contracts, renewal of one lease contract and one newly agreed lease contract.
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.1, 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.2, Malaga (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) (100%3 interest of BF Developments B.V.)
Basic Fit International B.V. is an intermediate holding company and operates as international headquarters of the Group.
\nBasic Fit France S.A. and BF Developments B.V. are holding companies and do not run fitness clubs or undertake other operations.
\nB-Securit\u00e9 B.V. is involved in the remote surveillance of a vast majority of the fitness clubs that are operated by the Group.
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.1, 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.2, Malaga (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) (100%3 interest of BF Developments B.V.)
Basic Fit International B.V. is an intermediate holding company and operates as international headquarters of the Group.
\nBasic Fit France S.A. and BF Developments B.V. are holding companies and do not run fitness clubs or undertake other operations.
\nB-Securit\u00e9 B.V. is involved in the remote surveillance of a vast majority of the fitness clubs that are operated by the Group.
On 4 July 2023, the Group acquired the remaining 49% interest in B-Securit\u00e9 B.V., increasing1 its ownership interest to 100%. The Group paid a cash consideration of \u20ac350 thousand to the non-controlling shareholder. The carrying value of the net assets of B-Securit\u00e9 B.V. was nil. The difference between consideration paid and carrying amount of the net assets of \u20ac350 thousand was recognised in retained earnings.
Since the end of November 2023, the Group has a 25% interest in HKNA Participaties B.V. (note 4.7 Investment in an associate). HKNA Participaties B.V. and its subsidiaries are involved in maintenance, repair and cleaning activities in commercial buildings in the countries where Basic-Fit operates fitness clubs.
At the end of November 2023, the Group acquired a 25% interest in HKNA Participaties B.V., which (with its 100% subsidiaries) is involved in maintenance, repair and cleaning activities in commercial buildings in the Netherlands, Belgium, Luxembourg, France, Spain and Germany. HKNA Participaties B.V. is a private entity that is not listed on any public exchange. The registered office is in Hoofddorp, the Netherlands. The Group\u2019s interest in HKNA Participaties B.V. is considered individually immaterial and accounted for using the equity method in the consolidated financial statements.
\nThe carrying amount at 31 December 2023 of \u20ac750 thousand consists of the acquisition price of \u20ac1.5 million less \u20ac750 thousand dividend received in December 2023. In 2023, no result from this associate was recognised. As at 31 December 2023, the Group had no contingent liabilities or commitments relating to its interest in HKNA Participaties B.V.
Investments in associates are accounted for using the equity method. The aggregate of the Group\u2019s share in the profit or loss of an associate is shown on the face of the statement of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate.
\nAccording to the equity method, the investment in an associate is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group\u2019s share of net assets of the associate since the acquisition date. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is not tested for impairment separately. Thus, reversals of impairments may effectively include reversal of goodwill impairments. Impairments and reversals are presented within \u2018Share of profit of an associate\u2019 in the statement of profit or loss.
Since the end of November 2023, the Group has a 25% interest in HKNA Participaties B.V. (note 4.7 Investment in an associate). HKNA Participaties B.V. and its subsidiaries are involved in maintenance, repair and cleaning activities in commercial buildings in the countries where Basic-Fit operates fitness clubs.
At the end of November 2023, the Group acquired a 25% interest in HKNA Participaties B.V., which (with its 100% subsidiaries) is involved in maintenance, repair and cleaning activities in commercial buildings in the Netherlands, Belgium, Luxembourg, France, Spain and Germany. HKNA Participaties B.V. is a private entity that is not listed on any public exchange. The registered office is in Hoofddorp, the Netherlands. The Group\u2019s interest in HKNA Participaties B.V. is considered individually immaterial and accounted for using the equity method in the consolidated financial statements.
\nThe carrying amount at 31 December 2023 of \u20ac750 thousand consists of the acquisition price of \u20ac1.5 million less \u20ac750 thousand dividend received in December 2023. In 2023, no result from this associate was recognised. As at 31 December 2023, the Group had no contingent liabilities or commitments relating to its interest in HKNA Participaties B.V.
Investments in associates are accounted for using the equity method. The aggregate of the Group\u2019s share in the profit or loss of an associate is shown on the face of the statement of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate.
\nAccording to the equity method, the investment in an associate is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group\u2019s share of net assets of the associate since the acquisition date. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is not tested for impairment separately. Thus, reversals of impairments may effectively include reversal of goodwill impairments. Impairments and reversals are presented within \u2018Share of profit of an associate\u2019 in the statement of profit or loss.
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.
\nThe consolidated financial statements are presented in euros and all values are rounded to the nearest thousand (\u20ac\u00a0x 1,000), except when otherwise indicated.
\nThe 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.
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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "ixv-318": { "value": "\nThe 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.
\nIn 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.
\nThe key assumptions related to the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of resulting in 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.
\nThe table below presents the areas that involve a higher degree of judgement or areas where assumptions and estimates are significant to the financial statements:
\n| \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 | 6.5 |
Detailed explanations of the degree of judgment and assumptions used are included under each of the respective sections in the notes to the financial statements as referenced above.
When making judgement and assumptions, management considered climate-related matters and concluded that such matters have no material impact on the business and the assumptions impacting the financial statements.
\nIn 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):
\nRecognition 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 revenue recognition estimates relate to the identification of performance obligations and the revenue allocation as a result of the performance obligations identified.
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.
The recoverable amount as at 31 December 2023 was determined based on value-in-use calculations, using the most recent cash flow projections based on financial budgets approved by management, covering a five-year period. These budgets are prepared separately for each of the Group\u2019s CGUs to which the individual assets are allocated. The cash flow projections only include existing clubs and do not take into account any new club openings.
\nThe recoverable amount as at 31 December 2022 was determined based on fair value less cost of disposal (FVLCD) 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 included both existing clubs and new club openings.
\nFor both years, discount rates used are post-tax and reflect current market assessments of the time value of money and the risks specific to the asset. Management considered the effects of applying a pre-tax approach and concluded that this will not materially change the outcome of the impairment test.
\nThe pre- and post-tax discount rates applied to the cash flow projections are shown in the tables below.
\nPost-tax WACC discount rate
\n| \u00a0 | Netherlands | Belgium | Luxembourg | France | Spain | Germany |
|---|---|---|---|---|---|---|
| 20231 | 8.5% | 9.1% | 8.5% | 9.0% | 10.1% | 8.4% |
| 20222 | 10.2% | 10.9% | 10.2% | 10.8% | 12.1% | 10.2% |
Pre-tax WACC discount rate
\n| \u00a0 | Netherlands | Belgium | Luxembourg | France | Spain | Germany |
|---|---|---|---|---|---|---|
| 20231 | 10.6% | 11.4% | 10.7% | 10.8% | 12.2% | 10.4% |
| 20222 | 12.7% | 13.7% | 13.0% | 13.0% | 15.1% | 12.2% |
Climate related risks have been taken into account when determining the values of the key assumptions, but had no material impact on the measurement of the recoverable amount.
\nThe value-in-use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years.
\nThe calculations of value in use for the CGUs are most sensitive to the following assumptions:
\n\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 management\u2019s expectations of market development, and industry expectations.
\nDiscount rates \u2013 Discount rates represents management\u2019s market assessment of the risks specific to the CGUs regarding the time value of money and the individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Group and its CGUs and is derived from its weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the Group\u2019s investors. The cost of debt is based on the interest-bearing borrowings the Group is obliged to service. CGU-specific risk is incorporated by applying individual beta factors. The beta factors are evaluated annually based on publicly available market data. Adjustments to the discount rate are made to factor in the specific amount and timing of the future tax flows in order to reflect a pre-tax discount rate.
\nRevenue growth \u2013 The growth rates are based on historical experience of membership developments taking into account 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.
\nThe budget used for the 2023 impairment testing assumes a compound annual growth rate of revenues over the forecast budget period 2024-2028 of 4.3% for the Netherlands, 4.9% for Belgium, 1.1% for Luxembourg, 5.6% for France, 10.4% for Spain and 26.5% for Germany. After the forecast period, revenues are expected to increase by 2.0% annually, which is the lowest of the current risk free rate and the long term inflation forecast.
\nThe budget used for the 2022 impairment testing (which was based on FVLCD calculations that included both existing clubs and new club openings) assumed a compound annual growth rate of revenues over the forecast budget period 2023-2027 of 9% for the Netherlands, 11% for Belgium, 4% for Luxembourg, 18% for France, 40% for Spain and 159% for Germany. Cash flows beyond the five-year period were extrapolated using a terminal growth rate of 2.0% for all CGUs, which was the lowest of the risk free rate and the long term inflation forecast at the end of December 2022.
\nEBITDA 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 an increase in revenues per member and maturation of immature clubs.
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.
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.
Costs incurred to configure or customise a 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 used their 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.
\nSpecifically, when 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.
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.
\nThe 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. These factors include 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.
\nAfter 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).
\nThe 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).
\nBasic-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
Significant judgement is required in determining the expected credit loss allowance. For this purpose, any change in the risk profile of members following the ongoing economic uncertainty prevailing since 2022 should be considered.
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.
\nIn 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.
\nThe key assumptions related to the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of resulting in 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.
\nThe table below presents the areas that involve a higher degree of judgement or areas where assumptions and estimates are significant to the financial statements:
\n| \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 | 6.5 |
Detailed explanations of the degree of judgment and assumptions used are included under each of the respective sections in the notes to the financial statements as referenced above.
Significant revenue recognition estimates relate to the identification of performance obligations and the revenue allocation as a result of the performance obligations identified.
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.
The recoverable amount as at 31 December 2023 was determined based on value-in-use calculations, using the most recent cash flow projections based on financial budgets approved by management, covering a five-year period. These budgets are prepared separately for each of the Group\u2019s CGUs to which the individual assets are allocated. The cash flow projections only include existing clubs and do not take into account any new club openings.
\nThe recoverable amount as at 31 December 2022 was determined based on fair value less cost of disposal (FVLCD) 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 included both existing clubs and new club openings.
\nFor both years, discount rates used are post-tax and reflect current market assessments of the time value of money and the risks specific to the asset. Management considered the effects of applying a pre-tax approach and concluded that this will not materially change the outcome of the impairment test.
\nThe pre- and post-tax discount rates applied to the cash flow projections are shown in the tables below.
\nPost-tax WACC discount rate
\n| \u00a0 | Netherlands | Belgium | Luxembourg | France | Spain | Germany |
|---|---|---|---|---|---|---|
| 20231 | 8.5% | 9.1% | 8.5% | 9.0% | 10.1% | 8.4% |
| 20222 | 10.2% | 10.9% | 10.2% | 10.8% | 12.1% | 10.2% |
Pre-tax WACC discount rate
\n| \u00a0 | Netherlands | Belgium | Luxembourg | France | Spain | Germany |
|---|---|---|---|---|---|---|
| 20231 | 10.6% | 11.4% | 10.7% | 10.8% | 12.2% | 10.4% |
| 20222 | 12.7% | 13.7% | 13.0% | 13.0% | 15.1% | 12.2% |
Climate related risks have been taken into account when determining the values of the key assumptions, but had no material impact on the measurement of the recoverable amount.
\nThe value-in-use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years.
\nThe calculations of value in use for the CGUs are most sensitive to the following assumptions:
\n\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 management\u2019s expectations of market development, and industry expectations.
\nDiscount rates \u2013 Discount rates represents management\u2019s market assessment of the risks specific to the CGUs regarding the time value of money and the individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Group and its CGUs and is derived from its weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the Group\u2019s investors. The cost of debt is based on the interest-bearing borrowings the Group is obliged to service. CGU-specific risk is incorporated by applying individual beta factors. The beta factors are evaluated annually based on publicly available market data. Adjustments to the discount rate are made to factor in the specific amount and timing of the future tax flows in order to reflect a pre-tax discount rate.
\nRevenue growth \u2013 The growth rates are based on historical experience of membership developments taking into account 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.
\nThe budget used for the 2023 impairment testing assumes a compound annual growth rate of revenues over the forecast budget period 2024-2028 of 4.3% for the Netherlands, 4.9% for Belgium, 1.1% for Luxembourg, 5.6% for France, 10.4% for Spain and 26.5% for Germany. After the forecast period, revenues are expected to increase by 2.0% annually, which is the lowest of the current risk free rate and the long term inflation forecast.
\nThe budget used for the 2022 impairment testing (which was based on FVLCD calculations that included both existing clubs and new club openings) assumed a compound annual growth rate of revenues over the forecast budget period 2023-2027 of 9% for the Netherlands, 11% for Belgium, 4% for Luxembourg, 18% for France, 40% for Spain and 159% for Germany. Cash flows beyond the five-year period were extrapolated using a terminal growth rate of 2.0% for all CGUs, which was the lowest of the risk free rate and the long term inflation forecast at the end of December 2022.
\nEBITDA 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 an increase in revenues per member and maturation of immature clubs.
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.
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.
Costs incurred to configure or customise a 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 used their 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.
\nSpecifically, when 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.
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.
\nThe 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. These factors include 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.
\nAfter 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).
\nThe 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).
\nBasic-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
Significant judgement is required in determining the expected credit loss allowance. For this purpose, any change in the risk profile of members following the ongoing economic uncertainty prevailing since 2022 should be considered.
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.
\nIn 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.
\nThe key assumptions related to the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of resulting in 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.
\nThe table below presents the areas that involve a higher degree of judgement or areas where assumptions and estimates are significant to the financial statements:
\n| \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 | 6.5 |
Detailed explanations of the degree of judgment and assumptions used are included under each of the respective sections in the notes to the financial statements as referenced above.
Significant revenue recognition estimates relate to the identification of performance obligations and the revenue allocation as a result of the performance obligations identified.
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.
The recoverable amount as at 31 December 2023 was determined based on value-in-use calculations, using the most recent cash flow projections based on financial budgets approved by management, covering a five-year period. These budgets are prepared separately for each of the Group\u2019s CGUs to which the individual assets are allocated. The cash flow projections only include existing clubs and do not take into account any new club openings.
\nThe recoverable amount as at 31 December 2022 was determined based on fair value less cost of disposal (FVLCD) 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 included both existing clubs and new club openings.
\nFor both years, discount rates used are post-tax and reflect current market assessments of the time value of money and the risks specific to the asset. Management considered the effects of applying a pre-tax approach and concluded that this will not materially change the outcome of the impairment test.
\nThe pre- and post-tax discount rates applied to the cash flow projections are shown in the tables below.
\nPost-tax WACC discount rate
\n| \u00a0 | Netherlands | Belgium | Luxembourg | France | Spain | Germany |
|---|---|---|---|---|---|---|
| 20231 | 8.5% | 9.1% | 8.5% | 9.0% | 10.1% | 8.4% |
| 20222 | 10.2% | 10.9% | 10.2% | 10.8% | 12.1% | 10.2% |
Pre-tax WACC discount rate
\n| \u00a0 | Netherlands | Belgium | Luxembourg | France | Spain | Germany |
|---|---|---|---|---|---|---|
| 20231 | 10.6% | 11.4% | 10.7% | 10.8% | 12.2% | 10.4% |
| 20222 | 12.7% | 13.7% | 13.0% | 13.0% | 15.1% | 12.2% |
Climate related risks have been taken into account when determining the values of the key assumptions, but had no material impact on the measurement of the recoverable amount.
\nThe value-in-use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years.
\nThe calculations of value in use for the CGUs are most sensitive to the following assumptions:
\n\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 management\u2019s expectations of market development, and industry expectations.
\nDiscount rates \u2013 Discount rates represents management\u2019s market assessment of the risks specific to the CGUs regarding the time value of money and the individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Group and its CGUs and is derived from its weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the Group\u2019s investors. The cost of debt is based on the interest-bearing borrowings the Group is obliged to service. CGU-specific risk is incorporated by applying individual beta factors. The beta factors are evaluated annually based on publicly available market data. Adjustments to the discount rate are made to factor in the specific amount and timing of the future tax flows in order to reflect a pre-tax discount rate.
\nRevenue growth \u2013 The growth rates are based on historical experience of membership developments taking into account 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.
\nThe budget used for the 2023 impairment testing assumes a compound annual growth rate of revenues over the forecast budget period 2024-2028 of 4.3% for the Netherlands, 4.9% for Belgium, 1.1% for Luxembourg, 5.6% for France, 10.4% for Spain and 26.5% for Germany. After the forecast period, revenues are expected to increase by 2.0% annually, which is the lowest of the current risk free rate and the long term inflation forecast.
\nThe budget used for the 2022 impairment testing (which was based on FVLCD calculations that included both existing clubs and new club openings) assumed a compound annual growth rate of revenues over the forecast budget period 2023-2027 of 9% for the Netherlands, 11% for Belgium, 4% for Luxembourg, 18% for France, 40% for Spain and 159% for Germany. Cash flows beyond the five-year period were extrapolated using a terminal growth rate of 2.0% for all CGUs, which was the lowest of the risk free rate and the long term inflation forecast at the end of December 2022.
\nEBITDA 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 an increase in revenues per member and maturation of immature clubs.
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.
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.
Costs incurred to configure or customise a 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 used their 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.
\nSpecifically, when 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.
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.
\nThe 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. These factors include 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.
\nAfter 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).
\nThe 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).
\nBasic-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
Significant judgement is required in determining the expected credit loss allowance. For this purpose, any change in the risk profile of members following the ongoing economic uncertainty prevailing since 2022 should be considered.
Based on the available liquidity on the date of publication of these financial statements, the Management Board expects to 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. In making such an assessment, management has considered the current environment in which the Group operates and the expectations regarding the company's future performance.
The general accounting policies applied to the consolidated financial statements as a whole are described below, while other material 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.
\nBasis 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.
\nA 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.
\nDeferred tax assets and liabilities are classified as non-current assets and liabilities.
\nForeign 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 before income tax 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 paid (if applicable) are classified as financing cash flows. Dividends received are classified as investing cash flows.
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.
\nOther club revenues also include revenues related to the sale of day passes and revenues related to the sale of nutritional products and drinks in the clubs by third parties. 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. Revenue from the sales of services 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).
\nMembership 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), the waiving of the joining fee (fully or partially), the granting of a promotional item or discount voucher for the online store, or a combination of these. A 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.
\nIn 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 1freeze 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.
\nBasic-Fit sells 'Basic', 'Comfort', 'Premium' and 'All-In' contracts. Furthermore, as an add-on, members can choose for sports water subscription, a discounted personal trainer introduction session, a 12-week online certified personal coach subscription, or a flex option that gives members the option to cancel their membership within the first contract year.
\nWith a 'Basic' contract, members can workout in one specific club. This contract is only available for a selection of clubs. Live group lessons and use of the Basic-Fit app are included in the membership fee. With a 'Comfort' contract, in addition to the privileges of a 'Basic' contract, member can workout in all clubs in the relevant country instead of just in one specific club. With a 'Premium' contract, in addition to the privileges of a 'Comfort' contract, members can always bring someone and train together. Furthermore, with a 'Premium' contract, members can use massage chairs in the clubs for free, get a 50% discount on the sports water add-on, and they receive a \u20ac20 NXT Level voucher when they join. The 'All-In' contract is a combination of a 'Premium' one-year membership and the one-year rental of a bike and free access to the special Basic-Fit Home App with more than three hundred bike workouts.
\nMembers have the option2 to upgrade or downgrade their contract. 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. 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 third party operated vending machines, as well as via its online store. Sales of these products are recognised when the products are sold to the customer.
Cost of consumables used is accounted for in the year incurred.
Salaries, wages and social security contributions are charged to the statement of profit or loss based on the terms of employment, where they are due to employees and the tax authorities respectively.
\nThe 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 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.
\nThe 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.
\nIf 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.
\nService 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.
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.
Operating income that cannot be allocated to revenues as described in note 3.2 Revenue is recognised as other operating income.
\nGovernment 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.
\nGovernment 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.
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 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.
\nCurrent 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.
\nCurrent 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 recognised 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.
\nDeferred 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.
\nDeferred 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.
\nThe 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.
\nDeferred 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.
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.
\nGoodwill 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. 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. 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 CGU 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.
\nImpairments to goodwill are not subsequently reversed.
\nReference is also made to note 4.5 Business combinations.
Customer relationships acquired in a business combination are recognised at fair value at the acquisition date. Separately acquired customer relationships are recognised at historical cost. The brand name is recognised at fair value. Customer relationships and the brand name have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses. The brand name is amortised on a straight-line basis over the 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.
\nCosts 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.
\nJudgement 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.
\nSoftware-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.
\nThe 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.
\nOther 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.
\nComputer software development costs recognised as assets are amortised over their estimated useful lives, which do not exceed five years.
\nGains 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.
\nOther 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.
\nNon-financial assets other than goodwill that have suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
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.
\nSubsequent 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.
\nThe 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.
\nGains 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.
\nFixed 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).
\nNon-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 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.
\nUnless 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. When 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.
\nThe 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 recognises 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. With respect to vehicle 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 in 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.
\nThe 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.
\nMost of the lease contracts for buildings include extension and termination options. These options are negotiated by management to provide flexibility in terms of 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).
\nExtension options are included in the lease term when the Group has such an economic incentive that exercising the option is reasonably certain. 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.
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.
\nAcquisition-related costs are expensed as incurred and included in administrative expenses.
\nThe 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.
\nWhen 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.
\nAny 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.
\nGoodwill 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.
\nAfter 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.
\nWhere 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.
Investments in associates are accounted for using the equity method. The aggregate of the Group\u2019s share in the profit or loss of an associate is shown on the face of the statement of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate.
\nAccording to the equity method, the investment in an associate is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group\u2019s share of net assets of the associate since the acquisition date. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is not tested for impairment separately. Thus, reversals of impairments may effectively include reversal of goodwill impairments. Impairments and reversals are presented within \u2018Share of profit of an associate\u2019 in the statement of profit or loss.
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.
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.
\nTrade 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.
\nReference 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.
In the statement of cash flows, cash and cash equivalents include cash on hand, deposits held at call with financial institutions and bank overdrafts (if any). In the statement of financial position, bank overdrafts are shown within borrowings in current liabilities.
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.
\nFor deferred revenues, reference is made to note 3.2 Revenue.
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'.
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.
\nDiluted 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.
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.
\nBorrowings 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.
\nThe 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.
\nReference 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.
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.
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.
\nPurchases 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.
\nSubsequent 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.
\nThe Group\u2019s financial assets at amortised cost include trade receivables.
\nFinancial 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.
\nThe Group\u2019s financial liabilities include trade and other payables, loans and borrowings, including bank overdrafts and derivative financial instruments.
\nSubsequent 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.
\nDerecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
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 and swaptions 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 2023 and 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.
\nFair 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.
\nThe 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.
\nA 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.
\nThe 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.
\nAll 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.
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.
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.
\nRestructuring 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).
\nProvisions 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.
\nThe 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.
\nProvisions 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.
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.
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.
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.
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 before income tax 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 paid (if applicable) are classified as financing cash flows. Dividends received are classified as investing cash flows.
Statement of cash flows
The statement of cash flows has been prepared using the indirect method, whereby profit or loss before income tax 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 paid (if applicable) are classified as financing cash flows. Dividends received are classified as investing cash flows.
| Fair value recognised on acquisition | 2023 | 2022 |
|---|---|---|
| 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 |
The Group\u2018s interest-bearing borrowings at 31 December 2023 and 31 December 2022, including the movements during 2023 and 2022, are summarised in the following tables:
\n| \u00a0 | \u00a0 | \u00a0 | Cash settled | \u00a0 | Other changes (non-cash) | \u00a0 | \u00a0 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | Balance as at 1 January 2023 | \u00a0 | New loans | Repayments | \u00a0 | Amortisation | Additions (lease liabilities) | COVID-19 rent credits | Accretion of interest | \u00a0 | Balance as at 31 December 2023 |
| Floating rate borrowings (non-current and current) | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | |
| Bank borrowings | 250,000 | \u00a0 | - | - | \u00a0 | - | - | - | - | \u00a0 | 250,000 |
| Drawn revolving credit facility | 210,000 | \u00a0 | 145,000 | - | \u00a0 | - | - | - | - | \u00a0 | 355,000 |
| GO-C facility | 13,333 | \u00a0 | - | (13,333) | \u00a0 | - | - | - | - | \u00a0 | - |
| Schuldschein | 10,000 | \u00a0 | - | - | \u00a0 | - | - | - | - | \u00a0 | 10,000 |
| Borrowing costs | (1,470) | \u00a0 | (3,505) | - | \u00a0 | 781 | - | - | - | \u00a0 | (4,194) |
| \u00a0 | 481,863 | \u00a0 | 141,495 | (13,333) | \u00a0 | 781 | - | - | - | \u00a0 | 610,806 |
| \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 | |
| Convertible bonds \u2013 liability component | 247,248 | \u00a0 | - | - | \u00a0 | - | - | - | 9,149 | \u00a0 | 256,397 |
| Schuldschein | 8,000 | \u00a0 | - | - | \u00a0 | - | - | - | - | \u00a0 | 8,000 |
| Lease liabilities | 1,481,539 | \u00a0 | - | (228,203) | \u00a0 | - | 365,209 | (526) | 41,293 | \u00a0 | 1,659,312 |
| \u00a0 | 1,736,787 | \u00a0 | - | (228,203) | \u00a0 | - | 365,209 | (526) | 50,442 | \u00a0 | 1,923,709 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | 2,218,650 | \u00a0 | 141,495 | (241,536) | \u00a0 | 781 | 365,209 | (526) | 50,442 | \u00a0 | 2,534,515 |
| \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 |
| Non-current lease liabilities | 1,265,086 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,405,291 |
| Non-current borrowings | 723,778 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 857,203 |
| Current lease liabilities | 216,453 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 254,021 |
| Current borrowings | 13,333 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 18,000 |
| \u00a0 | \u00a0 | \u00a0 | Cash settled | \u00a0 | Other changes (non-cash) | \u00a0 | \u00a0 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | Balance as at 1 January 2022 | \u00a0 | New loans | Repayments | \u00a0 | Amortisation | Additions (lease liabilities) | COVID-19 rent credits | Accretion of interest | \u00a0 | Balance as at 31 December 2022 |
| Floating rate borrowings (non-current) | \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 | \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 |
| Fixed rate borrowings and lease liabilities (non-current and current) | \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 | 1,923,115 | \u00a0 | 210,000 | (302,335) | \u00a0 | 715 | 348,330 | (2,415) | 41,240 | \u00a0 | 2,218,650 |
| Of which: | \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 | 1,265,086 |
| Non-current borrowings | 517,729 | \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 | 216,453 |
| Current borrowings | 100,227 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 13,333 |
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.
The movements in 2023 and 2022 arising from cash flows and non-cash changes in the Group\u2018s derivative financial instruments are summarised in the following table:
\n| \u00a0 | \u00a0 | Cash flows | \u00a0 | Non-cash changes | \u00a0 |
|---|---|---|---|---|---|
| \u00a0 | Balance as at 1 January1 | Repayments | \u00a0 | Fair value changes through P&L2 | Balance as at 31 December3 |
| 2023 | 2,045 | - | \u00a0 | (6,531) | (4,486) |
| 2022 | (1,660) | - | \u00a0 | 3,705 | 2,045 |
The Group applied for the first time certain standards and amendments that are effective for annual periods beginning on or after 1 January 2023.
The amendments to IAS 12 Income Tax narrow the scope of the initial recognition exception, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases and decommissioning liabilities.
\nThe Group previously accounted for deferred tax on leases and decommissioning liabilities (if any) by applying the 'integrally linked' approach, resulting in similar outcome as under the amendments, except that the deferred tax asset or liability was recognised on a net basis. Following the amendments, the Group has recognised a separate deferred tax asset in relation to its lease liabilities and a deferred tax liability in relation to its right-of-use assets. However, there was no impact on the statement of financial position because the balances qualify for offset under paragraph 74 of IAS 12. There was also no impact on the opening balance of retained earnings at 1 January 2022 as a result of the change. The key impact for the Group relates to the disclosure of the deferred tax assets and liabilities recognised (see note 3.9 Income tax and deferred income tax).
The amendments to IAS 12 were introduced in response to the OECD\u2019s BEPS Pillar Two rules and include:
A mandatory temporary exception to the recognition and disclosure of deferred taxes arising from the jurisdictional implementation of the Pillar Two model rules; and
Disclosure requirements for affected entities to help users of the financial statements better understand an entity\u2019s exposure to Pillar Two income taxes arising from that legislation, particularly before its effective date.
The Group adopted the amendments upon their release on 23 May 2023. The disclosures about the Pillar Two exposure are included in note 3.9 Income tax and deferred income tax.
\nThe mandatory temporary exception \u2013 the use of which is required to be disclosed \u2013 applies immediately.
The amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements provide guidance and examples to help entities apply materiality judgements to accounting policy disclosures.
\nThe amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their \u2018significant\u2019 accounting policies with a requirement to disclose their \u2018material\u2019 accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.
\nThe amendments have had no impact on the Group\u2019s disclosures of accounting policies nor on the measurement, recognition or presentation of any items in the Group\u2019s financial statements.
The amendments to IAS 8 introduce a new definition for accounting estimates, clarifying that they are monetary amounts in the financial statements that are subject to measurement uncertainty. Furthermore, the amendments clarify the relationship between accounting policies and accounting estimates by specifying that a company develops an accounting estimate to achieve the objective set out by an accounting policy. The new definition for accounting estimates, as well as the clarification of the relationship between accounting policies and accounting estimates did not result in a change in the measurement, recognition or presentation of any items in the Group\u2019s financial statements. As a result, the amendments did not have an impact on the financial statements of the Group.
Certain new accounting standards and interpretations have been issued but are not yet effective for the year ended 31 December 2023. These standards and interpretations are not expected to have a material impact on the Group in the current or future reporting periods, or on foreseeable future transactions.
Due to amendments to IAS 12 (Deferred Tax related to Assets and Liabilities arising from a Single Transaction as disclosed in note 2.5 Changes in accounting policies and disclosures), the netting amount at 31 December 2022 has been restated from \u20ac34.7 million to \u20ac381.9 million. This had no impact of the netted amount of deferred tax assets.
\nPillar Two legislation has been enacted or substantively enacted in all jurisdictions in which the Group operates. The legislation will be effective for the Group\u2019s financial year beginning 1 January 2024. The Group has performed an assessment of the Group\u2019s potential exposure to Pillar Two income taxes.
\nThis assessment is based on the most recent information available regarding the financial performance of the constituent entities in the Group. Based on the assessment performed, the Pillar Two effective tax rates in all jurisdictions in which the Group operates are above 15% and management is not currently aware of any circumstances under which this might change. Therefore, the Group does not expect a potential exposure to Pillar Two top-up taxes.
The Group applied for the first time certain standards and amendments that are effective for annual periods beginning on or after 1 January 2023.
The amendments to IAS 12 Income Tax narrow the scope of the initial recognition exception, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases and decommissioning liabilities.
\nThe Group previously accounted for deferred tax on leases and decommissioning liabilities (if any) by applying the 'integrally linked' approach, resulting in similar outcome as under the amendments, except that the deferred tax asset or liability was recognised on a net basis. Following the amendments, the Group has recognised a separate deferred tax asset in relation to its lease liabilities and a deferred tax liability in relation to its right-of-use assets. However, there was no impact on the statement of financial position because the balances qualify for offset under paragraph 74 of IAS 12. There was also no impact on the opening balance of retained earnings at 1 January 2022 as a result of the change. The key impact for the Group relates to the disclosure of the deferred tax assets and liabilities recognised (see note 3.9 Income tax and deferred income tax).
The amendments to IAS 12 were introduced in response to the OECD\u2019s BEPS Pillar Two rules and include:
A mandatory temporary exception to the recognition and disclosure of deferred taxes arising from the jurisdictional implementation of the Pillar Two model rules; and
Disclosure requirements for affected entities to help users of the financial statements better understand an entity\u2019s exposure to Pillar Two income taxes arising from that legislation, particularly before its effective date.
The Group adopted the amendments upon their release on 23 May 2023. The disclosures about the Pillar Two exposure are included in note 3.9 Income tax and deferred income tax.
\nThe mandatory temporary exception \u2013 the use of which is required to be disclosed \u2013 applies immediately.
The amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements provide guidance and examples to help entities apply materiality judgements to accounting policy disclosures.
\nThe amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their \u2018significant\u2019 accounting policies with a requirement to disclose their \u2018material\u2019 accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.
\nThe amendments have had no impact on the Group\u2019s disclosures of accounting policies nor on the measurement, recognition or presentation of any items in the Group\u2019s financial statements.
The amendments to IAS 8 introduce a new definition for accounting estimates, clarifying that they are monetary amounts in the financial statements that are subject to measurement uncertainty. Furthermore, the amendments clarify the relationship between accounting policies and accounting estimates by specifying that a company develops an accounting estimate to achieve the objective set out by an accounting policy. The new definition for accounting estimates, as well as the clarification of the relationship between accounting policies and accounting estimates did not result in a change in the measurement, recognition or presentation of any items in the Group\u2019s financial statements. As a result, the amendments did not have an impact on the financial statements of the Group.
Certain new accounting standards and interpretations have been issued but are not yet effective for the year ended 31 December 2023. These standards and interpretations are not expected to have a material impact on the Group in the current or future reporting periods, or on foreseeable future transactions.
Due to amendments to IAS 12 (Deferred Tax related to Assets and Liabilities arising from a Single Transaction as disclosed in note 2.5 Changes in accounting policies and disclosures), the netting amount at 31 December 2022 has been restated from \u20ac34.7 million to \u20ac381.9 million. This had no impact of the netted amount of deferred tax assets.
\nPillar Two legislation has been enacted or substantively enacted in all jurisdictions in which the Group operates. The legislation will be effective for the Group\u2019s financial year beginning 1 January 2024. The Group has performed an assessment of the Group\u2019s potential exposure to Pillar Two income taxes.
\nThis assessment is based on the most recent information available regarding the financial performance of the constituent entities in the Group. Based on the assessment performed, the Pillar Two effective tax rates in all jurisdictions in which the Group operates are above 15% and management is not currently aware of any circumstances under which this might change. Therefore, the Group does not expect a potential exposure to Pillar Two top-up taxes.
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, firstly from a group perspective and secondly from a geographical perspective. Basic-Fit has identified five operating segments: the Netherlands, 'Belux' (Belgium and Luxembourg)1, France, Spain and Germany.
\nThe Basic-Fit CODM primarily uses underlying EBITDA less rent as the segment performance measure to monitor operating segment results and performance. The underlying EBITDA less rent is mainly impacted by the VAT rate applicable to fitness in the country, and the mature/immature club distribution in the country. The gross membership fees in all countries are the same, so the revenue recognised is determined by the VAT rate. Mature clubs are more stable in terms of revenue, number of memberships and profitability.
\nThe Benelux countries (operating segment the Netherlands and operating segment 'Belux') generated similar profit margins (underlying EBITDA less rent as a percentage of revenue) the pre- and post-COVID-19 period (2020 to 2022) and this is also expected for future performance. These countries have a lower VAT rate applicable to fitness and a higher percentage of mature clubs. However, the profit margins in the Benelux differ from those in operating segments 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. France and Spain generated similar profit margins in the pre- and post-COVID-19 period (2020 to 2022) and this is also expected for future performance. These countries have a higher VAT rate applicable to fitness and a lower percentage of mature clubs. Germany is a new operating segment, entered in 2022, and is still in the early stages of development and will be comparable to France and Spain, as a higher VAT rate is applicable to fitness and fast growth in clubs and profit margins is expected in the coming years.
\nThe 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.
\nGiven the similar economic characteristics (long-term financial performance) and ignoring the impact of temporary club closures on profit margins in the period 2020 to 2022 due to COVID-19, 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 the Netherlands and 'Belux' 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.
\nTotal revenues and underlying EBITDA less rent per reporting segment are as follows:
\n| For the year ended 31 December 2023 | Benelux | France, Spain & Germany | Total |
|---|---|---|---|
| Revenue | 479,038 | 568,209 | 1,047,247 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Underlying EBITDA less rent (segments) | 220,931 | 97,148 | 318,079 |
| Other reconciling items1 | \u00a0 | \u00a0 | (57,562) |
| Total underlying EBITDA less rent | \u00a0 | \u00a0 | 260,517 |
| Reconciliation of underlying EBITDA less rent to profit/(loss) before tax: | \u00a0 | ||
| Underlying EBITDA less rent | \u00a0 | \u00a0 | 260,517 |
| Depreciation, amortisation and impairment charges | \u00a0 | \u00a0 | (390,938) |
| Finance costs \u2013 net | \u00a0 | \u00a0 | (92,426) |
| Rent costs clubs and overhead, including car leases | \u00a0 | \u00a0 | 227,518 |
| COVID-19 rent credits | \u00a0 | \u00a0 | 526 |
| Exceptional items | \u00a0 | \u00a0 | (6,913) |
| Profit/(loss) before tax | \u00a0 | \u00a0 | (1,716) |
Exceptional items in 2023 include start-up costs for new countries, costs related to club closures and other costs or profits that are of a one-off nature or do not reflect the normal operations of the business.
\n| For the year ended 31 December 2022 | Benelux | France, Spain & Germany | Total |
|---|---|---|---|
| Revenue | 364,489 | 430,082 | 794,571 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Underlying EBITDA less rent (segments) | 151,688 | 95,697 | 247,385 |
| Other reconciling items | \u00a0 | \u00a0 | (43,605) |
| Total underlying EBITDA less rent | \u00a0 | \u00a0 | 203,780 |
| Reconciliation of underlying EBITDA less rent to profit/(loss) before tax: | \u00a0 | ||
| Underlying EBITDA less rent | \u00a0 | \u00a0 | 203,780 |
| Depreciation, amortisation and impairment charges | \u00a0 | \u00a0 | (331,389) |
| Finance costs \u2013 net | \u00a0 | \u00a0 | (58,633) |
| Rent costs clubs and overhead, including car leases | \u00a0 | \u00a0 | 191,227 |
| COVID-19 rent credits | \u00a0 | \u00a0 | 2,415 |
| Exceptional items: | \u00a0 | \u00a0 | \u00a0 |
| - COVID-19 related costs | \u00a0 | \u00a0 | (6,023) |
| - Other exceptional costs and income | \u00a0 | \u00a0 | (4,518) |
| Profit/(loss) before tax | \u00a0 | \u00a0 | (3,141) |
COVID-19 related exceptional costs in 2022 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 in 2022 include start-up costs for the segment Germany, costs related to club closures and other costs or profits that are one-off or do not reflect the normal operations of the business.
\nThe 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.
\nA breakdown of the non-current assets is as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| The Netherlands (country of domicile) | 643,529 | 620,619 |
| Belgium | 438,152 | 426,417 |
| Luxembourg | 36,286 | 37,746 |
| France | 1,456,947 | 1,300,976 |
| Spain | 328,505 | 218,304 |
| Germany | 61,434 | 15,276 |
| Total | 2,964,853 | 2,619,338 |
For this purpose, non-current assets consist of property, plant and equipment, right-of-use assets, goodwill and other intangible assets. The additions to non-current assets (the Benelux segment \u20ac91 million (2022: \u20ac145 million), the France, Spain & Germany segment \u20ac506 million (2022: \u20ac403 million) are mainly directly related to the investments in new club openings in 2023 (and 2022 respectively).
In the following table, revenue is disaggregated by revenue type, by country and based on the timing of revenue recognition:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Type of goods or service | \u00a0 | \u00a0 |
| Fitness membership revenue | 1,009,948 | 764,398 |
| Other club revenue | 29,529 | 24,264 |
| Other non-club revenue | 7,770 | 5,909 |
| Total | 1,047,247 | 794,571 |
| \u00a0 | \u00a0 | \u00a0 |
| Geographical markets | \u00a0 | \u00a0 |
| The Netherlands | 250,141 | 191,012 |
| Belgium | 212,725 | 160,838 |
| Luxembourg | 16,172 | 12,639 |
| France | 507,560 | 394,533 |
| Spain | 59,559 | 34,912 |
| Germany | 1,090 | 637 |
| Total | 1,047,247 | 794,571 |
| \u00a0 | \u00a0 | \u00a0 |
| Timing of revenue recognition | \u00a0 | \u00a0 |
| Products and services recognised over time | 967,361 | 722,448 |
| Products recognised at a point in time | 79,886 | 72,123 |
| Total | 1,047,247 | 794,571 |
In the following table, revenue is disaggregated by revenue type, by country and based on the timing of revenue recognition:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Type of goods or service | \u00a0 | \u00a0 |
| Fitness membership revenue | 1,009,948 | 764,398 |
| Other club revenue | 29,529 | 24,264 |
| Other non-club revenue | 7,770 | 5,909 |
| Total | 1,047,247 | 794,571 |
| \u00a0 | \u00a0 | \u00a0 |
| Geographical markets | \u00a0 | \u00a0 |
| The Netherlands | 250,141 | 191,012 |
| Belgium | 212,725 | 160,838 |
| Luxembourg | 16,172 | 12,639 |
| France | 507,560 | 394,533 |
| Spain | 59,559 | 34,912 |
| Germany | 1,090 | 637 |
| Total | 1,047,247 | 794,571 |
| \u00a0 | \u00a0 | \u00a0 |
| Timing of revenue recognition | \u00a0 | \u00a0 |
| Products and services recognised over time | 967,361 | 722,448 |
| Products recognised at a point in time | 79,886 | 72,123 |
| Total | 1,047,247 | 794,571 |
The increase in revenues is directly related to the opening of new clubs (Basic-Fit added 202 clubs to its network), more members per club and on average more revenue per member.
\nOther 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 the increase in clubs and members in 2023 as well as an increase in promotional revenue.
\nOther non-club revenue relates to revenue from sales via the online store.
Basic-Fit receives considerations before revenues are recognised (e.g. membership fees collected 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.
\nThe following table provides information about receivables and deferred revenues from contracts with customers:
\n| \u00a0 | 31 December 2023 | 31 December 2022 | 1 January 2022 |
|---|---|---|---|
| Receivables, included in 'Trade and other receivables' | 41,349 | 35,646 | 9,417 |
| Deferred revenues, included in 'Trade and other payables' | 29,888 | 17,435 | 18,688 |
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 in which the revenues recognised exceed the received considerations. The increase in receivables is the result of the strong increase in members in 2022 and 2023, resulting in more member receivables (unpaid membership fees).
\nThe deferred revenues, included in 'Trade and other payables', relate to the advance considerations received from customers, for which revenue is recognised over time in situations that the received considerations exceed the revenues recognised. The increase in 2023 is related to the increase in memberships, as well as the timing and composition of direct debits and promotions for new members close to the end of the year. As a result, on 31 December 2023 the difference between received considerations and revenues recognised increased compared to the situation on 31 December 2022.
\nAll 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.
\nOther club revenues also include revenues related to the sale of day passes and revenues related to the sale of nutritional products and drinks in the clubs by third parties. 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. Revenue from the sales of services 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).
\nMembership 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), the waiving of the joining fee (fully or partially), the granting of a promotional item or discount voucher for the online store, or a combination of these. A 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.
\nIn 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 1freeze 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.
\nBasic-Fit sells 'Basic', 'Comfort', 'Premium' and 'All-In' contracts. Furthermore, as an add-on, members can choose for sports water subscription, a discounted personal trainer introduction session, a 12-week online certified personal coach subscription, or a flex option that gives members the option to cancel their membership within the first contract year.
\nWith a 'Basic' contract, members can workout in one specific club. This contract is only available for a selection of clubs. Live group lessons and use of the Basic-Fit app are included in the membership fee. With a 'Comfort' contract, in addition to the privileges of a 'Basic' contract, member can workout in all clubs in the relevant country instead of just in one specific club. With a 'Premium' contract, in addition to the privileges of a 'Comfort' contract, members can always bring someone and train together. Furthermore, with a 'Premium' contract, members can use massage chairs in the clubs for free, get a 50% discount on the sports water add-on, and they receive a \u20ac20 NXT Level voucher when they join. The 'All-In' contract is a combination of a 'Premium' one-year membership and the one-year rental of a bike and free access to the special Basic-Fit Home App with more than three hundred bike workouts.
\nMembers have the option2 to upgrade or downgrade their contract. 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. 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 third party operated 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.
In the following table, revenue is disaggregated by revenue type, by country and based on the timing of revenue recognition:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Type of goods or service | \u00a0 | \u00a0 |
| Fitness membership revenue | 1,009,948 | 764,398 |
| Other club revenue | 29,529 | 24,264 |
| Other non-club revenue | 7,770 | 5,909 |
| Total | 1,047,247 | 794,571 |
| \u00a0 | \u00a0 | \u00a0 |
| Geographical markets | \u00a0 | \u00a0 |
| The Netherlands | 250,141 | 191,012 |
| Belgium | 212,725 | 160,838 |
| Luxembourg | 16,172 | 12,639 |
| France | 507,560 | 394,533 |
| Spain | 59,559 | 34,912 |
| Germany | 1,090 | 637 |
| Total | 1,047,247 | 794,571 |
| \u00a0 | \u00a0 | \u00a0 |
| Timing of revenue recognition | \u00a0 | \u00a0 |
| Products and services recognised over time | 967,361 | 722,448 |
| Products recognised at a point in time | 79,886 | 72,123 |
| Total | 1,047,247 | 794,571 |
The increase in revenues is directly related to the opening of new clubs (Basic-Fit added 202 clubs to its network), more members per club and on average more revenue per member.
\nOther 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 the increase in clubs and members in 2023 as well as an increase in promotional revenue.
\nOther non-club revenue relates to revenue from sales via the online store.
Basic-Fit receives considerations before revenues are recognised (e.g. membership fees collected 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.
\nThe following table provides information about receivables and deferred revenues from contracts with customers:
\n| \u00a0 | 31 December 2023 | 31 December 2022 | 1 January 2022 |
|---|---|---|---|
| Receivables, included in 'Trade and other receivables' | 41,349 | 35,646 | 9,417 |
| Deferred revenues, included in 'Trade and other payables' | 29,888 | 17,435 | 18,688 |
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 in which the revenues recognised exceed the received considerations. The increase in receivables is the result of the strong increase in members in 2022 and 2023, resulting in more member receivables (unpaid membership fees).
\nThe deferred revenues, included in 'Trade and other payables', relate to the advance considerations received from customers, for which revenue is recognised over time in situations that the received considerations exceed the revenues recognised. The increase in 2023 is related to the increase in memberships, as well as the timing and composition of direct debits and promotions for new members close to the end of the year. As a result, on 31 December 2023 the difference between received considerations and revenues recognised increased compared to the situation on 31 December 2022.
\nAll 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.
\nOther club revenues also include revenues related to the sale of day passes and revenues related to the sale of nutritional products and drinks in the clubs by third parties. 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. Revenue from the sales of services 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).
\nMembership 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), the waiving of the joining fee (fully or partially), the granting of a promotional item or discount voucher for the online store, or a combination of these. A 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.
\nIn 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 1freeze 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.
\nBasic-Fit sells 'Basic', 'Comfort', 'Premium' and 'All-In' contracts. Furthermore, as an add-on, members can choose for sports water subscription, a discounted personal trainer introduction session, a 12-week online certified personal coach subscription, or a flex option that gives members the option to cancel their membership within the first contract year.
\nWith a 'Basic' contract, members can workout in one specific club. This contract is only available for a selection of clubs. Live group lessons and use of the Basic-Fit app are included in the membership fee. With a 'Comfort' contract, in addition to the privileges of a 'Basic' contract, member can workout in all clubs in the relevant country instead of just in one specific club. With a 'Premium' contract, in addition to the privileges of a 'Comfort' contract, members can always bring someone and train together. Furthermore, with a 'Premium' contract, members can use massage chairs in the clubs for free, get a 50% discount on the sports water add-on, and they receive a \u20ac20 NXT Level voucher when they join. The 'All-In' contract is a combination of a 'Premium' one-year membership and the one-year rental of a bike and free access to the special Basic-Fit Home App with more than three hundred bike workouts.
\nMembers have the option2 to upgrade or downgrade their contract. 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. 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 third party operated 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.
Basic-Fit receives considerations before revenues are recognised (e.g. membership fees collected 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.
\nThe following table provides information about receivables and deferred revenues from contracts with customers:
\n| \u00a0 | 31 December 2023 | 31 December 2022 | 1 January 2022 |
|---|---|---|---|
| Receivables, included in 'Trade and other receivables' | 41,349 | 35,646 | 9,417 |
| Deferred revenues, included in 'Trade and other payables' | 29,888 | 17,435 | 18,688 |
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 in which the revenues recognised exceed the received considerations. The increase in receivables is the result of the strong increase in members in 2022 and 2023, resulting in more member receivables (unpaid membership fees).
\nThe deferred revenues, included in 'Trade and other payables', relate to the advance considerations received from customers, for which revenue is recognised over time in situations that the received considerations exceed the revenues recognised. The increase in 2023 is related to the increase in memberships, as well as the timing and composition of direct debits and promotions for new members close to the end of the year. As a result, on 31 December 2023 the difference between received considerations and revenues recognised increased compared to the situation on 31 December 2022.
\nAll remaining performance obligations are expected to be recognised within one year.
Basic-Fit receives considerations before revenues are recognised (e.g. membership fees collected 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.
\nThe following table provides information about receivables and deferred revenues from contracts with customers:
\n| \u00a0 | 31 December 2023 | 31 December 2022 | 1 January 2022 |
|---|---|---|---|
| Receivables, included in 'Trade and other receivables' | 41,349 | 35,646 | 9,417 |
| Deferred revenues, included in 'Trade and other payables' | 29,888 | 17,435 | 18,688 |
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 in which the revenues recognised exceed the received considerations. The increase in receivables is the result of the strong increase in members in 2022 and 2023, resulting in more member receivables (unpaid membership fees).
\nThe deferred revenues, included in 'Trade and other payables', relate to the advance considerations received from customers, for which revenue is recognised over time in situations that the received considerations exceed the revenues recognised. The increase in 2023 is related to the increase in memberships, as well as the timing and composition of direct debits and promotions for new members close to the end of the year. As a result, on 31 December 2023 the difference between received considerations and revenues recognised increased compared to the situation on 31 December 2022.
\nAll remaining performance obligations are expected to be recognised within one year.
The composition of trade and other payables was as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Trade payables | 120,488 | 149,167 |
| Deferred revenues | 29,888 | 17,435 |
| Holiday allowance and vacation days accrual | 12,814 | 11,274 |
| VAT payable | 2,182 | 3,303 |
| Payroll tax payable | 6,574 | 7,012 |
| Interest payable | 4,696 | 1,705 |
| Accruals related to capital expenditure | 69,471 | 10,894 |
| Housing cost payable | 25,224 | 12,608 |
| Other liabilities and accrued expenses | 16,844 | 9,418 |
| Total | 288,181 | 222,816 |
All current liabilities fall due in less than one year. The fair value of the current liabilities approximates the carrying amount due to their short-term nature.
\nThe increase in deferred revenues is disclosed in more detail in note 3.2 Revenue.
\nAccruals related to capital expenditure are related to investments in opened or to be opened clubs, to the extend that no invoice is received while construction work has already been completed. The increase of these accruals is a result of the high number of clubs that were opened in January 2024, for which all or most construction work was already completed at 31 December 2023, while no invoice was received.
\nThe increase in other lines in the table above are mostly directly related to the growth in members and clubs and for housing costs payable also due to increased energy and gas prices compared to one year ago.
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.
\nFor deferred revenues, reference is made to note 3.2 Revenue.
Basic-Fit receives considerations before revenues are recognised (e.g. membership fees collected 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.
\nThe following table provides information about receivables and deferred revenues from contracts with customers:
\n| \u00a0 | 31 December 2023 | 31 December 2022 | 1 January 2022 |
|---|---|---|---|
| Receivables, included in 'Trade and other receivables' | 41,349 | 35,646 | 9,417 |
| Deferred revenues, included in 'Trade and other payables' | 29,888 | 17,435 | 18,688 |
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 in which the revenues recognised exceed the received considerations. The increase in receivables is the result of the strong increase in members in 2022 and 2023, resulting in more member receivables (unpaid membership fees).
\nThe deferred revenues, included in 'Trade and other payables', relate to the advance considerations received from customers, for which revenue is recognised over time in situations that the received considerations exceed the revenues recognised. The increase in 2023 is related to the increase in memberships, as well as the timing and composition of direct debits and promotions for new members close to the end of the year. As a result, on 31 December 2023 the difference between received considerations and revenues recognised increased compared to the situation on 31 December 2022.
\nAll remaining performance obligations are expected to be recognised within one year.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Member and trade receivables | 68,044 | 54,082 |
| Less: allowance for expected credit losses | (26,695) | (18,436) |
| Receivables \u2013 net | 41,349 | 35,646 |
| Security deposits | 10,064 | 8,912 |
| Loan receivable | - | 29 |
| Taxes and social charges (mainly VAT) | 7,689 | 17,709 |
| Prepayments | 4,692 | 5,236 |
| Other receivables and accrued income | 26,517 | 18,213 |
| Total receivables | 90,311 | 85,745 |
| Less: non-current portion of security deposits | 10,064 | 8,912 |
| Less: non-current loans receivable | - | 29 |
| Total non-current portion | 10,064 | 8,941 |
| Total current portion | 80,247 | 76,804 |
The decrease in taxes and social charges receivable is mainly related to VAT and is the result of the timing of invoices issued and received, and whether purchases are invoiced with or without VAT.
\nThe 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 economic uncertainty.
\nThe 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:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| As at 1 January | (18,436) | (18,594) |
| Provision for impairment recognised during the year | (36,324) | (14,647) |
| Receivables written off during the year as uncollectable | 28,065 | 14,805 |
| As at 31 December | (26,695) | (18,436) |
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.
\nThe 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.
\nTrade 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.
\nReference 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.
\nThe 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.
\nAs a result of the Group\u2019s prepayment policy, any account receivables balances are automatically past due.
\nAn ageing analysis of the Group\u2019s trade and other receivables that are past due (including provision for expected credit losses) is as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Overdue <30 days | 11,610 | 19,265 |
| Overdue 31-60 days | 3,513 | 2,470 |
| Overdue 61-90 days | 5,399 | 3,632 |
| Overdue >90 days | 20,827 | 10,279 |
| Balance incl. provision | 41,349 | 35,646 |
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 increase in economic uncertainty in 2022 and 2023, 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 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 2023, the provision stood at \u20ac26.7 million (2022: \u20ac18.4 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, BNP Paribas and Citibank. No collateral is held for the aforementioned liquid 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.
\nPurchases 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.
\nImpairment 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.
Significant judgement is required in determining the expected credit loss allowance. For this purpose, any change in the risk profile of members following the ongoing economic uncertainty prevailing since 2022 should be considered.
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.
\nOther club revenues also include revenues related to the sale of day passes and revenues related to the sale of nutritional products and drinks in the clubs by third parties. 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. Revenue from the sales of services 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).
\nMembership 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), the waiving of the joining fee (fully or partially), the granting of a promotional item or discount voucher for the online store, or a combination of these. A 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.
\nIn 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 1freeze 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.
\nBasic-Fit sells 'Basic', 'Comfort', 'Premium' and 'All-In' contracts. Furthermore, as an add-on, members can choose for sports water subscription, a discounted personal trainer introduction session, a 12-week online certified personal coach subscription, or a flex option that gives members the option to cancel their membership within the first contract year.
\nWith a 'Basic' contract, members can workout in one specific club. This contract is only available for a selection of clubs. Live group lessons and use of the Basic-Fit app are included in the membership fee. With a 'Comfort' contract, in addition to the privileges of a 'Basic' contract, member can workout in all clubs in the relevant country instead of just in one specific club. With a 'Premium' contract, in addition to the privileges of a 'Comfort' contract, members can always bring someone and train together. Furthermore, with a 'Premium' contract, members can use massage chairs in the clubs for free, get a 50% discount on the sports water add-on, and they receive a \u20ac20 NXT Level voucher when they join. The 'All-In' contract is a combination of a 'Premium' one-year membership and the one-year rental of a bike and free access to the special Basic-Fit Home App with more than three hundred bike workouts.
\nMembers have the option2 to upgrade or downgrade their contract. 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. 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 third party operated vending machines, as well as via its online store. Sales of these products are recognised when the products are sold to the customer.
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), the waiving of the joining fee (fully or partially), the granting of a promotional item or discount voucher for the online store, or a combination of these. A 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.
\nMembers have the option2 to upgrade or downgrade their contract. 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. 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.
This is not possible for members who have chosen the \u2018Flex\u2019 option. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscountsAndRebatesExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "ixv-354": { "value": "\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Cost of food and drink | (12,577) | (8,658) |
| Other cost of sales | (19,006) | (13,740) |
| Total | (31,583) | (22,398) |
'Other cost of sales' consists primarily of sports apparel and other goods that are sold to members and/or via the online store.\u00a0
\nThe 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 is accounted for in the year incurred.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Cost of food and drink | (12,577) | (8,658) |
| Other cost of sales | (19,006) | (13,740) |
| Total | (31,583) | (22,398) |
'Other cost of sales' consists primarily of sports apparel and other goods that are sold to members and/or via the online store.\u00a0
\nThe 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 is accounted for in the year incurred.
Employee benefits expense can be broken down as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Salaries and wages (including share-based payments)1 | (148,987) | (120,998) |
| Social security contributions | (29,428) | (24,527) |
| Pension costs \u2013 defined contribution plans | (2,652) | (2,254) |
| Total | (181,067) | (147,779) |
Salaries and wages include no government grants (2022: \u20ac29 thousand) and social security contributions include no government grants (2022: \u20ac774 thousand).
\nThe increase in employee benefits expense is directly related to the higher number of clubs.
\nIn the year under review, the average number of employees calculated on a full-time equivalent ('FTE') basis was 4,795 (2022: 4,145).
\n| Average number of FTEs during the year | 2023 | 2022 |
|---|---|---|
| Benelux | 1,968 | 1,867 |
| France, Spain & Germany | 2,827 | 2,278 |
| Total | 4,795 | 4,145 |
| \u00a0 | \u00a0 | \u00a0 |
| Club | 4,083 | 3,539 |
| Headquarters | 712 | 606 |
| Total | 4,795 | 4,145 |
Salaries, wages and social security contributions are charged to the statement of profit or loss based on the terms of employment, where they are due to employees and the tax authorities respectively.
\nThe 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 | 2023 | 2022 |
|---|---|---|
| Depreciation of property, plant and equipment | (178,988) | (151,134) |
| Depreciation of right-of-use assets | (200,977) | (171,566) |
| Amortisation of other intangible assets | (9,693) | (8,689) |
| Impairment of property, plant and equipment | (1,280) | - |
| Total | (390,938) | (331,389) |
The increase in depreciation charges is directly related to the higher number of clubs.
\nThe impairment loss in 2023 represented the write-down of fitness equipment as far as the carrying amount exceeded the recoverable amount. This is further disclosed in note 4.3 Property, plant and equipment.
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 | 2023 | 2022 |
|---|---|---|
| Other personnel expenses | (31,179) | (21,849) |
| Housing expenses | (187,161) | (122,176) |
| Net marketing expenses | (56,744) | (47,162) |
| Write-off of bad debts, incl. collection agency costs | (34,838) | (13,827) |
| Short-term and low-value lease expenses and other lease adjustments1 | (2,917) | (1,649) |
| Other car expenses | (2,025) | (1,596) |
| Overhead and administrative expenses | (44,953) | (35,920) |
| Total | (359,817) | (244,179) |
Generally, the increase of all items in other operating expenses is directly related to the higher number of clubs, members and employees. Housing expenses also increased significantly due to higher energy costs and marketing expenses increased in line with marketing efforts. The increase in the write-off of bad debts is due to the increase in revenue and changed payment behaviour in the first period after the COVID-19 period. The payment behaviour of members is currently normalising compared to the pre-COVID-19 period.
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.
Customer relationships acquired in a business combination are recognised at fair value at the acquisition date. Separately acquired customer relationships are recognised at historical cost. The brand name is recognised at fair value. Customer relationships and the brand name have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses. The brand name is amortised on a straight-line basis over the 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.
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.
\nOther 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.
\nComputer software development costs recognised as assets are amortised over their estimated useful lives, which do not exceed five years.
\nThe 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.
\nThe 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.
\nUnless 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.
Cost of consumables used is accounted for in the year incurred.
Salaries, wages and social security contributions are charged to the statement of profit or loss based on the terms of employment, where they are due to employees and the tax authorities respectively.
\nThe 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 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.
\nThe 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.
\nIf 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.
\nService 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.
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.
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.
Customer relationships acquired in a business combination are recognised at fair value at the acquisition date. Separately acquired customer relationships are recognised at historical cost. The brand name is recognised at fair value. Customer relationships and the brand name have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses. The brand name is amortised on a straight-line basis over the 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.
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.
\nOther 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.
\nComputer software development costs recognised as assets are amortised over their estimated useful lives, which do not exceed five years.
\nThe 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.
\nThe 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.
\nUnless 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.
Employee benefits expense can be broken down as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Salaries and wages (including share-based payments)1 | (148,987) | (120,998) |
| Social security contributions | (29,428) | (24,527) |
| Pension costs \u2013 defined contribution plans | (2,652) | (2,254) |
| Total | (181,067) | (147,779) |
Salaries and wages include no government grants (2022: \u20ac29 thousand) and social security contributions include no government grants (2022: \u20ac774 thousand).
\nThe increase in employee benefits expense is directly related to the higher number of clubs.
\nIn the year under review, the average number of employees calculated on a full-time equivalent ('FTE') basis was 4,795 (2022: 4,145).
\n| Average number of FTEs during the year | 2023 | 2022 |
|---|---|---|
| Benelux | 1,968 | 1,867 |
| France, Spain & Germany | 2,827 | 2,278 |
| Total | 4,795 | 4,145 |
| \u00a0 | \u00a0 | \u00a0 |
| Club | 4,083 | 3,539 |
| Headquarters | 712 | 606 |
| Total | 4,795 | 4,145 |
Salaries, wages and social security contributions are charged to the statement of profit or loss based on the terms of employment, where they are due to employees and the tax authorities respectively.
\nThe 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.
In the year under review, the average number of employees calculated on a full-time equivalent ('FTE') basis was 4,795 (2022: 4,145).
\n| Average number of FTEs during the year | 2023 | 2022 |
|---|---|---|
| Benelux | 1,968 | 1,867 |
| France, Spain & Germany | 2,827 | 2,278 |
| Total | 4,795 | 4,145 |
| \u00a0 | \u00a0 | \u00a0 |
| Club | 4,083 | 3,539 |
| Headquarters | 712 | 606 |
| Total | 4,795 | 4,145 |
Salaries, wages and social security contributions are charged to the statement of profit or loss based on the terms of employment, where they are due to employees and the tax authorities respectively.
\nThe 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 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.
\nThe 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.
\nIf 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.
\nService 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.
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.
\nDue 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 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 a 66.67% 'at target' performance, not considering threshold performance or overperformance. This led to a vesting of 40,191 shares in 2022 which was accounted for as a modification (\u20ac1.085 thousand).
\nLTIP 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 shares granted were forfeited in the reporting period.
\nLTIP 2020, which originally should have vested in May 2023, also did not vest as two years were affected by NOW limitations and the targets for 2020 and 2021 were not met. As a result, the shares granted were forfeited for the Leadership team. However, the Management Board exercised its discretionary competence in May 2023 and decided that the LTIP 2020 (covering the years 2020-2022) would vest on a pro rata basis for other participants for the year 2022 only and in a limited form. It was considered that targets were only partially achieved for the year 2022, while these were not met in 2020 and 2021. As a result, LTIP 2020 vested in May 2023 based on 25% of the initial award and only for a small group of participants, these not being part of the Leadership team. This led to a vesting of 11,932 shares in 2023 which was accounted for as a modification (\u20ac183 thousand).
\nWhen 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.
\nOrdinary shares released to the members of the Management Board after the 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.
\nDetails of the number of share awards outstanding are as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| At 1 January | 201,119 | 262,576 |
| Awarded during the year | 65,886 | 54,966 |
| Performance adjustment | - | (20,087) |
| Exercised during the year | (11,932) | (40,191) |
| Forfeited during the year | (101,154) | (56,145) |
| At 31 December | 153,919 | 201,119 |
The fair value of the performance shares awarded in 2023 and 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 2023 and 2022 is equal to the share price at the date of granting of \u20ac34.16 (2022: \u20ac37.60).
\nThe share-based payment expenses recognised in 2023, with a corresponding entry directly in equity, amount to \u20ac2,050 thousand (2022: \u20ac28 thousand). Exercised share-based payments amounted to \u20ac183 thousand (2022: \u20ac1,085 thousand).
\nThe 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 \u20ac2.7 million (2022: \u20ac1.1 million) and pay this to the relevant tax authorities with respect to the vesting of outstanding share-based payment awards, with \u20ac0.6 million (2022: nil) 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.
\nThe 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.
\nIf 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.
\nService 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.
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.
\nThe 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.
\nIf 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.
\nService 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 | 2023 | 2022 |
|---|---|---|
| Depreciation of property, plant and equipment | (178,988) | (151,134) |
| Depreciation of right-of-use assets | (200,977) | (171,566) |
| Amortisation of other intangible assets | (9,693) | (8,689) |
| Impairment of property, plant and equipment | (1,280) | - |
| Total | (390,938) | (331,389) |
The increase in depreciation charges is directly related to the higher number of clubs.
\nThe impairment loss in 2023 represented the write-down of fitness equipment as far as the carrying amount exceeded the recoverable amount. This is further disclosed in note 4.3 Property, plant and equipment.
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.
Customer relationships acquired in a business combination are recognised at fair value at the acquisition date. Separately acquired customer relationships are recognised at historical cost. The brand name is recognised at fair value. Customer relationships and the brand name have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses. The brand name is amortised on a straight-line basis over the 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.
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.
\nOther 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.
\nComputer software development costs recognised as assets are amortised over their estimated useful lives, which do not exceed five years.
\nThe 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.
\nThe 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.
\nUnless 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.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Depreciation of property, plant and equipment | (178,988) | (151,134) |
| Depreciation of right-of-use assets | (200,977) | (171,566) |
| Amortisation of other intangible assets | (9,693) | (8,689) |
| Impairment of property, plant and equipment | (1,280) | - |
| Total | (390,938) | (331,389) |
The increase in depreciation charges is directly related to the higher number of clubs.
\nThe impairment loss in 2023 represented the write-down of fitness equipment as far as the carrying amount exceeded the recoverable amount. This is further disclosed in note 4.3 Property, plant and equipment.
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.
Until 2022, the recoverable amount was determined based on the calculation of the fair value less costs of disposal (FVLCD) on pre IFRS 16 basis. As of 2023, the recoverable amount of each CGU is based on value-in-use calculations based on post IFRS 16 basis. On a post IFRS 16 basis, lease liabilities and the associated cashflows are excluded from the determination of the carrying amount and the recoverable amount of the CGU as these are a form of financing activities. Right-of-use assets are included in the carrying amount of the CGU and cash outflows required to replace the right-of-use assets at the end of the lease term are incorporated in the value-in-use calculation. In determining the WACC discount rate, lease liabilities are included in net debt.
Based on the calculated recoverable amounts in the 2023 impairment test, there is significant headroom1 for all CGUs (on average more than 100% of the total carrying amount2), varying from on average of 42% for the CGUs in the reportable segment France, Spain & Germany to more than 200% for all CGUs in Benelux segment. The sensitivity analysis conducted, including a terminal growth rate of 0.0% instead of 2.0% or a 2.5% lower EBITDA margin in combination with a 1% higher WACC, 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.
Details of the assumptions and estimates made are presented under Significant estimates below.
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. 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. 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 CGU 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.
\nThe recoverable amount as at 31 December 2023 was determined based on value-in-use calculations, using the most recent cash flow projections based on financial budgets approved by management, covering a five-year period. These budgets are prepared separately for each of the Group\u2019s CGUs to which the individual assets are allocated. The cash flow projections only include existing clubs and do not take into account any new club openings.
\nThe recoverable amount as at 31 December 2022 was determined based on fair value less cost of disposal (FVLCD) 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 included both existing clubs and new club openings.
\nFor both years, discount rates used are post-tax and reflect current market assessments of the time value of money and the risks specific to the asset. Management considered the effects of applying a pre-tax approach and concluded that this will not materially change the outcome of the impairment test.
\nThe pre- and post-tax discount rates applied to the cash flow projections are shown in the tables below.
\nPost-tax WACC discount rate
\n| \u00a0 | Netherlands | Belgium | Luxembourg | France | Spain | Germany |
|---|---|---|---|---|---|---|
| 20231 | 8.5% | 9.1% | 8.5% | 9.0% | 10.1% | 8.4% |
| 20222 | 10.2% | 10.9% | 10.2% | 10.8% | 12.1% | 10.2% |
Pre-tax WACC discount rate
\n| \u00a0 | Netherlands | Belgium | Luxembourg | France | Spain | Germany |
|---|---|---|---|---|---|---|
| 20231 | 10.6% | 11.4% | 10.7% | 10.8% | 12.2% | 10.4% |
| 20222 | 12.7% | 13.7% | 13.0% | 13.0% | 15.1% | 12.2% |
Climate related risks have been taken into account when determining the values of the key assumptions, but had no material impact on the measurement of the recoverable amount.
\nThe value-in-use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years.
\nThe calculations of value in use for the CGUs are most sensitive to the following assumptions:
\n\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 management\u2019s expectations of market development, and industry expectations.
\nDiscount rates \u2013 Discount rates represents management\u2019s market assessment of the risks specific to the CGUs regarding the time value of money and the individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Group and its CGUs and is derived from its weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the Group\u2019s investors. The cost of debt is based on the interest-bearing borrowings the Group is obliged to service. CGU-specific risk is incorporated by applying individual beta factors. The beta factors are evaluated annually based on publicly available market data. Adjustments to the discount rate are made to factor in the specific amount and timing of the future tax flows in order to reflect a pre-tax discount rate.
\nRevenue growth \u2013 The growth rates are based on historical experience of membership developments taking into account 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.
\nThe budget used for the 2023 impairment testing assumes a compound annual growth rate of revenues over the forecast budget period 2024-2028 of 4.3% for the Netherlands, 4.9% for Belgium, 1.1% for Luxembourg, 5.6% for France, 10.4% for Spain and 26.5% for Germany. After the forecast period, revenues are expected to increase by 2.0% annually, which is the lowest of the current risk free rate and the long term inflation forecast.
\nThe budget used for the 2022 impairment testing (which was based on FVLCD calculations that included both existing clubs and new club openings) assumed a compound annual growth rate of revenues over the forecast budget period 2023-2027 of 9% for the Netherlands, 11% for Belgium, 4% for Luxembourg, 18% for France, 40% for Spain and 159% for Germany. Cash flows beyond the five-year period were extrapolated using a terminal growth rate of 2.0% for all CGUs, which was the lowest of the risk free rate and the long term inflation forecast at the end of December 2022.
\nEBITDA 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 an increase in revenues per member and maturation of immature clubs.
The movement in other intangible assets over the years was as follows:
\n| \u00a0 | Brand name | Customer relationships | Other intangible assets | Total |
|---|---|---|---|---|
| As at 1 January 2022 | \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 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 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 |
\u00a0
\n| \u00a0 | Brand name | Customer relationships | Other intangible assets | Total |
|---|---|---|---|---|
| Year ended 31 December 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Opening net book value | 24,705 | 1,233 | 16,637 | 42,575 |
| Additions | - | - | 11,057 | 11,057 |
| Cost of disposals | - | - | (4) | (4) |
| Amortisation for the year | (2,246) | (657) | (6,790) | (9,693) |
| Accumulated depreciation of disposals | - | - | 4 | 4 |
| Closing net book value | 22,459 | 576 | 20,904 | 43,939 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As at 31 December 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 44,918 | 63,809 | 42,574 | 151,301 |
| Accumulated impairments and amortisation | (22,459) | (63,233) | (21,670) | (107,362) |
| Net book value | 22,459 | 576 | 20,904 | 43,939 |
Additions in 2023 (and 2022) are mainly related to investments in software and development costs. Disposals are related to intangible assets that were no longer in use.
\nThere were no changes in useful lives and residual values, and no impairment charge has been recorded for intangible assets in either period presented.
Customer relationships acquired in a business combination are recognised at fair value at the acquisition date. Separately acquired customer relationships are recognised at historical cost. The brand name is recognised at fair value. Customer relationships and the brand name have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses. The brand name is amortised on a straight-line basis over the 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.
\nCosts 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.
\nJudgement 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.
\nSoftware-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.
\nThe 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.
\nOther 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.
\nComputer software development costs recognised as assets are amortised over their estimated useful lives, which do not exceed five years.
\nGains 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.
\nOther 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.
\nNon-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.
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.
Costs incurred to configure or customise a 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 used their 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.
\nSpecifically, when 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.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Depreciation of property, plant and equipment | (178,988) | (151,134) |
| Depreciation of right-of-use assets | (200,977) | (171,566) |
| Amortisation of other intangible assets | (9,693) | (8,689) |
| Impairment of property, plant and equipment | (1,280) | - |
| Total | (390,938) | (331,389) |
The increase in depreciation charges is directly related to the higher number of clubs.
\nThe impairment loss in 2023 represented the write-down of fitness equipment as far as the carrying amount exceeded the recoverable amount. This is further disclosed in note 4.3 Property, plant and equipment.
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.
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.
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.
The movement in property, plant and equipment over the years was as follows:
\n| \u00a0 | Land and building | Building improvement | Other fixed assets | Total |
|---|---|---|---|---|
| As at 1 January 2022 | \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) |
| Net book value | 1,450 | 601,417 | 234,329 | 837,196 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 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 |
| \u00a0 | Land and building | Building improvement | Other fixed assets | Total |
|---|---|---|---|---|
| Year ended 31 December 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Opening net book value | 1,425 | 717,487 | 270,647 | 989,559 |
| Additions | - | 277,299 | 88,906 | 366,205 |
| Cost of disposals | (2,000) | (7,428) | (4,790) | (14,218) |
| Depreciation for the year | (25) | (102,840) | (76,123) | (178,988) |
| Impairment | - | - | (1,280) | (1,280) |
| Accumulated depreciation of disposals | 600 | 7,491 | 2,825 | 10,916 |
| Closing net book value | - | 892,009 | 280,185 | 1,172,194 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As at 31 December 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | - | 1,309,871 | 667,962 | 1,977,833 |
| Accumulated impairments and depreciation | - | (417,862) | (387,777) | (805,639) |
| Closing net book value | - | 892,009 | 280,185 | 1,172,194 |
As at 31 December 2023, the carrying amount of 'Other fixed assets' includes assets under construction of \u20ac5.3 million (2022: \u20ac20.4 million) and fitness equipment leased out or available to be leased out as part of the All-in membership for a total of \u20ac11.8 million (2022: \u20ac21.2 million).
\nDisposals in 2023 and 2022 related primarily to building improvements and other fixed assets with no carrying value that were no longer in use, as well as the disposal of a building (in 2023).
\nIn 2023, the impairment loss of \u20ac1.3 million represented the write-down to the recoverable amount of fitness equipment available to be leased out as part of the All-in membership in the segment the Netherlands, due to lower than expected sales. The impairment loss was recognised in the statement of profit or loss as part of depreciation, amortisation and impairment charges. The recoverable amount of \u20ac11.8 million as at 31 December 2023 was based on fair value less costs of disposal. In 2022, no impairment losses were recognised,
\nIn July 2022, additions to other fixed assets included a \u20ac44 million transfer from inventories related to fitness equipment. Part of this equipment, with a book value of \u20ac18 million, was acquired by a fitness equipment supplier in December 2022. This disposal was partly settled with purchase invoices in 2022 and for the remaining outstanding balance 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.
\nSubsequent 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.
\nThe 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.
\nGains 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.
\nFixed 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).
\nNon-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.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Depreciation of property, plant and equipment | (178,988) | (151,134) |
| Depreciation of right-of-use assets | (200,977) | (171,566) |
| Amortisation of other intangible assets | (9,693) | (8,689) |
| Impairment of property, plant and equipment | (1,280) | - |
| Total | (390,938) | (331,389) |
The increase in depreciation charges is directly related to the higher number of clubs.
\nThe impairment loss in 2023 represented the write-down of fitness equipment as far as the carrying amount exceeded the recoverable amount. This is further disclosed in note 4.3 Property, plant and equipment.
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.
Group as a lessee (Right-of-use assets)
\nThe 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.
\nThe 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.
\nSet out below are the carrying amounts of right-of-use assets recognised and the movements over the years:
\n| \u00a0 | Leased buildings | Leased vehicles | Other equipment | Total |
|---|---|---|---|---|
| As at 1 January 2022 | 1,202,625 | 3,244 | 210 | 1,206,079 |
| 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 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Additions | 219,244 | - | 66 | 219,310 |
| Remeasurements | 136,621 | 6,633 | - | 143,254 |
| Disposals | - | - | (71) | (71) |
| Depreciation for the year | (198,284) | (2,622) | (71) | (200,977) |
| As at 31 December 2023 | 1,537,149 | 6,670 | 58 | 1,543,877 |
Group as a lessee (lease liabilities)
\nSet out below are the carrying amounts and the movements over the years of lease liabilities related to these right-of-use assets:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| As at 1 January | 1,481,539 | 1,305,159 |
| Additions | 222,183 | 231,285 |
| Remeasurements | 143,026 | 117,045 |
| Accretion of interest | 41,293 | 32,573 |
| COVID-19 rent credits | (526) | (2,415) |
| Payment of lease instalments | (228,203) | (202,108) |
| As at 31 December | 1,659,312 | 1,481,539 |
| Of which: | \u00a0 | \u00a0 |
| Non-current lease liabilities | 1,405,291 | 1,265,086 |
| Current lease liabilities | 254,021 | 216,453 |
Remeasurements of right-of-use assets and lease liabilities are related to the (periodical) indexation of lease payments, renewals of lease contracts, as well as changes in the assumptions related to renewal options.
\nAs a result of the deferral of lease payments and rent credits received, the lease payments in 2023 as reported in the overview above (\u20ac228.2 million), are recognised in the statement of cash flows as lease liabilities interest paid (\u20ac40.1 million) and repayment of lease liability principal (\u20ac188.1 million) respectively. Lease payments in 2022 (\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.
\nThe maturity analysis of lease liabilities is disclosed in note 6.4 Financial risk management.
\nAs part of its response to COVID-19, Basic-Fit negotiated rent waivers with landlords for a total amount of \u20ac0.5 million (2022: \u20ac2.4 million). This is recognised as part of other operating income in the consolidated statement of profit or loss.
\nThe following amounts are recognised in profit or loss over the years related to right-of-use assets and lease liabilities:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Depreciation expense of right-of-use assets | (200,977) | (171,566) |
| Interest expense on lease liabilities | (41,293) | (32,573) |
| COVID-19 rent credits | 526 | 2,415 |
| Expense relating to short-term leases1 | (1,892) | (1,156) |
| Expense relating to leases of low-value assets1 | (923) | (576) |
| Expense relating to lease recalculations and other lease related cost1 | (102) | 83 |
| Total amounts recognised in profit or loss | (244,661) | (203,373) |
The Group recorded total lease-related cash outflows of \u20ac231.0 million in 2023 (2022: \u20ac203.8 million). The Group also recorded non-cash additions to right-of-use assets and lease liabilities of \u20ac365.2 million in 2023 (2022: \u20ac348.3 million). The future cash outflows relating to leases that have not yet commenced are disclosed in note 7.2 Contingencies and commitments.
\nBasic-Fit determines the incremental borrowing rate (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 ranged from 3.3% to 5.6% in 2023 (2022: 1.3% to 5.4%).
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.
\nUnless 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. When 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.
\nThe 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 recognises 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. With respect to vehicle 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 in 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.
\nThe 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.
\nMost of the lease contracts for buildings include extension and termination options. These options are negotiated by management to provide flexibility in terms of 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).
\nExtension options are included in the lease term when the Group has such an economic incentive that exercising the option is reasonably certain. 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.
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.
\nThe 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. These factors include 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.
\nAfter 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).
\nThe 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).
\nBasic-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
The following table is an analysis of 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.
\nThe 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.
\nContractual maturities of financial liabilities (continued)
\n| \u00a0 | 2023 | ||||||
|---|---|---|---|---|---|---|---|
| \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 | 315,089 | - | 324,200 | 256,397 |
| Borrowings1 | 19,275 | 37,398 | 37,981 | 661,972 | - | 756,626 | 623,000 |
| Lease liabilities | 130,693 | 127,302 | 254,514 | 686,538 | 676,133 | 1,875,180 | 1,659,312 |
| Trade payables | 120,488 | - | - | - | - | 120,488 | 120,488 |
| Total non-derivatives | 272,734 | 166,978 | 297,050 | 1,663,599 | 676,133 | 3,076,494 | 2,659,197 |
| \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 |
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.
\nFuture payment obligations under these agreements are as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Within one year | 8,973 | 10,842 |
| After one year but not more than five years | 96,404 | 111,547 |
| More than five years | 149,087 | 157,803 |
| Total | 254,464 | 280,192 |
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 building is not delivered by the lessor in the condition as agreed.
\nNo discount factor is used in determining these commitments.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Future minimum lease payments expected to be received in relation to non-cancellable sub-leases of operating leases | 7,886 | 4,064 |
The Group does not have any contingent rentals or sub-lease expenses.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Depreciation of property, plant and equipment | (178,988) | (151,134) |
| Depreciation of right-of-use assets | (200,977) | (171,566) |
| Amortisation of other intangible assets | (9,693) | (8,689) |
| Impairment of property, plant and equipment | (1,280) | - |
| Total | (390,938) | (331,389) |
The increase in depreciation charges is directly related to the higher number of clubs.
\nThe impairment loss in 2023 represented the write-down of fitness equipment as far as the carrying amount exceeded the recoverable amount. This is further disclosed in note 4.3 Property, plant and equipment.
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.
Goodwill acquired through business combinations is allocated to and monitored on the level of the five cash-generating units (CGUs) as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| The Netherlands | 104,021 | 104,021 |
| Belgium | 83,425 | 83,425 |
| Luxembourg | 12,595 | 12,595 |
| France | 1,607 | 1,607 |
| Spain | 3,195 | 3,195 |
| Total | 204,843 | 204,843 |
Until 2022, the recoverable amount was determined based on the calculation of the fair value less costs of disposal (FVLCD) on pre IFRS 16 basis. As of 2023, the recoverable amount of each CGU is based on value-in-use calculations based on post IFRS 16 basis. On a post IFRS 16 basis, lease liabilities and the associated cashflows are excluded from the determination of the carrying amount and the recoverable amount of the CGU as these are a form of financing activities. Right-of-use assets are included in the carrying amount of the CGU and cash outflows required to replace the right-of-use assets at the end of the lease term are incorporated in the value-in-use calculation. In determining the WACC discount rate, lease liabilities are included in net debt.
Based on the calculated recoverable amounts in the 2023 impairment test, there is significant headroom1 for all CGUs (on average more than 100% of the total carrying amount2), varying from on average of 42% for the CGUs in the reportable segment France, Spain & Germany to more than 200% for all CGUs in Benelux segment. The sensitivity analysis conducted, including a terminal growth rate of 0.0% instead of 2.0% or a 2.5% lower EBITDA margin in combination with a 1% higher WACC, 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.
Details of the assumptions and estimates made are presented under Significant estimates below.
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.
\nGoodwill 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. 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. 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 CGU 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.
\nImpairments to goodwill are not subsequently reversed.
\nReference is also made to note 4.5 Business combinations.
The recoverable amount as at 31 December 2023 was determined based on value-in-use calculations, using the most recent cash flow projections based on financial budgets approved by management, covering a five-year period. These budgets are prepared separately for each of the Group\u2019s CGUs to which the individual assets are allocated. The cash flow projections only include existing clubs and do not take into account any new club openings.
\nThe recoverable amount as at 31 December 2022 was determined based on fair value less cost of disposal (FVLCD) 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 included both existing clubs and new club openings.
\nFor both years, discount rates used are post-tax and reflect current market assessments of the time value of money and the risks specific to the asset. Management considered the effects of applying a pre-tax approach and concluded that this will not materially change the outcome of the impairment test.
\nThe pre- and post-tax discount rates applied to the cash flow projections are shown in the tables below.
\nPost-tax WACC discount rate
\n| \u00a0 | Netherlands | Belgium | Luxembourg | France | Spain | Germany |
|---|---|---|---|---|---|---|
| 20231 | 8.5% | 9.1% | 8.5% | 9.0% | 10.1% | 8.4% |
| 20222 | 10.2% | 10.9% | 10.2% | 10.8% | 12.1% | 10.2% |
Pre-tax WACC discount rate
\n| \u00a0 | Netherlands | Belgium | Luxembourg | France | Spain | Germany |
|---|---|---|---|---|---|---|
| 20231 | 10.6% | 11.4% | 10.7% | 10.8% | 12.2% | 10.4% |
| 20222 | 12.7% | 13.7% | 13.0% | 13.0% | 15.1% | 12.2% |
Climate related risks have been taken into account when determining the values of the key assumptions, but had no material impact on the measurement of the recoverable amount.
\nThe value-in-use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years.
\nThe calculations of value in use for the CGUs are most sensitive to the following assumptions:
\n\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 management\u2019s expectations of market development, and industry expectations.
\nDiscount rates \u2013 Discount rates represents management\u2019s market assessment of the risks specific to the CGUs regarding the time value of money and the individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Group and its CGUs and is derived from its weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the Group\u2019s investors. The cost of debt is based on the interest-bearing borrowings the Group is obliged to service. CGU-specific risk is incorporated by applying individual beta factors. The beta factors are evaluated annually based on publicly available market data. Adjustments to the discount rate are made to factor in the specific amount and timing of the future tax flows in order to reflect a pre-tax discount rate.
\nRevenue growth \u2013 The growth rates are based on historical experience of membership developments taking into account 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.
\nThe budget used for the 2023 impairment testing assumes a compound annual growth rate of revenues over the forecast budget period 2024-2028 of 4.3% for the Netherlands, 4.9% for Belgium, 1.1% for Luxembourg, 5.6% for France, 10.4% for Spain and 26.5% for Germany. After the forecast period, revenues are expected to increase by 2.0% annually, which is the lowest of the current risk free rate and the long term inflation forecast.
\nThe budget used for the 2022 impairment testing (which was based on FVLCD calculations that included both existing clubs and new club openings) assumed a compound annual growth rate of revenues over the forecast budget period 2023-2027 of 9% for the Netherlands, 11% for Belgium, 4% for Luxembourg, 18% for France, 40% for Spain and 159% for Germany. Cash flows beyond the five-year period were extrapolated using a terminal growth rate of 2.0% for all CGUs, which was the lowest of the risk free rate and the long term inflation forecast at the end of December 2022.
\nEBITDA 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 an increase in revenues per member and maturation of immature clubs.
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.
\nNon-financial assets other than goodwill that have suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
\nThe 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.
In 2023, the impairment loss of \u20ac1.3 million represented the write-down to the recoverable amount of fitness equipment available to be leased out as part of the All-in membership in the segment the Netherlands, due to lower than expected sales. The impairment loss was recognised in the statement of profit or loss as part of depreciation, amortisation and impairment charges. The recoverable amount of \u20ac11.8 million as at 31 December 2023 was based on fair value less costs of disposal. In 2022, no impairment losses were recognised,
\nFixed 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).
\nNon-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:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "ixv-377": { "value": "\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Depreciation of property, plant and equipment | (178,988) | (151,134) |
| Depreciation of right-of-use assets | (200,977) | (171,566) |
| Amortisation of other intangible assets | (9,693) | (8,689) |
| Impairment of property, plant and equipment | (1,280) | - |
| Total | (390,938) | (331,389) |
The increase in depreciation charges is directly related to the higher number of clubs.
\nThe impairment loss in 2023 represented the write-down of fitness equipment as far as the carrying amount exceeded the recoverable amount. This is further disclosed in note 4.3 Property, plant and equipment.
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.
The movement in goodwill over the years was as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| As at 1 January | 204,843 | 203,604 |
| Acquired through business combinations1 | - | 1,239 |
| As at 31 December | 204,843 | 204,843 |
| \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:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| The Netherlands | 104,021 | 104,021 |
| Belgium | 83,425 | 83,425 |
| Luxembourg | 12,595 | 12,595 |
| France | 1,607 | 1,607 |
| Spain | 3,195 | 3,195 |
| Total | 204,843 | 204,843 |
Until 2022, the recoverable amount was determined based on the calculation of the fair value less costs of disposal (FVLCD) on pre IFRS 16 basis. As of 2023, the recoverable amount of each CGU is based on value-in-use calculations based on post IFRS 16 basis. On a post IFRS 16 basis, lease liabilities and the associated cashflows are excluded from the determination of the carrying amount and the recoverable amount of the CGU as these are a form of financing activities. Right-of-use assets are included in the carrying amount of the CGU and cash outflows required to replace the right-of-use assets at the end of the lease term are incorporated in the value-in-use calculation. In determining the WACC discount rate, lease liabilities are included in net debt.
Based on the calculated recoverable amounts in the 2023 impairment test, there is significant headroom1 for all CGUs (on average more than 100% of the total carrying amount2), varying from on average of 42% for the CGUs in the reportable segment France, Spain & Germany to more than 200% for all CGUs in Benelux segment. The sensitivity analysis conducted, including a terminal growth rate of 0.0% instead of 2.0% or a 2.5% lower EBITDA margin in combination with a 1% higher WACC, 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.
Details of the assumptions and estimates made are presented under Significant estimates below.
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.
\nGoodwill 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. 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. 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 CGU 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.
\nImpairments to goodwill are not subsequently reversed.
\nReference is also made to note 4.5 Business combinations.
The recoverable amount as at 31 December 2023 was determined based on value-in-use calculations, using the most recent cash flow projections based on financial budgets approved by management, covering a five-year period. These budgets are prepared separately for each of the Group\u2019s CGUs to which the individual assets are allocated. The cash flow projections only include existing clubs and do not take into account any new club openings.
\nThe recoverable amount as at 31 December 2022 was determined based on fair value less cost of disposal (FVLCD) 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 included both existing clubs and new club openings.
\nFor both years, discount rates used are post-tax and reflect current market assessments of the time value of money and the risks specific to the asset. Management considered the effects of applying a pre-tax approach and concluded that this will not materially change the outcome of the impairment test.
\nThe pre- and post-tax discount rates applied to the cash flow projections are shown in the tables below.
\nPost-tax WACC discount rate
\n| \u00a0 | Netherlands | Belgium | Luxembourg | France | Spain | Germany |
|---|---|---|---|---|---|---|
| 20231 | 8.5% | 9.1% | 8.5% | 9.0% | 10.1% | 8.4% |
| 20222 | 10.2% | 10.9% | 10.2% | 10.8% | 12.1% | 10.2% |
Pre-tax WACC discount rate
\n| \u00a0 | Netherlands | Belgium | Luxembourg | France | Spain | Germany |
|---|---|---|---|---|---|---|
| 20231 | 10.6% | 11.4% | 10.7% | 10.8% | 12.2% | 10.4% |
| 20222 | 12.7% | 13.7% | 13.0% | 13.0% | 15.1% | 12.2% |
Climate related risks have been taken into account when determining the values of the key assumptions, but had no material impact on the measurement of the recoverable amount.
\nThe value-in-use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years.
\nThe calculations of value in use for the CGUs are most sensitive to the following assumptions:
\n\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 management\u2019s expectations of market development, and industry expectations.
\nDiscount rates \u2013 Discount rates represents management\u2019s market assessment of the risks specific to the CGUs regarding the time value of money and the individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Group and its CGUs and is derived from its weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the Group\u2019s investors. The cost of debt is based on the interest-bearing borrowings the Group is obliged to service. CGU-specific risk is incorporated by applying individual beta factors. The beta factors are evaluated annually based on publicly available market data. Adjustments to the discount rate are made to factor in the specific amount and timing of the future tax flows in order to reflect a pre-tax discount rate.
\nRevenue growth \u2013 The growth rates are based on historical experience of membership developments taking into account 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.
\nThe budget used for the 2023 impairment testing assumes a compound annual growth rate of revenues over the forecast budget period 2024-2028 of 4.3% for the Netherlands, 4.9% for Belgium, 1.1% for Luxembourg, 5.6% for France, 10.4% for Spain and 26.5% for Germany. After the forecast period, revenues are expected to increase by 2.0% annually, which is the lowest of the current risk free rate and the long term inflation forecast.
\nThe budget used for the 2022 impairment testing (which was based on FVLCD calculations that included both existing clubs and new club openings) assumed a compound annual growth rate of revenues over the forecast budget period 2023-2027 of 9% for the Netherlands, 11% for Belgium, 4% for Luxembourg, 18% for France, 40% for Spain and 159% for Germany. Cash flows beyond the five-year period were extrapolated using a terminal growth rate of 2.0% for all CGUs, which was the lowest of the risk free rate and the long term inflation forecast at the end of December 2022.
\nEBITDA 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 an increase in revenues per member and maturation of immature clubs.
The movement in other intangible assets over the years was as follows:
\n| \u00a0 | Brand name | Customer relationships | Other intangible assets | Total |
|---|---|---|---|---|
| As at 1 January 2022 | \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 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 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 |
\u00a0
\n| \u00a0 | Brand name | Customer relationships | Other intangible assets | Total |
|---|---|---|---|---|
| Year ended 31 December 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Opening net book value | 24,705 | 1,233 | 16,637 | 42,575 |
| Additions | - | - | 11,057 | 11,057 |
| Cost of disposals | - | - | (4) | (4) |
| Amortisation for the year | (2,246) | (657) | (6,790) | (9,693) |
| Accumulated depreciation of disposals | - | - | 4 | 4 |
| Closing net book value | 22,459 | 576 | 20,904 | 43,939 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As at 31 December 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 44,918 | 63,809 | 42,574 | 151,301 |
| Accumulated impairments and amortisation | (22,459) | (63,233) | (21,670) | (107,362) |
| Net book value | 22,459 | 576 | 20,904 | 43,939 |
Additions in 2023 (and 2022) are mainly related to investments in software and development costs. Disposals are related to intangible assets that were no longer in use.
\nThere were no changes in useful lives and residual values, and no impairment charge has been recorded for intangible assets in either period presented.
Customer relationships acquired in a business combination are recognised at fair value at the acquisition date. Separately acquired customer relationships are recognised at historical cost. The brand name is recognised at fair value. Customer relationships and the brand name have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses. The brand name is amortised on a straight-line basis over the 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.
\nCosts 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.
\nJudgement 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.
\nSoftware-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.
\nThe 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.
\nOther 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.
\nComputer software development costs recognised as assets are amortised over their estimated useful lives, which do not exceed five years.
\nGains 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.
\nOther 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.
\nNon-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.
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.
Costs incurred to configure or customise a 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 used their 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.
\nSpecifically, when 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.
There were no acquisitions of business combinations in the year 2023.
\nIn 2022, the Group acquired four fitness clubs in the Netherlands through asset deals and one fitness club in Germany through a share deal:
\n| Acquiree/ Club location | Country | Deal type | Month |
|---|---|---|---|
| Cologne (DE) | Germany | Share deal1 | March 2022 |
| Veldhoven (NL) | The Netherlands | Asset deal | April 2022 |
| Amstelveen (NL) | The Netherlands | Asset deal | July 2022 |
| Rotterdam (NL) | The Netherlands | Asset deal | July 2022 |
| Waalwijk (NL) | The Netherlands | Asset deal | July 2022 |
All acquisitions are considered good opportunities for further growth and the acquisition in Germany 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 in the locations and that these locations are a good fit with 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.
\nThe following table summarises the considerations paid for the acquisitions in 2022, the fair value of assets acquired and the liabilities assumed at the acquisition date.
\n| Fair value recognised on acquisition | 2023 | 2022 |
|---|---|---|
| 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 |
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.
\nAcquisition-related costs are expensed as incurred and included in administrative expenses.
\nThe 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.
\nWhen 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.
\nAny 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.
\nGoodwill 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.
\nAfter 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.
\nWhere 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.
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.
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.
\nGoodwill 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. 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. 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 CGU 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.
\nImpairments to goodwill are not subsequently reversed.
\nReference 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.
\nNon-financial assets other than goodwill that have suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
\nFixed 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).
\nNon-financial assets other than goodwill that have suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
\nImpairment 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.
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.
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.
\nGoodwill 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. 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. 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 CGU 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.
\nImpairments to goodwill are not subsequently reversed.
\nReference 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.
\nNon-financial assets other than goodwill that have suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
\nFixed 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).
\nNon-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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "ixv-380": { "value": "\nReference 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.
Customer relationships acquired in a business combination are recognised at fair value at the acquisition date. Separately acquired customer relationships are recognised at historical cost. The brand name is recognised at fair value. Customer relationships and the brand name have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses. The brand name is amortised on a straight-line basis over the 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.
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.
\nOther 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.
\nComputer software development costs recognised as assets are amortised over their estimated useful lives, which do not exceed five years.
\nThe 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.
\nThe 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.
\nUnless 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.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Insurance reimbursements and indemnity payments | 4,123 | 680 |
| Government grants | 1,499 | 330 |
| Net gain on disposal of property, plant and equipment and right-of-use assets | 719 | 2,941 |
| COVID-19 rent credits | 526 | 2,415 |
| Other operating income | 1 | 300 |
| Total | 6,868 | 6,666 |
Insurance reimbursements and indemnity payments are related to amounts received from (insurance) companies with respect to damage claims (if applicable: as far as the amounts received exceed the book value of underlying assets or directly incurred costs). The gain on the disposal of property, plant and equipment mainly relates to disposal of fitness equipment.
Other operating income includes \u20ac1.5 million government grants related to COVID-19 cost compensation programmes offered by the Dutch and German governments (2022: \u20ac329 thousand related to cost compensation programmes offered by the Belgian, German and French governments).
Operating income that cannot be allocated to revenues as described in note 3.2 Revenue is recognised as other operating income.
\nGovernment 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.
\nGovernment 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.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Insurance reimbursements and indemnity payments | 4,123 | 680 |
| Government grants | 1,499 | 330 |
| Net gain on disposal of property, plant and equipment and right-of-use assets | 719 | 2,941 |
| COVID-19 rent credits | 526 | 2,415 |
| Other operating income | 1 | 300 |
| Total | 6,868 | 6,666 |
Insurance reimbursements and indemnity payments are related to amounts received from (insurance) companies with respect to damage claims (if applicable: as far as the amounts received exceed the book value of underlying assets or directly incurred costs). The gain on the disposal of property, plant and equipment mainly relates to disposal of fitness equipment.
Other operating income includes \u20ac1.5 million government grants related to COVID-19 cost compensation programmes offered by the Dutch and German governments (2022: \u20ac329 thousand related to cost compensation programmes offered by the Belgian, German and French governments).
Operating income that cannot be allocated to revenues as described in note 3.2 Revenue is recognised as other operating income.
\nGovernment 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.
\nGovernment 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.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Other personnel expenses | (31,179) | (21,849) |
| Housing expenses | (187,161) | (122,176) |
| Net marketing expenses | (56,744) | (47,162) |
| Write-off of bad debts, incl. collection agency costs | (34,838) | (13,827) |
| Short-term and low-value lease expenses and other lease adjustments1 | (2,917) | (1,649) |
| Other car expenses | (2,025) | (1,596) |
| Overhead and administrative expenses | (44,953) | (35,920) |
| Total | (359,817) | (244,179) |
Generally, the increase of all items in other operating expenses is directly related to the higher number of clubs, members and employees. Housing expenses also increased significantly due to higher energy costs and marketing expenses increased in line with marketing efforts. The increase in the write-off of bad debts is due to the increase in revenue and changed payment behaviour in the first period after the COVID-19 period. The payment behaviour of members is currently normalising compared to the pre-COVID-19 period.
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.
Other operating income includes \u20ac1.5 million government grants related to COVID-19 cost compensation programmes offered by the Dutch and German governments (2022: \u20ac329 thousand related to cost compensation programmes offered by the Belgian, German and French governments).
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.
\nGovernment 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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "ixv-388": { "value": "\nOperating income that cannot be allocated to revenues as described in note 3.2 Revenue is recognised as other operating income.
\nGovernment 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.
\nGovernment 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.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Other personnel expenses | (31,179) | (21,849) |
| Housing expenses | (187,161) | (122,176) |
| Net marketing expenses | (56,744) | (47,162) |
| Write-off of bad debts, incl. collection agency costs | (34,838) | (13,827) |
| Short-term and low-value lease expenses and other lease adjustments1 | (2,917) | (1,649) |
| Other car expenses | (2,025) | (1,596) |
| Overhead and administrative expenses | (44,953) | (35,920) |
| Total | (359,817) | (244,179) |
Generally, the increase of all items in other operating expenses is directly related to the higher number of clubs, members and employees. Housing expenses also increased significantly due to higher energy costs and marketing expenses increased in line with marketing efforts. The increase in the write-off of bad debts is due to the increase in revenue and changed payment behaviour in the first period after the COVID-19 period. The payment behaviour of members is currently normalising compared to the pre-COVID-19 period.
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.
Movements in the Group provision for impairment of receivables were as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| As at 1 January | (18,436) | (18,594) |
| Provision for impairment recognised during the year | (36,324) | (14,647) |
| Receivables written off during the year as uncollectable | 28,065 | 14,805 |
| As at 31 December | (26,695) | (18,436) |
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.
\nThe 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.
\nThe 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.
\nAs a result of the Group\u2019s prepayment policy, any account receivables balances are automatically past due.
\nAn ageing analysis of the Group\u2019s trade and other receivables that are past due (including provision for expected credit losses) is as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Overdue <30 days | 11,610 | 19,265 |
| Overdue 31-60 days | 3,513 | 2,470 |
| Overdue 61-90 days | 5,399 | 3,632 |
| Overdue >90 days | 20,827 | 10,279 |
| Balance incl. provision | 41,349 | 35,646 |
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 increase in economic uncertainty in 2022 and 2023, 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 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 2023, the provision stood at \u20ac26.7 million (2022: \u20ac18.4 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, BNP Paribas and Citibank. No collateral is held for the aforementioned liquid assets.
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.
Significant judgement is required in determining the expected credit loss allowance. For this purpose, any change in the risk profile of members following the ongoing economic uncertainty prevailing since 2022 should be considered.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Other personnel expenses | (31,179) | (21,849) |
| Housing expenses | (187,161) | (122,176) |
| Net marketing expenses | (56,744) | (47,162) |
| Write-off of bad debts, incl. collection agency costs | (34,838) | (13,827) |
| Short-term and low-value lease expenses and other lease adjustments1 | (2,917) | (1,649) |
| Other car expenses | (2,025) | (1,596) |
| Overhead and administrative expenses | (44,953) | (35,920) |
| Total | (359,817) | (244,179) |
Generally, the increase of all items in other operating expenses is directly related to the higher number of clubs, members and employees. Housing expenses also increased significantly due to higher energy costs and marketing expenses increased in line with marketing efforts. The increase in the write-off of bad debts is due to the increase in revenue and changed payment behaviour in the first period after the COVID-19 period. The payment behaviour of members is currently normalising compared to the pre-COVID-19 period.
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 major components of income tax expense for the years 2023 and 2022 are as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Current income tax: | \u00a0 | \u00a0 |
| Current income tax charge current year | (3,881) | (2,936) |
| Adjustments in respect of current income tax of previous year(s) | (73) | 36 |
| \u00a0 | (3,954) | (2,900) |
| Deferred income tax: | \u00a0 | \u00a0 |
| Change in deferred tax asset for carry-forward losses available for offsetting against future taxable income | (2,794) | 158 |
| Changes in other deferred tax assets and liabilities | 5,785 | 2,196 |
| \u00a0 | 2,991 | 2,354 |
| Total income tax | (963) | (546) |
In 2023 and 2022, all aggregate current and deferred taxes arising in the reporting period have been recognised in the consolidated statement of profit or loss.
\nThe 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.
\n| \u00a0 | 2023 | % | \u00a0 | 2022 | % |
|---|---|---|---|---|---|
| Profit (loss) before income tax | (1,716) | \u00a0 | \u00a0 | (3,141) | \u00a0 |
| Income tax based on Basic-Fit\u2019s domestic rate | 443 | 25.8% | \u00a0 | 810 | 25.8% |
| Effects of tax rates in foreign jurisdictions | 73 | 4.3% | \u00a0 | 210 | 6.7% |
| Adjustments in respect of prior years\u2019 current and deferred taxes | (156) | (9.1)% | \u00a0 | 87 | 2.8% |
| Impact CVAE tax France | (1,076) | (62.7)% | \u00a0 | (1,712) | (54.5)% |
| Recognition of previously unrecognised deferred tax assets and liabilities | - | - | \u00a0 | 357 | 11.4% |
| Impact of tax incentives | 264 | 15.4% | \u00a0 | 97 | 3.1% |
| Impact of non-taxable government grants | 310 | 18.1% | \u00a0 | - | - |
| Non-deductible expenses for tax purposes: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Share-based payments | (529) | (30.8)% | \u00a0 | (7) | (0.2)% |
| Other non-deductible expenses | (292) | (17.0)% | \u00a0 | (388) | (12.4)% |
| At the effective income tax rate | (963) | (56.1)% | \u00a0 | (546) | (17.4)% |
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% (2022: 25.8%). 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 the fact 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 2023 and 2022 relate to differences between the estimated income taxes and final corporate income tax returns.
Impact CVAE tax France
CVAE ('Cotisation sur la Valeur Ajout\u00e9e des Entreprises') is a corporate value-added contribution in France that, based on the Group\u2019s analysis, meets the definition of an income tax as established under IAS 12. The current income tax charge includes an amount of \u20ac1.435 thousand (2022: \u20ac2,262 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 \u20ac1.076 thousand (2022: \u20ac1,712 thousand)
Recognition of previously unrecognised deferred tax assets and liabilities
In 2022, Basic-Fit successfully 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 offset against future taxable profits.
Impact of non-taxable government grants
Adjustments in respect of non-taxable government grants relate to government grants received in the Netherlands that are excluded from taxable income.
Impact of tax incentives
Adjustments in respect of tax incentives mainly relate to energy and other investment allowances in the Netherlands and Luxembourg, as well as a tax credit in France related to donations granted by Basic-Fit to an organisation of general interest accredited by the French state.\u00a0Furthermore, this item includes the stepped tax that is applicable in some countries where income below a certain threshold is taxable at a lower tax rate than the remaining result.
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:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Belgium | 29 | 12 |
| Luxembourg | 106 | 116 |
| Total Income tax receivable | 135 | 128 |
| \u00a0 | 2023 | 2022 |
|---|---|---|
| The Netherlands | 145 | - |
| Belgium | 63 | 40 |
| France1 | 306 | 1,822 |
| Total Income tax payable | 514 | 1,862 |
Deferred taxes relate to the following:
\n| \u00a0 | Consolidated statement of financial position at 31 December | \u00a0 | Consolidated statement of comprehensive income | ||
|---|---|---|---|---|---|
| \u00a0 | 2023 | 2022 | \u00a0 | 2023 | 2022 |
| Losses available for offsetting against future taxable income | 91,296 | 94,090 | \u00a0 | (2,794) | 158 |
| Tax incentives (investment allowance) | 718 | 779 | \u00a0 | (61) | 62 |
| Purchase price allocation | (5,510) | (6,106) | \u00a0 | 596 | 700 |
| Goodwill amortisation for tax purposes | (14,291) | (13,327) | \u00a0 | (964) | (1,328) |
| Right-of-use assets | (390,639) | (347,210) | \u00a0 | (43,429) | - |
| Lease liabilities | 410,184 | 364,295 | \u00a0 | 45,889 | 1,900 |
| Convertible bonds | (11,460) | (13,644) | \u00a0 | 2,184 | 2,060 |
| Valuation of property, plant and equipment | (440) | 241 | \u00a0 | (681) | (526) |
| Timing of expense recognition | 720 | 154 | \u00a0 | 566 | 284 |
| Derivative financial instruments | 1,157 | (528) | \u00a0 | 1,685 | (956) |
| Deferred tax benefit/(expense) | \u00a0 | \u00a0 | \u00a0 | 2,991 | 2,354 |
| Net deferred tax assets/(liabilities) | 81,735 | 78,744 | \u00a0 | \u00a0 | \u00a0 |
This is reflected in the statement of comprehensive income as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Statement of profit or loss | 2,991 | 2,354 |
| Statement of other comprehensive income | - | - |
| Total | 2,991 | 2,354 |
After netting deferred tax assets and deferred tax liabilities within the same tax entity for an amount of \u20ac423.0 million (2022: \u20ac381.9 million), these positions are as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Deferred tax assets | 82,033 | 78,744 |
| Deferred tax liabilities | (298) | - |
| Net deferred tax assets (liabilities) | 81,735 | 78,744 |
Due to amendments to IAS 12 (Deferred Tax related to Assets and Liabilities arising from a Single Transaction as disclosed in note 2.5 Changes in accounting policies and disclosures), the netting amount at 31 December 2022 has been restated from \u20ac34.7 million to \u20ac381.9 million. This had no impact of the netted amount of deferred tax assets.
\nThe following table presents the expected timing of the reversal of deferred tax assets and liabilities:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| To be recovered within 12 months | 5,293 | 7,786 |
| To be recovered after more than 12 months | 76,442 | 70,958 |
| Total | 81,735 | 78,744 |
The gross movement on the deferred income tax account is as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Opening balance as at 1 January | 78,744 | 76,469 |
| Income tax benefit during the period recognised in profit or loss | 2,991 | 2,354 |
| Deferred taxes acquired in business combinations | - | (79) |
| Closing balance as at 31 December | 81,735 | 78,744 |
As at 31 December 2023, Basic-Fit recognised \u20ac91.3 million (2022: \u20ac94.1 million) in 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 on 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. This includes the consideration that it takes time for recently opened clubs to generate positive results. As a result, tax jurisdictions with a relatively high number of recently opened clubs, or many clubs still to be opened, may suffer start-up losses in the coming years. The reason is that revenues are expected to gradually increase with the growth of the number of members, while operating costs for the club are mostly fixed and are incurred as soon as Basic-Fit starts operating the club. Once these clubs become more mature, this will have a positive impact on the taxable income and the amount of losses that can be utilised for the applicable tax jurisdiction.
\nThe 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 that 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 in the taxable entities HealthCity Belgi\u00eb N.V., Basic-Fit Belgium B.V., 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 2024 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 tax 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.
\nFurthermore, deferred tax assets have been recognised for part of the loss carry-forwards of Basic Fit Spain S.A. Most of the tax loss carry-forwards of Basic Fit Spain S.A. were incurred in the period before the company started operating under the Basic-Fit brand (at the end of 2013, with 17 clubs). Based on the budget for 2024 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.
\nIn total, no deferred tax assets have been recognised for gross loss tax carry-forwards amounting to \u20ac42.3 million (2022: \u20ac43.2 million), mainly related to Basic Fit Spain S.A. There are no restrictions on the expiration of these tax loss carry-forwards.
Pillar Two legislation has been enacted or substantively enacted in all jurisdictions in which the Group operates. The legislation will be effective for the Group\u2019s financial year beginning 1 January 2024. The Group has performed an assessment of the Group\u2019s potential exposure to Pillar Two income taxes.
\nThis assessment is based on the most recent information available regarding the financial performance of the constituent entities in the Group. Based on the assessment performed, the Pillar Two effective tax rates in all jurisdictions in which the Group operates are above 15% and management is not currently aware of any circumstances under which this might change. Therefore, the Group does not expect a potential exposure to Pillar Two top-up taxes.
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.
\nCurrent 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.
\nCurrent 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 recognised 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.
\nDeferred 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.
\nDeferred 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.
\nThe 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.
\nDeferred 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.
Deferred taxes relate to the following:
\n| \u00a0 | Consolidated statement of financial position at 31 December | \u00a0 | Consolidated statement of comprehensive income | ||
|---|---|---|---|---|---|
| \u00a0 | 2023 | 2022 | \u00a0 | 2023 | 2022 |
| Losses available for offsetting against future taxable income | 91,296 | 94,090 | \u00a0 | (2,794) | 158 |
| Tax incentives (investment allowance) | 718 | 779 | \u00a0 | (61) | 62 |
| Purchase price allocation | (5,510) | (6,106) | \u00a0 | 596 | 700 |
| Goodwill amortisation for tax purposes | (14,291) | (13,327) | \u00a0 | (964) | (1,328) |
| Right-of-use assets | (390,639) | (347,210) | \u00a0 | (43,429) | - |
| Lease liabilities | 410,184 | 364,295 | \u00a0 | 45,889 | 1,900 |
| Convertible bonds | (11,460) | (13,644) | \u00a0 | 2,184 | 2,060 |
| Valuation of property, plant and equipment | (440) | 241 | \u00a0 | (681) | (526) |
| Timing of expense recognition | 720 | 154 | \u00a0 | 566 | 284 |
| Derivative financial instruments | 1,157 | (528) | \u00a0 | 1,685 | (956) |
| Deferred tax benefit/(expense) | \u00a0 | \u00a0 | \u00a0 | 2,991 | 2,354 |
| Net deferred tax assets/(liabilities) | 81,735 | 78,744 | \u00a0 | \u00a0 | \u00a0 |
This is reflected in the statement of comprehensive income as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Statement of profit or loss | 2,991 | 2,354 |
| Statement of other comprehensive income | - | - |
| Total | 2,991 | 2,354 |
After netting deferred tax assets and deferred tax liabilities within the same tax entity for an amount of \u20ac423.0 million (2022: \u20ac381.9 million), these positions are as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Deferred tax assets | 82,033 | 78,744 |
| Deferred tax liabilities | (298) | - |
| Net deferred tax assets (liabilities) | 81,735 | 78,744 |
Due to amendments to IAS 12 (Deferred Tax related to Assets and Liabilities arising from a Single Transaction as disclosed in note 2.5 Changes in accounting policies and disclosures), the netting amount at 31 December 2022 has been restated from \u20ac34.7 million to \u20ac381.9 million. This had no impact of the netted amount of deferred tax assets.
\nThe following table presents the expected timing of the reversal of deferred tax assets and liabilities:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| To be recovered within 12 months | 5,293 | 7,786 |
| To be recovered after more than 12 months | 76,442 | 70,958 |
| Total | 81,735 | 78,744 |
The gross movement on the deferred income tax account is as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Opening balance as at 1 January | 78,744 | 76,469 |
| Income tax benefit during the period recognised in profit or loss | 2,991 | 2,354 |
| Deferred taxes acquired in business combinations | - | (79) |
| Closing balance as at 31 December | 81,735 | 78,744 |
As at 31 December 2023, Basic-Fit recognised \u20ac91.3 million (2022: \u20ac94.1 million) in 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 on 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. This includes the consideration that it takes time for recently opened clubs to generate positive results. As a result, tax jurisdictions with a relatively high number of recently opened clubs, or many clubs still to be opened, may suffer start-up losses in the coming years. The reason is that revenues are expected to gradually increase with the growth of the number of members, while operating costs for the club are mostly fixed and are incurred as soon as Basic-Fit starts operating the club. Once these clubs become more mature, this will have a positive impact on the taxable income and the amount of losses that can be utilised for the applicable tax jurisdiction.
\nThe 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 that 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 in the taxable entities HealthCity Belgi\u00eb N.V., Basic-Fit Belgium B.V., 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 2024 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 tax 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.
\nFurthermore, deferred tax assets have been recognised for part of the loss carry-forwards of Basic Fit Spain S.A. Most of the tax loss carry-forwards of Basic Fit Spain S.A. were incurred in the period before the company started operating under the Basic-Fit brand (at the end of 2013, with 17 clubs). Based on the budget for 2024 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.
\nIn total, no deferred tax assets have been recognised for gross loss tax carry-forwards amounting to \u20ac42.3 million (2022: \u20ac43.2 million), mainly related to Basic Fit Spain S.A. There are no restrictions on the expiration of these tax loss carry-forwards.
Deferred income tax is recognised 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.
\nDeferred 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.
\nDeferred 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.
\nThe 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.
\nDeferred 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.
A breakdown of current income tax receivable and current income tax payable per country is as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Belgium | 29 | 12 |
| Luxembourg | 106 | 116 |
| Total Income tax receivable | 135 | 128 |
| \u00a0 | 2023 | 2022 |
|---|---|---|
| The Netherlands | 145 | - |
| Belgium | 63 | 40 |
| France1 | 306 | 1,822 |
| Total Income tax payable | 514 | 1,862 |
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.
\nCurrent 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.
\nCurrent 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 recognised 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.
\nDeferred 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.
\nDeferred 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.
\nThe 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.
\nDeferred 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 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.
\nCurrent 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.
Deferred income tax is recognised 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.
\nDeferred 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.
\nDeferred 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.
\nThe 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.
\nDeferred 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 movement in goodwill over the years was as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| As at 1 January | 204,843 | 203,604 |
| Acquired through business combinations1 | - | 1,239 |
| As at 31 December | 204,843 | 204,843 |
| \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:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| The Netherlands | 104,021 | 104,021 |
| Belgium | 83,425 | 83,425 |
| Luxembourg | 12,595 | 12,595 |
| France | 1,607 | 1,607 |
| Spain | 3,195 | 3,195 |
| Total | 204,843 | 204,843 |
Until 2022, the recoverable amount was determined based on the calculation of the fair value less costs of disposal (FVLCD) on pre IFRS 16 basis. As of 2023, the recoverable amount of each CGU is based on value-in-use calculations based on post IFRS 16 basis. On a post IFRS 16 basis, lease liabilities and the associated cashflows are excluded from the determination of the carrying amount and the recoverable amount of the CGU as these are a form of financing activities. Right-of-use assets are included in the carrying amount of the CGU and cash outflows required to replace the right-of-use assets at the end of the lease term are incorporated in the value-in-use calculation. In determining the WACC discount rate, lease liabilities are included in net debt.
Based on the calculated recoverable amounts in the 2023 impairment test, there is significant headroom1 for all CGUs (on average more than 100% of the total carrying amount2), varying from on average of 42% for the CGUs in the reportable segment France, Spain & Germany to more than 200% for all CGUs in Benelux segment. The sensitivity analysis conducted, including a terminal growth rate of 0.0% instead of 2.0% or a 2.5% lower EBITDA margin in combination with a 1% higher WACC, 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.
Details of the assumptions and estimates made are presented under Significant estimates below.
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.
\nGoodwill 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. 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. 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 CGU 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.
\nImpairments to goodwill are not subsequently reversed.
\nReference is also made to note 4.5 Business combinations.
The recoverable amount as at 31 December 2023 was determined based on value-in-use calculations, using the most recent cash flow projections based on financial budgets approved by management, covering a five-year period. These budgets are prepared separately for each of the Group\u2019s CGUs to which the individual assets are allocated. The cash flow projections only include existing clubs and do not take into account any new club openings.
\nThe recoverable amount as at 31 December 2022 was determined based on fair value less cost of disposal (FVLCD) 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 included both existing clubs and new club openings.
\nFor both years, discount rates used are post-tax and reflect current market assessments of the time value of money and the risks specific to the asset. Management considered the effects of applying a pre-tax approach and concluded that this will not materially change the outcome of the impairment test.
\nThe pre- and post-tax discount rates applied to the cash flow projections are shown in the tables below.
\nPost-tax WACC discount rate
\n| \u00a0 | Netherlands | Belgium | Luxembourg | France | Spain | Germany |
|---|---|---|---|---|---|---|
| 20231 | 8.5% | 9.1% | 8.5% | 9.0% | 10.1% | 8.4% |
| 20222 | 10.2% | 10.9% | 10.2% | 10.8% | 12.1% | 10.2% |
Pre-tax WACC discount rate
\n| \u00a0 | Netherlands | Belgium | Luxembourg | France | Spain | Germany |
|---|---|---|---|---|---|---|
| 20231 | 10.6% | 11.4% | 10.7% | 10.8% | 12.2% | 10.4% |
| 20222 | 12.7% | 13.7% | 13.0% | 13.0% | 15.1% | 12.2% |
Climate related risks have been taken into account when determining the values of the key assumptions, but had no material impact on the measurement of the recoverable amount.
\nThe value-in-use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years.
\nThe calculations of value in use for the CGUs are most sensitive to the following assumptions:
\n\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 management\u2019s expectations of market development, and industry expectations.
\nDiscount rates \u2013 Discount rates represents management\u2019s market assessment of the risks specific to the CGUs regarding the time value of money and the individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Group and its CGUs and is derived from its weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the Group\u2019s investors. The cost of debt is based on the interest-bearing borrowings the Group is obliged to service. CGU-specific risk is incorporated by applying individual beta factors. The beta factors are evaluated annually based on publicly available market data. Adjustments to the discount rate are made to factor in the specific amount and timing of the future tax flows in order to reflect a pre-tax discount rate.
\nRevenue growth \u2013 The growth rates are based on historical experience of membership developments taking into account 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.
\nThe budget used for the 2023 impairment testing assumes a compound annual growth rate of revenues over the forecast budget period 2024-2028 of 4.3% for the Netherlands, 4.9% for Belgium, 1.1% for Luxembourg, 5.6% for France, 10.4% for Spain and 26.5% for Germany. After the forecast period, revenues are expected to increase by 2.0% annually, which is the lowest of the current risk free rate and the long term inflation forecast.
\nThe budget used for the 2022 impairment testing (which was based on FVLCD calculations that included both existing clubs and new club openings) assumed a compound annual growth rate of revenues over the forecast budget period 2023-2027 of 9% for the Netherlands, 11% for Belgium, 4% for Luxembourg, 18% for France, 40% for Spain and 159% for Germany. Cash flows beyond the five-year period were extrapolated using a terminal growth rate of 2.0% for all CGUs, which was the lowest of the risk free rate and the long term inflation forecast at the end of December 2022.
\nEBITDA 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 an increase in revenues per member and maturation of immature clubs.
There were no acquisitions of business combinations in the year 2023.
\nIn 2022, the Group acquired four fitness clubs in the Netherlands through asset deals and one fitness club in Germany through a share deal:
\n| Acquiree/ Club location | Country | Deal type | Month |
|---|---|---|---|
| Cologne (DE) | Germany | Share deal1 | March 2022 |
| Veldhoven (NL) | The Netherlands | Asset deal | April 2022 |
| Amstelveen (NL) | The Netherlands | Asset deal | July 2022 |
| Rotterdam (NL) | The Netherlands | Asset deal | July 2022 |
| Waalwijk (NL) | The Netherlands | Asset deal | July 2022 |
All acquisitions are considered good opportunities for further growth and the acquisition in Germany 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 in the locations and that these locations are a good fit with 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.
\nThe following table summarises the considerations paid for the acquisitions in 2022, the fair value of assets acquired and the liabilities assumed at the acquisition date.
\n| Fair value recognised on acquisition | 2023 | 2022 |
|---|---|---|
| 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 |
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.
\nAcquisition-related costs are expensed as incurred and included in administrative expenses.
\nThe 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.
\nWhen 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.
\nAny 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.
\nGoodwill 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.
\nAfter 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.
\nWhere 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.
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.
\nGoodwill 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. 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. 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 CGU 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.
\nImpairments to goodwill are not subsequently reversed.
\nReference is also made to note 4.5 Business combinations.
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.
\nAcquisition-related costs are expensed as incurred and included in administrative expenses.
\nThe 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.
\nWhen 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.
\nAny 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.
\nGoodwill 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.
\nAfter 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.
\nWhere 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.
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.
\nGoodwill 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. 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. 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 CGU 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.
\nImpairments to goodwill are not subsequently reversed.
\nReference is also made to note 4.5 Business combinations.
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.
\nAcquisition-related costs are expensed as incurred and included in administrative expenses.
\nThe 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.
\nWhen 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.
\nAny 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.
\nGoodwill 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.
\nAfter 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.
\nWhere 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.
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.
\nGoodwill 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. 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. 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 CGU 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.
\nImpairments to goodwill are not subsequently reversed.
\nReference is also made to note 4.5 Business combinations.
Customer relationships acquired in a business combination are recognised at fair value at the acquisition date. Separately acquired customer relationships are recognised at historical cost. The brand name is recognised at fair value. Customer relationships and the brand name have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses. The brand name is amortised on a straight-line basis over the 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.
\nCosts 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.
\nJudgement 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.
\nSoftware-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.
\nThe 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.
\nOther 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.
\nComputer software development costs recognised as assets are amortised over their estimated useful lives, which do not exceed five years.
\nGains 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.
\nOther 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.
\nNon-financial assets other than goodwill that have suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
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.
\nAcquisition-related costs are expensed as incurred and included in administrative expenses.
\nThe 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.
\nWhen 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.
\nAny 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.
\nGoodwill 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.
\nAfter 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.
\nWhere 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.
Customer relationships acquired in a business combination are recognised at fair value at the acquisition date. Separately acquired customer relationships are recognised at historical cost. The brand name is recognised at fair value. Customer relationships and the brand name have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses. The brand name is amortised on a straight-line basis over the 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.
\nCosts 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.
\nJudgement 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.
\nSoftware-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.
\nThe 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.
\nOther 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.
\nComputer software development costs recognised as assets are amortised over their estimated useful lives, which do not exceed five years.
\nGains 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.
\nOther 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.
\nNon-financial assets other than goodwill that have suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
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.
\nCosts 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.
\nJudgement 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.
\nComputer software development costs recognised as assets are amortised over their estimated useful lives, which do not exceed five years.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "ixv-514": { "value": "\nProperty, 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.
\nSubsequent 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.
\nThe 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.
\nGains 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.
\nFixed 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).
\nNon-financial assets other than goodwill that have suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
Group as a lessee (lease liabilities)
\nSet out below are the carrying amounts and the movements over the years of lease liabilities related to these right-of-use assets:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| As at 1 January | 1,481,539 | 1,305,159 |
| Additions | 222,183 | 231,285 |
| Remeasurements | 143,026 | 117,045 |
| Accretion of interest | 41,293 | 32,573 |
| COVID-19 rent credits | (526) | (2,415) |
| Payment of lease instalments | (228,203) | (202,108) |
| As at 31 December | 1,659,312 | 1,481,539 |
| Of which: | \u00a0 | \u00a0 |
| Non-current lease liabilities | 1,405,291 | 1,265,086 |
| Current lease liabilities | 254,021 | 216,453 |
Remeasurements of right-of-use assets and lease liabilities are related to the (periodical) indexation of lease payments, renewals of lease contracts, as well as changes in the assumptions related to renewal options.
\nAs a result of the deferral of lease payments and rent credits received, the lease payments in 2023 as reported in the overview above (\u20ac228.2 million), are recognised in the statement of cash flows as lease liabilities interest paid (\u20ac40.1 million) and repayment of lease liability principal (\u20ac188.1 million) respectively. Lease payments in 2022 (\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.
\nThe maturity analysis of lease liabilities is disclosed in note 6.4 Financial risk management.
\nAs part of its response to COVID-19, Basic-Fit negotiated rent waivers with landlords for a total amount of \u20ac0.5 million (2022: \u20ac2.4 million). This is recognised as part of other operating income in the consolidated statement of profit or loss.
\nThe following amounts are recognised in profit or loss over the years related to right-of-use assets and lease liabilities:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Depreciation expense of right-of-use assets | (200,977) | (171,566) |
| Interest expense on lease liabilities | (41,293) | (32,573) |
| COVID-19 rent credits | 526 | 2,415 |
| Expense relating to short-term leases1 | (1,892) | (1,156) |
| Expense relating to leases of low-value assets1 | (923) | (576) |
| Expense relating to lease recalculations and other lease related cost1 | (102) | 83 |
| Total amounts recognised in profit or loss | (244,661) | (203,373) |
The Group recorded total lease-related cash outflows of \u20ac231.0 million in 2023 (2022: \u20ac203.8 million). The Group also recorded non-cash additions to right-of-use assets and lease liabilities of \u20ac365.2 million in 2023 (2022: \u20ac348.3 million). The future cash outflows relating to leases that have not yet commenced are disclosed in note 7.2 Contingencies and commitments.
\nBasic-Fit determines the incremental borrowing rate (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 ranged from 3.3% to 5.6% in 2023 (2022: 1.3% to 5.4%).
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. When 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.
\nThe 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 recognises 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 Group\u2018s interest-bearing borrowings at 31 December 2023 and 31 December 2022, including the movements during 2023 and 2022, are summarised in the following tables:
\n| \u00a0 | \u00a0 | \u00a0 | Cash settled | \u00a0 | Other changes (non-cash) | \u00a0 | \u00a0 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | Balance as at 1 January 2023 | \u00a0 | New loans | Repayments | \u00a0 | Amortisation | Additions (lease liabilities) | COVID-19 rent credits | Accretion of interest | \u00a0 | Balance as at 31 December 2023 |
| Floating rate borrowings (non-current and current) | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | |
| Bank borrowings | 250,000 | \u00a0 | - | - | \u00a0 | - | - | - | - | \u00a0 | 250,000 |
| Drawn revolving credit facility | 210,000 | \u00a0 | 145,000 | - | \u00a0 | - | - | - | - | \u00a0 | 355,000 |
| GO-C facility | 13,333 | \u00a0 | - | (13,333) | \u00a0 | - | - | - | - | \u00a0 | - |
| Schuldschein | 10,000 | \u00a0 | - | - | \u00a0 | - | - | - | - | \u00a0 | 10,000 |
| Borrowing costs | (1,470) | \u00a0 | (3,505) | - | \u00a0 | 781 | - | - | - | \u00a0 | (4,194) |
| \u00a0 | 481,863 | \u00a0 | 141,495 | (13,333) | \u00a0 | 781 | - | - | - | \u00a0 | 610,806 |
| \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 | |
| Convertible bonds \u2013 liability component | 247,248 | \u00a0 | - | - | \u00a0 | - | - | - | 9,149 | \u00a0 | 256,397 |
| Schuldschein | 8,000 | \u00a0 | - | - | \u00a0 | - | - | - | - | \u00a0 | 8,000 |
| Lease liabilities | 1,481,539 | \u00a0 | - | (228,203) | \u00a0 | - | 365,209 | (526) | 41,293 | \u00a0 | 1,659,312 |
| \u00a0 | 1,736,787 | \u00a0 | - | (228,203) | \u00a0 | - | 365,209 | (526) | 50,442 | \u00a0 | 1,923,709 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | 2,218,650 | \u00a0 | 141,495 | (241,536) | \u00a0 | 781 | 365,209 | (526) | 50,442 | \u00a0 | 2,534,515 |
| \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 |
| Non-current lease liabilities | 1,265,086 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,405,291 |
| Non-current borrowings | 723,778 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 857,203 |
| Current lease liabilities | 216,453 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 254,021 |
| Current borrowings | 13,333 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 18,000 |
| \u00a0 | \u00a0 | \u00a0 | Cash settled | \u00a0 | Other changes (non-cash) | \u00a0 | \u00a0 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | Balance as at 1 January 2022 | \u00a0 | New loans | Repayments | \u00a0 | Amortisation | Additions (lease liabilities) | COVID-19 rent credits | Accretion of interest | \u00a0 | Balance as at 31 December 2022 |
| Floating rate borrowings (non-current) | \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 | \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 |
| Fixed rate borrowings and lease liabilities (non-current and current) | \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 | 1,923,115 | \u00a0 | 210,000 | (302,335) | \u00a0 | 715 | 348,330 | (2,415) | 41,240 | \u00a0 | 2,218,650 |
| Of which: | \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 | 1,265,086 |
| Non-current borrowings | 517,729 | \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 | 216,453 |
| Current borrowings | 100,227 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 13,333 |
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 on 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.
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Carrying amount of liability at 1 January | 247,248 | 238,581 |
| \u00a0 | \u00a0 | \u00a0 |
| Accrued interest | 13,704 | 13,222 |
| Interest paid | (4,555) | (4,555) |
| Carrying amount of liability at 31 December 2023 | 256,397 | 247,248 |
In June 2023, the Group successfully completed an amendment and extension of its existing facilities agreement, which is recognised as a modification with a prospective adjustment of the effective interest rate to reflect the new market rate and without recognising a modification gain or loss. Citibank was added as a new member of the syndicate, which already included Rabobank, ABN AMRO, ING Bank, BNP Paribas and KBC Bank.
\nThe amended and extended facilities agreement consists of a \u20ac250 million term loan and a \u20ac400 million revolving credit facility, totalling \u20ac650 million. In addition to the term loan and revolving credit facility, the agreement includes a new uncommitted revolving credit facility accordion of up to \u20ac150 million. In December 2023, the Company received commitment from its syndicate banks to draw \u20ac110 million from the accordion facility. At 31 December 2023, this amount had not yet been drawn. In January 2024, the Company received commitment from its syndicate banks to draw another \u20ac20 million. Basic-Fit can request the syndicated banks to make the remaining \u20ac20 million of the accordion facility available under the terms of the senior facility agreement, but the amount is not yet committed. Furthermore, in December 2023, the Company signed an agreement with Banco Santander for a \u20ac30 million uncommitted revolving credit facility. At 31 December 2023 no amount was drawn.
\nThe maturities of both the term loan and revolving credit facility have been extended to June 2027, with the option to request further extensions of one year in both 2024 and 2025, ultimately to 2029. The margins in the ratchet on both facilities have been increased by 25 basis points, reflecting the lending environment at the moment of the amendment and extension of the facilities agreement.
\nAs at 31 December 2023, an amount of \u20ac11.0 million (31 December 2022: \u20ac10.1 million) of the revolving credit facility including the committed part of the accordion of \u20ac510 million (31 December 2022: \u20ac320 million) had been used for bank guarantees and \u20ac355 million (31 December 2022: \u20ac210 million) had been drawn in cash.
\nThe interest is variable and based on the three-month Euribor rate plus a margin that depends on certain leverage covenants (Euribor plus margin stood at 6.1% as at 31 December 2023 and 4.4% as at 31 December 2022). The term loan and RCF are unsecured.
\nIn May 2020, the Company entered into a \u20ac60 million GO-C facility agreement, repayable quarterly in a straight line over two years, after an initial one-year grace period. The last repayment was made in May 2023.
\nIn October 2019, Basic-Fit completed a Schuldschein issuance in euro-denominated tranches. As at 31 December 2023, the outstanding amount was \u20ac18.0 million (2022: \u20ac18.0 million). For an amount of \u20ac8.0 million, the interest is fixed at 1.55% (2022: 1.55%) and for the remaining part, the interest is variable and based on the Euribor rate plus a margin, together 5.68% at 31 December 2023 (2022: 3.45%). This loan is unsecured. As at 31 December 2023, the total outstanding amount is classified as current borrowings as repayment must be made within 12 months.
\nThe carrying amount of the borrowings is presented net of finance costs (2023: \u20ac4.2 million; 2022: \u20ac1.5 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. The increase in the carrying amount of the borrowing costs relates to the refinancing in June 2023 and the fee related to the accordion commitment in December 2023.
\nThis loan was repayable in quarterly instalments of \u20ac15 thousand. The interest rate was 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.
\nBorrowings 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.
\nThe 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.
\nReference 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 following table is an analysis of 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.
\nThe 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.
\nContractual maturities of financial liabilities (continued)
\n| \u00a0 | 2023 | ||||||
|---|---|---|---|---|---|---|---|
| \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 | 315,089 | - | 324,200 | 256,397 |
| Borrowings1 | 19,275 | 37,398 | 37,981 | 661,972 | - | 756,626 | 623,000 |
| Lease liabilities | 130,693 | 127,302 | 254,514 | 686,538 | 676,133 | 1,875,180 | 1,659,312 |
| Trade payables | 120,488 | - | - | - | - | 120,488 | 120,488 |
| Total non-derivatives | 272,734 | 166,978 | 297,050 | 1,663,599 | 676,133 | 3,076,494 | 2,659,197 |
| \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 |
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 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.
\nThe Group\u2019s financial liabilities include trade and other payables, loans and borrowings, including bank overdrafts and derivative financial instruments.
\nSubsequent 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.
\nDerecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
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.
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.
\nUnless 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. When 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.
\nThe 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 recognises 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. With respect to vehicle 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 in 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.
\nThe 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.
\nMost of the lease contracts for buildings include extension and termination options. These options are negotiated by management to provide flexibility in terms of 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).
\nExtension options are included in the lease term when the Group has such an economic incentive that exercising the option is reasonably certain. 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.
There were no acquisitions of business combinations in the year 2023.
\nIn 2022, the Group acquired four fitness clubs in the Netherlands through asset deals and one fitness club in Germany through a share deal:
\n| Acquiree/ Club location | Country | Deal type | Month |
|---|---|---|---|
| Cologne (DE) | Germany | Share deal1 | March 2022 |
| Veldhoven (NL) | The Netherlands | Asset deal | April 2022 |
| Amstelveen (NL) | The Netherlands | Asset deal | July 2022 |
| Rotterdam (NL) | The Netherlands | Asset deal | July 2022 |
| Waalwijk (NL) | The Netherlands | Asset deal | July 2022 |
All acquisitions are considered good opportunities for further growth and the acquisition in Germany 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 in the locations and that these locations are a good fit with 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.
\nThe following table summarises the considerations paid for the acquisitions in 2022, the fair value of assets acquired and the liabilities assumed at the acquisition date.
\n| Fair value recognised on acquisition | 2023 | 2022 |
|---|---|---|
| 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 |
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.
\nAcquisition-related costs are expensed as incurred and included in administrative expenses.
\nThe 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.
\nWhen 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.
\nAny 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.
\nGoodwill 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.
\nAfter 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.
\nWhere 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.
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.
\nAcquisition-related costs are expensed as incurred and included in administrative expenses.
\nThe 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.
\nWhen 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.
\nAny 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.
\nGoodwill 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.
\nAfter 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.
\nWhere 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.
On 4 July 2023, the Group acquired the remaining 49% interest in B-Securit\u00e9 B.V., increasing1 its ownership interest to 100%. The Group paid a cash consideration of \u20ac350 thousand to the non-controlling shareholder. The carrying value of the net assets of B-Securit\u00e9 B.V. was nil. The difference between consideration paid and carrying amount of the net assets of \u20ac350 thousand was recognised in retained earnings.
Investments in associates are accounted for using the equity method. The aggregate of the Group\u2019s share in the profit or loss of an associate is shown on the face of the statement of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate.
\nAccording to the equity method, the investment in an associate is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group\u2019s share of net assets of the associate since the acquisition date. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is not tested for impairment separately. Thus, reversals of impairments may effectively include reversal of goodwill impairments. Impairments and reversals are presented within \u2018Share of profit of an associate\u2019 in the statement of profit or loss.
Investments in associates are accounted for using the equity method. The aggregate of the Group\u2019s share in the profit or loss of an associate is shown on the face of the statement of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate.
\nAccording to the equity method, the investment in an associate is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group\u2019s share of net assets of the associate since the acquisition date. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is not tested for impairment separately. Thus, reversals of impairments may effectively include reversal of goodwill impairments. Impairments and reversals are presented within \u2018Share of profit of an associate\u2019 in the statement of profit or loss.
The composition of the inventories was as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Food and drinks | 4,042 | 3,621 |
| Fitness equipment | - | 755 |
| Other goods | 19,748 | 16,517 |
| Total | 23,790 | 20,893 |
'Food and drinks' consist primarily of sports water that members with a (paid) 'sports water add-on' can drink in the clubs.
\n'Other goods' includes goods that are sold via the online store, vending machines and to third parties. The increase is in line with an increase in other revenues.
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.
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 | 2023 | 2022 |
|---|---|---|
| Member and trade receivables | 68,044 | 54,082 |
| Less: allowance for expected credit losses | (26,695) | (18,436) |
| Receivables \u2013 net | 41,349 | 35,646 |
| Security deposits | 10,064 | 8,912 |
| Loan receivable | - | 29 |
| Taxes and social charges (mainly VAT) | 7,689 | 17,709 |
| Prepayments | 4,692 | 5,236 |
| Other receivables and accrued income | 26,517 | 18,213 |
| Total receivables | 90,311 | 85,745 |
| Less: non-current portion of security deposits | 10,064 | 8,912 |
| Less: non-current loans receivable | - | 29 |
| Total non-current portion | 10,064 | 8,941 |
| Total current portion | 80,247 | 76,804 |
The decrease in taxes and social charges receivable is mainly related to VAT and is the result of the timing of invoices issued and received, and whether purchases are invoiced with or without VAT.
\nThe 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 economic uncertainty.
\nThe 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:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| As at 1 January | (18,436) | (18,594) |
| Provision for impairment recognised during the year | (36,324) | (14,647) |
| Receivables written off during the year as uncollectable | 28,065 | 14,805 |
| As at 31 December | (26,695) | (18,436) |
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.
\nThe 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.
\nTrade 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.
\nReference 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:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Cash in bank and on hand | 68,067 | 42,165 |
| Cash in transit | 2,867 | 1,345 |
| Total | 70,934 | 43,510 |
All cash and cash equivalents are available for immediate use by the Group, except for an amount of \u20ac205 thousand (2022: \u20ac205 thousand) related to bank guarantees.
In the statement of cash flows, cash and cash equivalents include cash on hand, deposits held at call with financial institutions and bank overdrafts (if any). 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:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Trade payables | 120,488 | 149,167 |
| Deferred revenues | 29,888 | 17,435 |
| Holiday allowance and vacation days accrual | 12,814 | 11,274 |
| VAT payable | 2,182 | 3,303 |
| Payroll tax payable | 6,574 | 7,012 |
| Interest payable | 4,696 | 1,705 |
| Accruals related to capital expenditure | 69,471 | 10,894 |
| Housing cost payable | 25,224 | 12,608 |
| Other liabilities and accrued expenses | 16,844 | 9,418 |
| Total | 288,181 | 222,816 |
All current liabilities fall due in less than one year. The fair value of the current liabilities approximates the carrying amount due to their short-term nature.
\nThe increase in deferred revenues is disclosed in more detail in note 3.2 Revenue.
\nAccruals related to capital expenditure are related to investments in opened or to be opened clubs, to the extend that no invoice is received while construction work has already been completed. The increase of these accruals is a result of the high number of clubs that were opened in January 2024, for which all or most construction work was already completed at 31 December 2023, while no invoice was received.
\nThe increase in other lines in the table above are mostly directly related to the growth in members and clubs and for housing costs payable also due to increased energy and gas prices compared to one year ago.
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.
\nFor deferred revenues, reference is made to note 3.2 Revenue.
The Group\u2018s interest-bearing borrowings at 31 December 2023 and 31 December 2022, including the movements during 2023 and 2022, are summarised in the following tables:
\n| \u00a0 | \u00a0 | \u00a0 | Cash settled | \u00a0 | Other changes (non-cash) | \u00a0 | \u00a0 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | Balance as at 1 January 2023 | \u00a0 | New loans | Repayments | \u00a0 | Amortisation | Additions (lease liabilities) | COVID-19 rent credits | Accretion of interest | \u00a0 | Balance as at 31 December 2023 |
| Floating rate borrowings (non-current and current) | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | |
| Bank borrowings | 250,000 | \u00a0 | - | - | \u00a0 | - | - | - | - | \u00a0 | 250,000 |
| Drawn revolving credit facility | 210,000 | \u00a0 | 145,000 | - | \u00a0 | - | - | - | - | \u00a0 | 355,000 |
| GO-C facility | 13,333 | \u00a0 | - | (13,333) | \u00a0 | - | - | - | - | \u00a0 | - |
| Schuldschein | 10,000 | \u00a0 | - | - | \u00a0 | - | - | - | - | \u00a0 | 10,000 |
| Borrowing costs | (1,470) | \u00a0 | (3,505) | - | \u00a0 | 781 | - | - | - | \u00a0 | (4,194) |
| \u00a0 | 481,863 | \u00a0 | 141,495 | (13,333) | \u00a0 | 781 | - | - | - | \u00a0 | 610,806 |
| \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 | |
| Convertible bonds \u2013 liability component | 247,248 | \u00a0 | - | - | \u00a0 | - | - | - | 9,149 | \u00a0 | 256,397 |
| Schuldschein | 8,000 | \u00a0 | - | - | \u00a0 | - | - | - | - | \u00a0 | 8,000 |
| Lease liabilities | 1,481,539 | \u00a0 | - | (228,203) | \u00a0 | - | 365,209 | (526) | 41,293 | \u00a0 | 1,659,312 |
| \u00a0 | 1,736,787 | \u00a0 | - | (228,203) | \u00a0 | - | 365,209 | (526) | 50,442 | \u00a0 | 1,923,709 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | 2,218,650 | \u00a0 | 141,495 | (241,536) | \u00a0 | 781 | 365,209 | (526) | 50,442 | \u00a0 | 2,534,515 |
| \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 |
| Non-current lease liabilities | 1,265,086 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,405,291 |
| Non-current borrowings | 723,778 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 857,203 |
| Current lease liabilities | 216,453 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 254,021 |
| Current borrowings | 13,333 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 18,000 |
| \u00a0 | \u00a0 | \u00a0 | Cash settled | \u00a0 | Other changes (non-cash) | \u00a0 | \u00a0 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | Balance as at 1 January 2022 | \u00a0 | New loans | Repayments | \u00a0 | Amortisation | Additions (lease liabilities) | COVID-19 rent credits | Accretion of interest | \u00a0 | Balance as at 31 December 2022 |
| Floating rate borrowings (non-current) | \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 | \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 |
| Fixed rate borrowings and lease liabilities (non-current and current) | \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 | 1,923,115 | \u00a0 | 210,000 | (302,335) | \u00a0 | 715 | 348,330 | (2,415) | 41,240 | \u00a0 | 2,218,650 |
| Of which: | \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 | 1,265,086 |
| Non-current borrowings | 517,729 | \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 | 216,453 |
| Current borrowings | 100,227 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 13,333 |
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 on 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.
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Carrying amount of liability at 1 January | 247,248 | 238,581 |
| \u00a0 | \u00a0 | \u00a0 |
| Accrued interest | 13,704 | 13,222 |
| Interest paid | (4,555) | (4,555) |
| Carrying amount of liability at 31 December 2023 | 256,397 | 247,248 |
In June 2023, the Group successfully completed an amendment and extension of its existing facilities agreement, which is recognised as a modification with a prospective adjustment of the effective interest rate to reflect the new market rate and without recognising a modification gain or loss. Citibank was added as a new member of the syndicate, which already included Rabobank, ABN AMRO, ING Bank, BNP Paribas and KBC Bank.
\nThe amended and extended facilities agreement consists of a \u20ac250 million term loan and a \u20ac400 million revolving credit facility, totalling \u20ac650 million. In addition to the term loan and revolving credit facility, the agreement includes a new uncommitted revolving credit facility accordion of up to \u20ac150 million. In December 2023, the Company received commitment from its syndicate banks to draw \u20ac110 million from the accordion facility. At 31 December 2023, this amount had not yet been drawn. In January 2024, the Company received commitment from its syndicate banks to draw another \u20ac20 million. Basic-Fit can request the syndicated banks to make the remaining \u20ac20 million of the accordion facility available under the terms of the senior facility agreement, but the amount is not yet committed. Furthermore, in December 2023, the Company signed an agreement with Banco Santander for a \u20ac30 million uncommitted revolving credit facility. At 31 December 2023 no amount was drawn.
\nThe maturities of both the term loan and revolving credit facility have been extended to June 2027, with the option to request further extensions of one year in both 2024 and 2025, ultimately to 2029. The margins in the ratchet on both facilities have been increased by 25 basis points, reflecting the lending environment at the moment of the amendment and extension of the facilities agreement.
\nAs at 31 December 2023, an amount of \u20ac11.0 million (31 December 2022: \u20ac10.1 million) of the revolving credit facility including the committed part of the accordion of \u20ac510 million (31 December 2022: \u20ac320 million) had been used for bank guarantees and \u20ac355 million (31 December 2022: \u20ac210 million) had been drawn in cash.
\nThe interest is variable and based on the three-month Euribor rate plus a margin that depends on certain leverage covenants (Euribor plus margin stood at 6.1% as at 31 December 2023 and 4.4% as at 31 December 2022). The term loan and RCF are unsecured.
\nIn May 2020, the Company entered into a \u20ac60 million GO-C facility agreement, repayable quarterly in a straight line over two years, after an initial one-year grace period. The last repayment was made in May 2023.
\nIn October 2019, Basic-Fit completed a Schuldschein issuance in euro-denominated tranches. As at 31 December 2023, the outstanding amount was \u20ac18.0 million (2022: \u20ac18.0 million). For an amount of \u20ac8.0 million, the interest is fixed at 1.55% (2022: 1.55%) and for the remaining part, the interest is variable and based on the Euribor rate plus a margin, together 5.68% at 31 December 2023 (2022: 3.45%). This loan is unsecured. As at 31 December 2023, the total outstanding amount is classified as current borrowings as repayment must be made within 12 months.
\nThe carrying amount of the borrowings is presented net of finance costs (2023: \u20ac4.2 million; 2022: \u20ac1.5 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. The increase in the carrying amount of the borrowing costs relates to the refinancing in June 2023 and the fee related to the accordion commitment in December 2023.
\nThis loan was repayable in quarterly instalments of \u20ac15 thousand. The interest rate was 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.
\nBorrowings 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.
\nThe 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.
\nReference 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.
\nThe 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.
\nAs a result of the Group\u2019s prepayment policy, any account receivables balances are automatically past due.
\nAn ageing analysis of the Group\u2019s trade and other receivables that are past due (including provision for expected credit losses) is as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Overdue <30 days | 11,610 | 19,265 |
| Overdue 31-60 days | 3,513 | 2,470 |
| Overdue 61-90 days | 5,399 | 3,632 |
| Overdue >90 days | 20,827 | 10,279 |
| Balance incl. provision | 41,349 | 35,646 |
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 increase in economic uncertainty in 2022 and 2023, 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 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 2023, the provision stood at \u20ac26.7 million (2022: \u20ac18.4 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, BNP Paribas and Citibank. 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 the intra-month cash needs on a daily basis by assessing the cash inflows and outflows. In direct response to the ongoing economic uncertainty as of 2022, management intensified the monitoring of cash needs and frequently updated the forecasts based on the latest available information and expectations.
\nThe revolving credit facility of \u20ac510 million (including committed part of the accordion facility) has a maturity date of June 2027, with the option to request further extensions of one year in 2024 and 2025, ultimately to 2029 (2022: \u20ac320 million with a maturity date of June 2025). Basic-Fit can request the syndicated banks to make the remaining \u20ac40 million of the additional accordion facility available under the terms of the senior facilities agreement1, 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).
\nThe table below provides an overview of all committed and undrawn facilities as at 31 December 2023:
\n| (In \u20ac\u00a0millions) | Facility (committed) | Undrawn | Covenant applicable |
|---|---|---|---|
| Term loan | 250.0 | - | Yes |
| Revolving credit facility1 | 510.0 | 144.0 | Yes |
| Schuldschein | 18.0 | - | Yes |
| \u00a0 | 778.0 | 144.0 | \u00a0 |
The following table is an analysis of 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.
\nThe 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.
\nContractual maturities of financial liabilities (continued)
\n| \u00a0 | 2023 | ||||||
|---|---|---|---|---|---|---|---|
| \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 | 315,089 | - | 324,200 | 256,397 |
| Borrowings1 | 19,275 | 37,398 | 37,981 | 661,972 | - | 756,626 | 623,000 |
| Lease liabilities | 130,693 | 127,302 | 254,514 | 686,538 | 676,133 | 1,875,180 | 1,659,312 |
| Trade payables | 120,488 | - | - | - | - | 120,488 | 120,488 |
| Total non-derivatives | 272,734 | 166,978 | 297,050 | 1,663,599 | 676,133 | 3,076,494 | 2,659,197 |
| \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 |
Foreign exchange risk
\nThe 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
\nfluctuations.
Price risk
\nThe Group has limited exposure to price risk. The Group's main exposure is to fluctuations in energy costs. To reduce the energy costs per club, Basic-Fit established an energy department to scrutinise the energy consumption and identify where further efficiencies can be achieved. In 2023, Basic-Fit was able to sign more favourable energy contracts compared to the contracts in place for 2022 and 2023. In France, Basic-Fit has fixed price energy contracts for nearly 100% of its energy consumption in 2024 and 2025. In Belgium, Basic-Fit has fixed price energy contacts for 40% of the gas consumption and 100% of the electricity consumption in 2024. In the Netherlands and Germany, Basic-Fit has fixed price energy contract for 100% of the energy consumption in 2024. In Spain, Basic-Fit has no fixed price energy contracts. The fixed price contracts are executory contracts and not financial instruments/derivatives.
Interest rate risk and cash flow risk
\nThe Group\u2019s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. At the end of 2023, 41% of the interest exposure (excluding lease liabilities) was hedged using a combination of floating-to-fixed interest rate swaps and extendible swaps comprised of swaps and swaptions which are used to reduce the fixed interest of the swap. The interest rate risk is hedged for the period of the swap agreement. As the swaption can be exercised at the discretion of the fixed receivers, the swaptions of the extendable swaps are only expected to be exercised when the market rates at the expiration date are lower than the fixed rate. When market rates are higher than the fixed rates of the extendable swaps at the expiration dates, the swaptions are not expected to be exercised and the swaps will terminate. The swaptions will be cash settled at fair value on the expiration date. 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. Including the convertible bond, 60% of our interest-bearing debt has a fixed interest rate.
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:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Variable rate borrowings | 615,000 | 483,333 |
| Fixed interest rate borrowings (including lease liabilities) | 1,923,709 | 1,736,787 |
| Total | 2,538,709 | 2,220,120 |
At 31 December 2023, swaps in place cover approximately 40.7% (2022: 42.4%) of the variable loan principal outstanding.
\nThe contracts require settlement of net interest receivable or payable every 90 days.
\nAt 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:
\n| \u00a0 | 31 December 2023 | \u00a0 | 31 December 2022 | ||||
|---|---|---|---|---|---|---|---|
| \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 | 6.11% | 615,000 | 24.22% | \u00a0 | 4.36% | 483,333 | 21.77% |
| Interest rate swaps (notional amount) | \u00a0 | (250,000) | \u00a0 | \u00a0 | \u00a0 | (205,000) | \u00a0 |
| Net exposure to cash flow interest rate risk | \u00a0 | 365,000 | 14.38% | \u00a0 | \u00a0 | 278,333 | 12.54% |
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 and swaption (2023 only):
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Gain (loss) recognised in profit or loss | (6,531) | 3,705 |
| Reclassified from other comprehensive income to profit or loss | - | - |
According to interest rate sensitivity analyses performed for the years ending 31 December 2023 and 2022, the impact on the consolidated statement of profit or loss (post-tax) due to upward or downward movements in the interest rates of 1% for the non-derivative financial instruments1 were as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Increase by 100 basis points (non-derivative financial instruments) | (2,708) | (3,586) |
| Decrease by 100 basis points (non-derivative financial instruments) | 2,708 | 3,586 |
There was no impact on components of equity due to upward or downward movements in the interest rates.
\nThe 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.
\nManagement 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:
\n| Assets | 2023 | \u00a0 | 2022 | ||
|---|---|---|---|---|---|
| \u00a0 | Derivatives at FVPL1 | Loans and receivables | \u00a0 | Derivatives at FVPL1 | Loans and receivables |
| Loan receivable | - | - | \u00a0 | - | 29 |
| Derivative financial instruments (current) | 1,769 | - | \u00a0 | 2,045 | - |
| Trade and other receivables excluding prepayments | - | 41,349 | \u00a0 | - | 35,646 |
| Cash and cash equivalents | - | 70,934 | \u00a0 | - | 43,510 |
| Total | 1,769 | 112,283 | \u00a0 | 2,045 | 79,185 |
| Liabilities | 2023 | \u00a0 | 2022 | ||
|---|---|---|---|---|---|
| \u00a0 | Derivatives at FVPL1 | Other financial liabilities at amortised cost | \u00a0 | Derivatives at FVPL1 | Other financial liabilities at amortised cost |
| Borrowings (excluding lease liabilities) | - | 875,203 | \u00a0 | - | 737,111 |
| Lease liabilities | - | 1,659,312 | \u00a0 | - | 1,481,539 |
| Derivative financial instruments | 6,255 | - | \u00a0 | - | - |
| Trade and other payables excluding non-financial liabilities | - | 120,488 | \u00a0 | - | 149,167 |
| Total | 6,255 | 2,655,003 | \u00a0 | - | 2,367,817 |
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.
\nFor all years presented, the Group only held financial instruments that classify as Level 2 fair values, in accordance with the fair value hierarchy as described in IFRS 13. 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).
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.
\nIn 2023, new hedges were put in place for a total notional amount of \u20ac250 million to replace the hedges that expired in May 2023 (notional \u20ac205 million). In order to optimise the Group\u2019s interest rate structure, the company used a mix of plain vanilla swaps (\u20ac100 million) and extendible swaps, comprised of swaps and swaptions (\u20ac150 million). A swaption is sold by the company to reduce the cost of the swap, making use of the inverted swap curve at the time. The swaption can be used to extend the swap at the agreed fixed rate at the discretion of the fixed rate receiver at the time of the expiration date of the swap. This will most likely only be done when the fixed rate is above the market rate at that time. The fixed rate receiver also has the option of settling the swaption in cash. If the market rate is above the fixed rate of the swaption at the expiration date, the fixed rate receiver will most likely not exercise the swaption.
\nThis combination of instruments effectively converts part of the company's variable rate debt into a fixed rate debt, providing more stability in interest payments and mitigating the impact of interest rate fluctuations. The interest rate swaps swap quarterly interest payments, with the Group paying a fixed interest and receiving interest based on the three-month Euribor rate.
\nThe financial instruments are held at fair value with no hedge accounting applied. The fair value of these new financial instruments per 31 December 2023 are categorised below. The sensitivity analysis is pre-tax and based on the direct fair value movement at year end. The impact on the Group\u2019s equity is nil.
\n| \u00a0 | Notional amount | Inception | Maturity date | Weighted average fixed rate | Fair value 2023 | Increase by 100 bps | Decrease by 100 bps |
|---|---|---|---|---|---|---|---|
| Interest rate swaps | 250,000 | Q2-2025 to Q4-2028 | June 2025 | 2.637% | (715) | 6,063 | (6,328) |
| Swaptions | 150,000 | Q2-20251 | November 2025 | 2.632% | (3,771) | 2,362 | (3,790) |
| Total | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (4,486) | 8,425 | (10,118) |
The movements in 2023 and 2022 arising from cash flows and non-cash changes in the Group\u2018s derivative financial instruments are summarised in the following table:
\n| \u00a0 | \u00a0 | Cash flows | \u00a0 | Non-cash changes | \u00a0 |
|---|---|---|---|---|---|
| \u00a0 | Balance as at 1 January1 | Repayments | \u00a0 | Fair value changes through P&L2 | Balance as at 31 December3 |
| 2023 | 2,045 | - | \u00a0 | (6,531) | (4,486) |
| 2022 | (1,660) | - | \u00a0 | 3,705 | 2,045 |
As at 31 December 2023 and 31 December 2022, 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 2023 and 31 December 2022, the fair values of other long-term financial assets (security deposits) were not materially different from the carrying amounts.
As at 31 December 2023 and 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 2023, the fair values of the convertible bonds amounted to \u20ac244 million (carrying amount \u20ac256 million). As at 31 December 2022, the fair values of the convertible bonds amounted to \u20ac224 million (carrying amount \u20ac247 million).
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.
\nPurchases 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.
\nSubsequent 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.
\nThe Group\u2019s financial assets at amortised cost include trade receivables.
\nFinancial 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.
\nThe Group\u2019s financial liabilities include trade and other payables, loans and borrowings, including bank overdrafts and derivative financial instruments.
\nSubsequent 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.
\nDerecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
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 and swaptions 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 2023 and 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.
\nFair 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.
\nThe 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.
\nA 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.
\nThe 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.
\nAll 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.
Significant judgement is required in determining the expected credit loss allowance. For this purpose, any change in the risk profile of members following the ongoing economic uncertainty prevailing since 2022 should be considered.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Finance income: | \u00a0 | \u00a0 |
| Other interest income | 1 | 2 |
| Total finance income | 1 | 2 |
| \u00a0 | \u00a0 | \u00a0 |
| Finance costs: | \u00a0 | \u00a0 |
| Interest on convertible bonds | (13,705) | (13,222) |
| Interest on external debt and borrowings | (30,120) | (15,384) |
| Lease liabilities interest | (41,293) | (32,573) |
| Valuation difference derivative financial instruments | (6,531) | 3,705 |
| Other finance costs (including waiver fees) | (778) | (1,161) |
| Total finance costs | (92,427) | (58,635) |
| \u00a0 | \u00a0 | \u00a0 |
| Total finance costs - net | (92,426) | (58,633) |
Valuation differences of derivative financial instruments are the result of increasing interest rates in 2023 and changes in the expected interest rate developments on 31 December 2023 compared to 31 December 2022.
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.
Movements in the Group provision for impairment of receivables were as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| As at 1 January | (18,436) | (18,594) |
| Provision for impairment recognised during the year | (36,324) | (14,647) |
| Receivables written off during the year as uncollectable | 28,065 | 14,805 |
| As at 31 December | (26,695) | (18,436) |
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.
\nThe 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.
\nThe 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.
\nAs a result of the Group\u2019s prepayment policy, any account receivables balances are automatically past due.
\nAn ageing analysis of the Group\u2019s trade and other receivables that are past due (including provision for expected credit losses) is as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Overdue <30 days | 11,610 | 19,265 |
| Overdue 31-60 days | 3,513 | 2,470 |
| Overdue 61-90 days | 5,399 | 3,632 |
| Overdue >90 days | 20,827 | 10,279 |
| Balance incl. provision | 41,349 | 35,646 |
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 increase in economic uncertainty in 2022 and 2023, 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 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 2023, the provision stood at \u20ac26.7 million (2022: \u20ac18.4 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, BNP Paribas and Citibank. No collateral is held for the aforementioned liquid assets.
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.
Significant judgement is required in determining the expected credit loss allowance. For this purpose, any change in the risk profile of members following the ongoing economic uncertainty prevailing since 2022 should be considered.
Movements in the Group provision for impairment of receivables were as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| As at 1 January | (18,436) | (18,594) |
| Provision for impairment recognised during the year | (36,324) | (14,647) |
| Receivables written off during the year as uncollectable | 28,065 | 14,805 |
| As at 31 December | (26,695) | (18,436) |
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.
\nThe 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 composition of cash and cash equivalents was as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Cash in bank and on hand | 68,067 | 42,165 |
| Cash in transit | 2,867 | 1,345 |
| Total | 70,934 | 43,510 |
All cash and cash equivalents are available for immediate use by the Group, except for an amount of \u20ac205 thousand (2022: \u20ac205 thousand) related to bank guarantees.
In the statement of cash flows, cash and cash equivalents include cash on hand, deposits held at call with financial institutions and bank overdrafts (if any). In the statement of financial position, bank overdrafts are shown within borrowings in current liabilities.
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.
\nThe 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.
\nAs a result of the Group\u2019s prepayment policy, any account receivables balances are automatically past due.
\nAn ageing analysis of the Group\u2019s trade and other receivables that are past due (including provision for expected credit losses) is as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Overdue <30 days | 11,610 | 19,265 |
| Overdue 31-60 days | 3,513 | 2,470 |
| Overdue 61-90 days | 5,399 | 3,632 |
| Overdue >90 days | 20,827 | 10,279 |
| Balance incl. provision | 41,349 | 35,646 |
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 increase in economic uncertainty in 2022 and 2023, 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 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 2023, the provision stood at \u20ac26.7 million (2022: \u20ac18.4 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, BNP Paribas and Citibank. 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 the intra-month cash needs on a daily basis by assessing the cash inflows and outflows. In direct response to the ongoing economic uncertainty as of 2022, management intensified the monitoring of cash needs and frequently updated the forecasts based on the latest available information and expectations.
\nThe revolving credit facility of \u20ac510 million (including committed part of the accordion facility) has a maturity date of June 2027, with the option to request further extensions of one year in 2024 and 2025, ultimately to 2029 (2022: \u20ac320 million with a maturity date of June 2025). Basic-Fit can request the syndicated banks to make the remaining \u20ac40 million of the additional accordion facility available under the terms of the senior facilities agreement1, 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).
\nThe table below provides an overview of all committed and undrawn facilities as at 31 December 2023:
\n| (In \u20ac\u00a0millions) | Facility (committed) | Undrawn | Covenant applicable |
|---|---|---|---|
| Term loan | 250.0 | - | Yes |
| Revolving credit facility1 | 510.0 | 144.0 | Yes |
| Schuldschein | 18.0 | - | Yes |
| \u00a0 | 778.0 | 144.0 | \u00a0 |
The following table is an analysis of 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.
\nThe 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.
\nContractual maturities of financial liabilities (continued)
\n| \u00a0 | 2023 | ||||||
|---|---|---|---|---|---|---|---|
| \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 | 315,089 | - | 324,200 | 256,397 |
| Borrowings1 | 19,275 | 37,398 | 37,981 | 661,972 | - | 756,626 | 623,000 |
| Lease liabilities | 130,693 | 127,302 | 254,514 | 686,538 | 676,133 | 1,875,180 | 1,659,312 |
| Trade payables | 120,488 | - | - | - | - | 120,488 | 120,488 |
| Total non-derivatives | 272,734 | 166,978 | 297,050 | 1,663,599 | 676,133 | 3,076,494 | 2,659,197 |
| \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 |
Foreign exchange risk
\nThe 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
\nfluctuations.
Price risk
\nThe Group has limited exposure to price risk. The Group's main exposure is to fluctuations in energy costs. To reduce the energy costs per club, Basic-Fit established an energy department to scrutinise the energy consumption and identify where further efficiencies can be achieved. In 2023, Basic-Fit was able to sign more favourable energy contracts compared to the contracts in place for 2022 and 2023. In France, Basic-Fit has fixed price energy contracts for nearly 100% of its energy consumption in 2024 and 2025. In Belgium, Basic-Fit has fixed price energy contacts for 40% of the gas consumption and 100% of the electricity consumption in 2024. In the Netherlands and Germany, Basic-Fit has fixed price energy contract for 100% of the energy consumption in 2024. In Spain, Basic-Fit has no fixed price energy contracts. The fixed price contracts are executory contracts and not financial instruments/derivatives.
Interest rate risk and cash flow risk
\nThe Group\u2019s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. At the end of 2023, 41% of the interest exposure (excluding lease liabilities) was hedged using a combination of floating-to-fixed interest rate swaps and extendible swaps comprised of swaps and swaptions which are used to reduce the fixed interest of the swap. The interest rate risk is hedged for the period of the swap agreement. As the swaption can be exercised at the discretion of the fixed receivers, the swaptions of the extendable swaps are only expected to be exercised when the market rates at the expiration date are lower than the fixed rate. When market rates are higher than the fixed rates of the extendable swaps at the expiration dates, the swaptions are not expected to be exercised and the swaps will terminate. The swaptions will be cash settled at fair value on the expiration date. 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. Including the convertible bond, 60% of our interest-bearing debt has a fixed interest rate.
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:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Variable rate borrowings | 615,000 | 483,333 |
| Fixed interest rate borrowings (including lease liabilities) | 1,923,709 | 1,736,787 |
| Total | 2,538,709 | 2,220,120 |
At 31 December 2023, swaps in place cover approximately 40.7% (2022: 42.4%) of the variable loan principal outstanding.
\nThe contracts require settlement of net interest receivable or payable every 90 days.
\nAt 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:
\n| \u00a0 | 31 December 2023 | \u00a0 | 31 December 2022 | ||||
|---|---|---|---|---|---|---|---|
| \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 | 6.11% | 615,000 | 24.22% | \u00a0 | 4.36% | 483,333 | 21.77% |
| Interest rate swaps (notional amount) | \u00a0 | (250,000) | \u00a0 | \u00a0 | \u00a0 | (205,000) | \u00a0 |
| Net exposure to cash flow interest rate risk | \u00a0 | 365,000 | 14.38% | \u00a0 | \u00a0 | 278,333 | 12.54% |
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 and swaption (2023 only):
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Gain (loss) recognised in profit or loss | (6,531) | 3,705 |
| Reclassified from other comprehensive income to profit or loss | - | - |
According to interest rate sensitivity analyses performed for the years ending 31 December 2023 and 2022, the impact on the consolidated statement of profit or loss (post-tax) due to upward or downward movements in the interest rates of 1% for the non-derivative financial instruments1 were as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Increase by 100 basis points (non-derivative financial instruments) | (2,708) | (3,586) |
| Decrease by 100 basis points (non-derivative financial instruments) | 2,708 | 3,586 |
There was no impact on components of equity due to upward or downward movements in the interest rates.
\nThe 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.
\nManagement 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.
Derivatives are classified as Level 2 valuation, in accordance with the fair value hierarchy as described in IFRS 13.
\nIn 2023, new hedges were put in place for a total notional amount of \u20ac250 million to replace the hedges that expired in May 2023 (notional \u20ac205 million). In order to optimise the Group\u2019s interest rate structure, the company used a mix of plain vanilla swaps (\u20ac100 million) and extendible swaps, comprised of swaps and swaptions (\u20ac150 million). A swaption is sold by the company to reduce the cost of the swap, making use of the inverted swap curve at the time. The swaption can be used to extend the swap at the agreed fixed rate at the discretion of the fixed rate receiver at the time of the expiration date of the swap. This will most likely only be done when the fixed rate is above the market rate at that time. The fixed rate receiver also has the option of settling the swaption in cash. If the market rate is above the fixed rate of the swaption at the expiration date, the fixed rate receiver will most likely not exercise the swaption.
\nThis combination of instruments effectively converts part of the company's variable rate debt into a fixed rate debt, providing more stability in interest payments and mitigating the impact of interest rate fluctuations. The interest rate swaps swap quarterly interest payments, with the Group paying a fixed interest and receiving interest based on the three-month Euribor rate.
\nThe financial instruments are held at fair value with no hedge accounting applied. The fair value of these new financial instruments per 31 December 2023 are categorised below. The sensitivity analysis is pre-tax and based on the direct fair value movement at year end. The impact on the Group\u2019s equity is nil.
\n| \u00a0 | Notional amount | Inception | Maturity date | Weighted average fixed rate | Fair value 2023 | Increase by 100 bps | Decrease by 100 bps |
|---|---|---|---|---|---|---|---|
| Interest rate swaps | 250,000 | Q2-2025 to Q4-2028 | June 2025 | 2.637% | (715) | 6,063 | (6,328) |
| Swaptions | 150,000 | Q2-20251 | November 2025 | 2.632% | (3,771) | 2,362 | (3,790) |
| Total | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (4,486) | 8,425 | (10,118) |
The movements in 2023 and 2022 arising from cash flows and non-cash changes in the Group\u2018s derivative financial instruments are summarised in the following table:
\n| \u00a0 | \u00a0 | Cash flows | \u00a0 | Non-cash changes | \u00a0 |
|---|---|---|---|---|---|
| \u00a0 | Balance as at 1 January1 | Repayments | \u00a0 | Fair value changes through P&L2 | Balance as at 31 December3 |
| 2023 | 2,045 | - | \u00a0 | (6,531) | (4,486) |
| 2022 | (1,660) | - | \u00a0 | 3,705 | 2,045 |
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.
Significant judgement is required in determining the expected credit loss allowance. For this purpose, any change in the risk profile of members following the ongoing economic uncertainty prevailing since 2022 should be considered.
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.
\nTrade 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.
\nReference 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.
In the statement of cash flows, cash and cash equivalents include cash on hand, deposits held at call with financial institutions and bank overdrafts (if any). In the statement of financial position, bank overdrafts are shown within borrowings in current liabilities.
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.
\nPurchases 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.
\nSubsequent 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.
\nThe Group\u2019s financial assets at amortised cost include trade receivables.
\nFinancial 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 subsequent measurement
The Group uses interest rate swaps and swaptions 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 2023 and 31 December 2022. Therefore, all changes related to these financial instruments will be recognised in profit or loss.
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.
\nTrade 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.
\nReference 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.
In the statement of cash flows, cash and cash equivalents include cash on hand, deposits held at call with financial institutions and bank overdrafts (if any). In the statement of financial position, bank overdrafts are shown within borrowings in current liabilities.
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.
\nFor deferred revenues, reference is made to note 3.2 Revenue.
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.
\nBorrowings 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.
\nThe 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.
\nReference 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.
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.
\nPurchases 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.
\nSubsequent 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.
\nThe Group\u2019s financial assets at amortised cost include trade receivables.
\nFinancial 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.
\nThe Group\u2019s financial liabilities include trade and other payables, loans and borrowings, including bank overdrafts and derivative financial instruments.
\nSubsequent 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.
\nDerecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
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 and swaptions 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 2023 and 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.
\nFair 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.
\nThe 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.
\nA 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.
\nThe 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.
\nAll 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.
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.
\nTrade 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.
\nReference 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.
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.
\nPurchases 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.
\nImpairment 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.
The composition of cash and cash equivalents was as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Cash in bank and on hand | 68,067 | 42,165 |
| Cash in transit | 2,867 | 1,345 |
| Total | 70,934 | 43,510 |
All cash and cash equivalents are available for immediate use by the Group, except for an amount of \u20ac205 thousand (2022: \u20ac205 thousand) related to bank guarantees.
In the statement of cash flows, cash and cash equivalents include cash on hand, deposits held at call with financial institutions and bank overdrafts (if any). In the statement of financial position, bank overdrafts are shown within borrowings in current liabilities.
All cash and cash equivalents are available for immediate use by the Group, except for an amount of \u20ac205 thousand (2022: \u20ac205 thousand) related to bank guarantees.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRestrictedCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "ixv-597": { "value": "\nIn the statement of cash flows, cash and cash equivalents include cash on hand, deposits held at call with financial institutions and bank overdrafts (if any). In the statement of financial position, bank overdrafts are shown within borrowings in current liabilities.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Trade payables | 120,488 | 149,167 |
| Deferred revenues | 29,888 | 17,435 |
| Holiday allowance and vacation days accrual | 12,814 | 11,274 |
| VAT payable | 2,182 | 3,303 |
| Payroll tax payable | 6,574 | 7,012 |
| Interest payable | 4,696 | 1,705 |
| Accruals related to capital expenditure | 69,471 | 10,894 |
| Housing cost payable | 25,224 | 12,608 |
| Other liabilities and accrued expenses | 16,844 | 9,418 |
| Total | 288,181 | 222,816 |
Accruals related to capital expenditure are related to investments in opened or to be opened clubs, to the extend that no invoice is received while construction work has already been completed. The increase of these accruals is a result of the high number of clubs that were opened in January 2024, for which all or most construction work was already completed at 31 December 2023, while no invoice was received.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "ixv-607": { "value": "\nThese 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.
\nFor deferred revenues, reference is made to note 3.2 Revenue.
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.
\nBorrowings 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.
\nThe 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.
\nReference 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.
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 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.
\nThe Group\u2019s financial liabilities include trade and other payables, loans and borrowings, including bank overdrafts and derivative financial instruments.
\nSubsequent 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.
\nDerecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
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 and swaptions 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 2023 and 31 December 2022. Therefore, all changes related to these financial instruments will be recognised in profit or loss.
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.
\nFor deferred revenues, reference is made to note 3.2 Revenue.
The authorised share capital of the Company amounts to \u20ac9.0 million and is divided into 150,000,000 shares with a nominal value of \u20ac0.06. The subscribed share capital as at 31 December 2023 amounted to \u20ac3.96 million (2022: \u20ac3.96 million) and was divided into 66,000,000 shares fully paid-up with a nominal value per share of \u20ac0.06. There were no movements in authorised and subscribed share capital in the reporting periods.
As at 31 December 2023, the share premium amounted to \u20ac690.5 million. There were no movements in the reporting periods.
In 2023, the Company purchased 6,108 shares for a total amount of \u20ac221 thousand to meet obligations related to the equity-settled share-based compensation plans. For 2022, this amounted to 22,263 shares for a total amount of \u20ac878 thousand.
\nThe movement in the equity settled share-based reserve over the past two years was as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| As at 1 January | 880 | 1,937 |
| Share-based payments expense during the year | 2,050 | 28 |
| Exercised share-based payments during the year | (183) | (1,085) |
| As at 31 December | 2,747 | 880 |
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.
\nThe equity component of the convertible bonds reserve amounted to \u20ac48.7 million, is recognised net of tax and relates to the convertible bonds issued by the Group in June 2021. There were no movements in the periods 2023 and 2022.
\nReference is made to note 6.3 Borrowings and note 6.5 Financial instruments for the disclosure and accounting policy for the convertible bond.
The losses for the respective periods 2023 and 2022 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'.
On 17 June 2021, the Company issued convertible bonds due on 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.
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Carrying amount of liability at 1 January | 247,248 | 238,581 |
| \u00a0 | \u00a0 | \u00a0 |
| Accrued interest | 13,704 | 13,222 |
| Interest paid | (4,555) | (4,555) |
| Carrying amount of liability at 31 December 2023 | 256,397 | 247,248 |
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.
In 2023, the Company purchased 6,108 shares for a total amount of \u20ac221 thousand to meet obligations related to the equity-settled share-based compensation plans. For 2022, this amounted to 22,263 shares for a total amount of \u20ac878 thousand.
\nThe movement in the equity settled share-based reserve over the past two years was as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| As at 1 January | 880 | 1,937 |
| Share-based payments expense during the year | 2,050 | 28 |
| Exercised share-based payments during the year | (183) | (1,085) |
| As at 31 December | 2,747 | 880 |
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.
\nThe equity component of the convertible bonds reserve amounted to \u20ac48.7 million, is recognised net of tax and relates to the convertible bonds issued by the Group in June 2021. There were no movements in the periods 2023 and 2022.
\nReference is made to note 6.3 Borrowings and note 6.5 Financial instruments for the disclosure and accounting policy for the convertible bond.
The losses for the respective periods 2023 and 2022 have been included in retained earnings.
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'.
On 17 June 2021, the Company issued convertible bonds due on 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.
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Carrying amount of liability at 1 January | 247,248 | 238,581 |
| \u00a0 | \u00a0 | \u00a0 |
| Accrued interest | 13,704 | 13,222 |
| Interest paid | (4,555) | (4,555) |
| Carrying amount of liability at 31 December 2023 | 256,397 | 247,248 |
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.
The authorised share capital of the Company amounts to \u20ac9.0 million and is divided into 150,000,000 shares with a nominal value of \u20ac0.06. The subscribed share capital as at 31 December 2023 amounted to \u20ac3.96 million (2022: \u20ac3.96 million) and was divided into 66,000,000 shares fully paid-up with a nominal value per share of \u20ac0.06. There were no movements in authorised and subscribed share capital in the reporting periods.
Ordinary shares are classified as share capital.
In 2023, the Company purchased 6,108 shares for a total amount of \u20ac221 thousand to meet obligations related to the equity-settled share-based compensation plans. For 2022, this amounted to 22,263 shares for a total amount of \u20ac878 thousand.
\nTreasury 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.
Ordinary shares are classified as share capital.
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.
The calculation of basic and diluted earnings per share is based on the following data:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Earnings | \u00a0 | \u00a0 |
| Profit (loss) for the period attributable to the ordinary equity holders of the Company | (2,679) | (3,687) |
| Interest on convertible bonds (net of tax) | 10,169 | 9,811 |
| Profit attributable to ordinary equity holders of the parent adjusted for the effect of dilution | 7,490 | 6,124 |
| \u00a0 | \u00a0 | \u00a0 |
| Number of shares | \u00a0 | \u00a0 |
| Weighted average number of ordinary shares for basic earnings per share | 66,000,000 | 66,000,000 |
| Effect of dilutive potential ordinary shares | 5,999,012 | 5,999,012 |
| Weighted average number of ordinary shares for diluted earnings per share | 71,999,012 | 71,999,012 |
| \u00a0 | \u00a0 | \u00a0 |
| Earnings per share (in \u20ac) | \u00a0 | \u00a0 |
| Basic earnings per share | (0.04) | (0.06) |
| Diluted earnings per share | (0.04) | (0.06) |
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 for both 2023 and 2022. These shares are related to convertible bonds.
\nThere 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.
\nDiluted 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.
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.
\nDiluted 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 2023 and 31 December 2022, including the movements during 2023 and 2022, are summarised in the following tables:
\n| \u00a0 | \u00a0 | \u00a0 | Cash settled | \u00a0 | Other changes (non-cash) | \u00a0 | \u00a0 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | Balance as at 1 January 2023 | \u00a0 | New loans | Repayments | \u00a0 | Amortisation | Additions (lease liabilities) | COVID-19 rent credits | Accretion of interest | \u00a0 | Balance as at 31 December 2023 |
| Floating rate borrowings (non-current and current) | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | |
| Bank borrowings | 250,000 | \u00a0 | - | - | \u00a0 | - | - | - | - | \u00a0 | 250,000 |
| Drawn revolving credit facility | 210,000 | \u00a0 | 145,000 | - | \u00a0 | - | - | - | - | \u00a0 | 355,000 |
| GO-C facility | 13,333 | \u00a0 | - | (13,333) | \u00a0 | - | - | - | - | \u00a0 | - |
| Schuldschein | 10,000 | \u00a0 | - | - | \u00a0 | - | - | - | - | \u00a0 | 10,000 |
| Borrowing costs | (1,470) | \u00a0 | (3,505) | - | \u00a0 | 781 | - | - | - | \u00a0 | (4,194) |
| \u00a0 | 481,863 | \u00a0 | 141,495 | (13,333) | \u00a0 | 781 | - | - | - | \u00a0 | 610,806 |
| \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 | |
| Convertible bonds \u2013 liability component | 247,248 | \u00a0 | - | - | \u00a0 | - | - | - | 9,149 | \u00a0 | 256,397 |
| Schuldschein | 8,000 | \u00a0 | - | - | \u00a0 | - | - | - | - | \u00a0 | 8,000 |
| Lease liabilities | 1,481,539 | \u00a0 | - | (228,203) | \u00a0 | - | 365,209 | (526) | 41,293 | \u00a0 | 1,659,312 |
| \u00a0 | 1,736,787 | \u00a0 | - | (228,203) | \u00a0 | - | 365,209 | (526) | 50,442 | \u00a0 | 1,923,709 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | 2,218,650 | \u00a0 | 141,495 | (241,536) | \u00a0 | 781 | 365,209 | (526) | 50,442 | \u00a0 | 2,534,515 |
| \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 |
| Non-current lease liabilities | 1,265,086 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,405,291 |
| Non-current borrowings | 723,778 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 857,203 |
| Current lease liabilities | 216,453 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 254,021 |
| Current borrowings | 13,333 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 18,000 |
| \u00a0 | \u00a0 | \u00a0 | Cash settled | \u00a0 | Other changes (non-cash) | \u00a0 | \u00a0 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | Balance as at 1 January 2022 | \u00a0 | New loans | Repayments | \u00a0 | Amortisation | Additions (lease liabilities) | COVID-19 rent credits | Accretion of interest | \u00a0 | Balance as at 31 December 2022 |
| Floating rate borrowings (non-current) | \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 | \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 |
| Fixed rate borrowings and lease liabilities (non-current and current) | \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 | 1,923,115 | \u00a0 | 210,000 | (302,335) | \u00a0 | 715 | 348,330 | (2,415) | 41,240 | \u00a0 | 2,218,650 |
| Of which: | \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 | 1,265,086 |
| Non-current borrowings | 517,729 | \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 | 216,453 |
| Current borrowings | 100,227 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 13,333 |
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 on 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.
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Carrying amount of liability at 1 January | 247,248 | 238,581 |
| \u00a0 | \u00a0 | \u00a0 |
| Accrued interest | 13,704 | 13,222 |
| Interest paid | (4,555) | (4,555) |
| Carrying amount of liability at 31 December 2023 | 256,397 | 247,248 |
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.
\nBorrowings 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.
\nThe 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.
\nReference 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.
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.
\nThe Group\u2019s financial liabilities include trade and other payables, loans and borrowings, including bank overdrafts and derivative financial instruments.
\nSubsequent 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.
\nDerecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
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.
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.
\nBorrowings 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.
\nThe 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.
\nReference 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.
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 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.
\nThe Group\u2019s financial liabilities include trade and other payables, loans and borrowings, including bank overdrafts and derivative financial instruments.
\nSubsequent 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.
\nDerecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
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.
The following table is an analysis of 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.
\nThe 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.
\nContractual maturities of financial liabilities (continued)
\n| \u00a0 | 2023 | ||||||
|---|---|---|---|---|---|---|---|
| \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 | 315,089 | - | 324,200 | 256,397 |
| Borrowings1 | 19,275 | 37,398 | 37,981 | 661,972 | - | 756,626 | 623,000 |
| Lease liabilities | 130,693 | 127,302 | 254,514 | 686,538 | 676,133 | 1,875,180 | 1,659,312 |
| Trade payables | 120,488 | - | - | - | - | 120,488 | 120,488 |
| Total non-derivatives | 272,734 | 166,978 | 297,050 | 1,663,599 | 676,133 | 3,076,494 | 2,659,197 |
| \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 |
At 31 December 2023, swaps in place cover approximately 40.7% (2022: 42.4%) of the variable loan principal outstanding.
\nThe contracts require settlement of net interest receivable or payable every 90 days.
\nAt 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:
\n| \u00a0 | 31 December 2023 | \u00a0 | 31 December 2022 | ||||
|---|---|---|---|---|---|---|---|
| \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 | 6.11% | 615,000 | 24.22% | \u00a0 | 4.36% | 483,333 | 21.77% |
| Interest rate swaps (notional amount) | \u00a0 | (250,000) | \u00a0 | \u00a0 | \u00a0 | (205,000) | \u00a0 |
| Net exposure to cash flow interest rate risk | \u00a0 | 365,000 | 14.38% | \u00a0 | \u00a0 | 278,333 | 12.54% |
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 and swaption (2023 only):
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Gain (loss) recognised in profit or loss | (6,531) | 3,705 |
| Reclassified from other comprehensive income to profit or loss | - | - |
Financial instruments by category comprise the following:
\n| Assets | 2023 | \u00a0 | 2022 | ||
|---|---|---|---|---|---|
| \u00a0 | Derivatives at FVPL1 | Loans and receivables | \u00a0 | Derivatives at FVPL1 | Loans and receivables |
| Loan receivable | - | - | \u00a0 | - | 29 |
| Derivative financial instruments (current) | 1,769 | - | \u00a0 | 2,045 | - |
| Trade and other receivables excluding prepayments | - | 41,349 | \u00a0 | - | 35,646 |
| Cash and cash equivalents | - | 70,934 | \u00a0 | - | 43,510 |
| Total | 1,769 | 112,283 | \u00a0 | 2,045 | 79,185 |
| Liabilities | 2023 | \u00a0 | 2022 | ||
|---|---|---|---|---|---|
| \u00a0 | Derivatives at FVPL1 | Other financial liabilities at amortised cost | \u00a0 | Derivatives at FVPL1 | Other financial liabilities at amortised cost |
| Borrowings (excluding lease liabilities) | - | 875,203 | \u00a0 | - | 737,111 |
| Lease liabilities | - | 1,659,312 | \u00a0 | - | 1,481,539 |
| Derivative financial instruments | 6,255 | - | \u00a0 | - | - |
| Trade and other payables excluding non-financial liabilities | - | 120,488 | \u00a0 | - | 149,167 |
| Total | 6,255 | 2,655,003 | \u00a0 | - | 2,367,817 |
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.
\nFor all years presented, the Group only held financial instruments that classify as Level 2 fair values, in accordance with the fair value hierarchy as described in IFRS 13. 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.
\nIn 2023, new hedges were put in place for a total notional amount of \u20ac250 million to replace the hedges that expired in May 2023 (notional \u20ac205 million). In order to optimise the Group\u2019s interest rate structure, the company used a mix of plain vanilla swaps (\u20ac100 million) and extendible swaps, comprised of swaps and swaptions (\u20ac150 million). A swaption is sold by the company to reduce the cost of the swap, making use of the inverted swap curve at the time. The swaption can be used to extend the swap at the agreed fixed rate at the discretion of the fixed rate receiver at the time of the expiration date of the swap. This will most likely only be done when the fixed rate is above the market rate at that time. The fixed rate receiver also has the option of settling the swaption in cash. If the market rate is above the fixed rate of the swaption at the expiration date, the fixed rate receiver will most likely not exercise the swaption.
\nThis combination of instruments effectively converts part of the company's variable rate debt into a fixed rate debt, providing more stability in interest payments and mitigating the impact of interest rate fluctuations. The interest rate swaps swap quarterly interest payments, with the Group paying a fixed interest and receiving interest based on the three-month Euribor rate.
\nThe financial instruments are held at fair value with no hedge accounting applied. The fair value of these new financial instruments per 31 December 2023 are categorised below. The sensitivity analysis is pre-tax and based on the direct fair value movement at year end. The impact on the Group\u2019s equity is nil.
\n| \u00a0 | Notional amount | Inception | Maturity date | Weighted average fixed rate | Fair value 2023 | Increase by 100 bps | Decrease by 100 bps |
|---|---|---|---|---|---|---|---|
| Interest rate swaps | 250,000 | Q2-2025 to Q4-2028 | June 2025 | 2.637% | (715) | 6,063 | (6,328) |
| Swaptions | 150,000 | Q2-20251 | November 2025 | 2.632% | (3,771) | 2,362 | (3,790) |
| Total | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (4,486) | 8,425 | (10,118) |
The movements in 2023 and 2022 arising from cash flows and non-cash changes in the Group\u2018s derivative financial instruments are summarised in the following table:
\n| \u00a0 | \u00a0 | Cash flows | \u00a0 | Non-cash changes | \u00a0 |
|---|---|---|---|---|---|
| \u00a0 | Balance as at 1 January1 | Repayments | \u00a0 | Fair value changes through P&L2 | Balance as at 31 December3 |
| 2023 | 2,045 | - | \u00a0 | (6,531) | (4,486) |
| 2022 | (1,660) | - | \u00a0 | 3,705 | 2,045 |
Initial recognition and subsequent measurement
The Group uses interest rate swaps and swaptions 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 2023 and 31 December 2022. Therefore, all changes related to these financial instruments will be recognised in profit or loss.
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 the intra-month cash needs on a daily basis by assessing the cash inflows and outflows. In direct response to the ongoing economic uncertainty as of 2022, management intensified the monitoring of cash needs and frequently updated the forecasts based on the latest available information and expectations.
\nThe revolving credit facility of \u20ac510 million (including committed part of the accordion facility) has a maturity date of June 2027, with the option to request further extensions of one year in 2024 and 2025, ultimately to 2029 (2022: \u20ac320 million with a maturity date of June 2025). Basic-Fit can request the syndicated banks to make the remaining \u20ac40 million of the additional accordion facility available under the terms of the senior facilities agreement1, 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).
\nThe table below provides an overview of all committed and undrawn facilities as at 31 December 2023:
\n| (In \u20ac\u00a0millions) | Facility (committed) | Undrawn | Covenant applicable |
|---|---|---|---|
| Term loan | 250.0 | - | Yes |
| Revolving credit facility1 | 510.0 | 144.0 | Yes |
| Schuldschein | 18.0 | - | Yes |
| \u00a0 | 778.0 | 144.0 | \u00a0 |
The following table is an analysis of 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.
\nThe 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.
\nContractual maturities of financial liabilities (continued)
\n| \u00a0 | 2023 | ||||||
|---|---|---|---|---|---|---|---|
| \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 | 315,089 | - | 324,200 | 256,397 |
| Borrowings1 | 19,275 | 37,398 | 37,981 | 661,972 | - | 756,626 | 623,000 |
| Lease liabilities | 130,693 | 127,302 | 254,514 | 686,538 | 676,133 | 1,875,180 | 1,659,312 |
| Trade payables | 120,488 | - | - | - | - | 120,488 | 120,488 |
| Total non-derivatives | 272,734 | 166,978 | 297,050 | 1,663,599 | 676,133 | 3,076,494 | 2,659,197 |
| \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 |
Foreign exchange risk
\nThe 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
\nfluctuations.
Price risk
\nThe Group has limited exposure to price risk. The Group's main exposure is to fluctuations in energy costs. To reduce the energy costs per club, Basic-Fit established an energy department to scrutinise the energy consumption and identify where further efficiencies can be achieved. In 2023, Basic-Fit was able to sign more favourable energy contracts compared to the contracts in place for 2022 and 2023. In France, Basic-Fit has fixed price energy contracts for nearly 100% of its energy consumption in 2024 and 2025. In Belgium, Basic-Fit has fixed price energy contacts for 40% of the gas consumption and 100% of the electricity consumption in 2024. In the Netherlands and Germany, Basic-Fit has fixed price energy contract for 100% of the energy consumption in 2024. In Spain, Basic-Fit has no fixed price energy contracts. The fixed price contracts are executory contracts and not financial instruments/derivatives.
Interest rate risk and cash flow risk
\nThe Group\u2019s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. At the end of 2023, 41% of the interest exposure (excluding lease liabilities) was hedged using a combination of floating-to-fixed interest rate swaps and extendible swaps comprised of swaps and swaptions which are used to reduce the fixed interest of the swap. The interest rate risk is hedged for the period of the swap agreement. As the swaption can be exercised at the discretion of the fixed receivers, the swaptions of the extendable swaps are only expected to be exercised when the market rates at the expiration date are lower than the fixed rate. When market rates are higher than the fixed rates of the extendable swaps at the expiration dates, the swaptions are not expected to be exercised and the swaps will terminate. The swaptions will be cash settled at fair value on the expiration date. 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. Including the convertible bond, 60% of our interest-bearing debt has a fixed interest rate.
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:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Variable rate borrowings | 615,000 | 483,333 |
| Fixed interest rate borrowings (including lease liabilities) | 1,923,709 | 1,736,787 |
| Total | 2,538,709 | 2,220,120 |
Financial instruments by category comprise the following:
\n| Assets | 2023 | \u00a0 | 2022 | ||
|---|---|---|---|---|---|
| \u00a0 | Derivatives at FVPL1 | Loans and receivables | \u00a0 | Derivatives at FVPL1 | Loans and receivables |
| Loan receivable | - | - | \u00a0 | - | 29 |
| Derivative financial instruments (current) | 1,769 | - | \u00a0 | 2,045 | - |
| Trade and other receivables excluding prepayments | - | 41,349 | \u00a0 | - | 35,646 |
| Cash and cash equivalents | - | 70,934 | \u00a0 | - | 43,510 |
| Total | 1,769 | 112,283 | \u00a0 | 2,045 | 79,185 |
| Liabilities | 2023 | \u00a0 | 2022 | ||
|---|---|---|---|---|---|
| \u00a0 | Derivatives at FVPL1 | Other financial liabilities at amortised cost | \u00a0 | Derivatives at FVPL1 | Other financial liabilities at amortised cost |
| Borrowings (excluding lease liabilities) | - | 875,203 | \u00a0 | - | 737,111 |
| Lease liabilities | - | 1,659,312 | \u00a0 | - | 1,481,539 |
| Derivative financial instruments | 6,255 | - | \u00a0 | - | - |
| Trade and other payables excluding non-financial liabilities | - | 120,488 | \u00a0 | - | 149,167 |
| Total | 6,255 | 2,655,003 | \u00a0 | - | 2,367,817 |
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.
\nFor all years presented, the Group only held financial instruments that classify as Level 2 fair values, in accordance with the fair value hierarchy as described in IFRS 13. 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.
\nIn 2023, new hedges were put in place for a total notional amount of \u20ac250 million to replace the hedges that expired in May 2023 (notional \u20ac205 million). In order to optimise the Group\u2019s interest rate structure, the company used a mix of plain vanilla swaps (\u20ac100 million) and extendible swaps, comprised of swaps and swaptions (\u20ac150 million). A swaption is sold by the company to reduce the cost of the swap, making use of the inverted swap curve at the time. The swaption can be used to extend the swap at the agreed fixed rate at the discretion of the fixed rate receiver at the time of the expiration date of the swap. This will most likely only be done when the fixed rate is above the market rate at that time. The fixed rate receiver also has the option of settling the swaption in cash. If the market rate is above the fixed rate of the swaption at the expiration date, the fixed rate receiver will most likely not exercise the swaption.
\nThis combination of instruments effectively converts part of the company's variable rate debt into a fixed rate debt, providing more stability in interest payments and mitigating the impact of interest rate fluctuations. The interest rate swaps swap quarterly interest payments, with the Group paying a fixed interest and receiving interest based on the three-month Euribor rate.
\nThe financial instruments are held at fair value with no hedge accounting applied. The fair value of these new financial instruments per 31 December 2023 are categorised below. The sensitivity analysis is pre-tax and based on the direct fair value movement at year end. The impact on the Group\u2019s equity is nil.
\n| \u00a0 | Notional amount | Inception | Maturity date | Weighted average fixed rate | Fair value 2023 | Increase by 100 bps | Decrease by 100 bps |
|---|---|---|---|---|---|---|---|
| Interest rate swaps | 250,000 | Q2-2025 to Q4-2028 | June 2025 | 2.637% | (715) | 6,063 | (6,328) |
| Swaptions | 150,000 | Q2-20251 | November 2025 | 2.632% | (3,771) | 2,362 | (3,790) |
| Total | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (4,486) | 8,425 | (10,118) |
The movements in 2023 and 2022 arising from cash flows and non-cash changes in the Group\u2018s derivative financial instruments are summarised in the following table:
\n| \u00a0 | \u00a0 | Cash flows | \u00a0 | Non-cash changes | \u00a0 |
|---|---|---|---|---|---|
| \u00a0 | Balance as at 1 January1 | Repayments | \u00a0 | Fair value changes through P&L2 | Balance as at 31 December3 |
| 2023 | 2,045 | - | \u00a0 | (6,531) | (4,486) |
| 2022 | (1,660) | - | \u00a0 | 3,705 | 2,045 |
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 and swaptions 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 2023 and 31 December 2022. Therefore, all changes related to these financial instruments will be recognised in profit or loss.
Derivatives are classified as Level 2 valuation, in accordance with the fair value hierarchy as described in IFRS 13.
\nIn 2023, new hedges were put in place for a total notional amount of \u20ac250 million to replace the hedges that expired in May 2023 (notional \u20ac205 million). In order to optimise the Group\u2019s interest rate structure, the company used a mix of plain vanilla swaps (\u20ac100 million) and extendible swaps, comprised of swaps and swaptions (\u20ac150 million). A swaption is sold by the company to reduce the cost of the swap, making use of the inverted swap curve at the time. The swaption can be used to extend the swap at the agreed fixed rate at the discretion of the fixed rate receiver at the time of the expiration date of the swap. This will most likely only be done when the fixed rate is above the market rate at that time. The fixed rate receiver also has the option of settling the swaption in cash. If the market rate is above the fixed rate of the swaption at the expiration date, the fixed rate receiver will most likely not exercise the swaption.
\nThis combination of instruments effectively converts part of the company's variable rate debt into a fixed rate debt, providing more stability in interest payments and mitigating the impact of interest rate fluctuations. The interest rate swaps swap quarterly interest payments, with the Group paying a fixed interest and receiving interest based on the three-month Euribor rate.
\nThe financial instruments are held at fair value with no hedge accounting applied. The fair value of these new financial instruments per 31 December 2023 are categorised below. The sensitivity analysis is pre-tax and based on the direct fair value movement at year end. The impact on the Group\u2019s equity is nil.
\n| \u00a0 | Notional amount | Inception | Maturity date | Weighted average fixed rate | Fair value 2023 | Increase by 100 bps | Decrease by 100 bps |
|---|---|---|---|---|---|---|---|
| Interest rate swaps | 250,000 | Q2-2025 to Q4-2028 | June 2025 | 2.637% | (715) | 6,063 | (6,328) |
| Swaptions | 150,000 | Q2-20251 | November 2025 | 2.632% | (3,771) | 2,362 | (3,790) |
| Total | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (4,486) | 8,425 | (10,118) |
The movements in 2023 and 2022 arising from cash flows and non-cash changes in the Group\u2018s derivative financial instruments are summarised in the following table:
\n| \u00a0 | \u00a0 | Cash flows | \u00a0 | Non-cash changes | \u00a0 |
|---|---|---|---|---|---|
| \u00a0 | Balance as at 1 January1 | Repayments | \u00a0 | Fair value changes through P&L2 | Balance as at 31 December3 |
| 2023 | 2,045 | - | \u00a0 | (6,531) | (4,486) |
| 2022 | (1,660) | - | \u00a0 | 3,705 | 2,045 |
As at 31 December 2023 and 31 December 2022, 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 2023 and 31 December 2022, the fair values of other long-term financial assets (security deposits) were not materially different from the carrying amounts.
As at 31 December 2023 and 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 2023, the fair values of the convertible bonds amounted to \u20ac244 million (carrying amount \u20ac256 million). As at 31 December 2022, the fair values of the convertible bonds amounted to \u20ac224 million (carrying amount \u20ac247 million).
The Group measures financial instruments such as derivatives at fair value at each reporting date.
\nFair 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.
\nThe 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.
\nA 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.
\nThe 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.
\nAll 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.
Derivatives are classified as Level 2 valuation, in accordance with the fair value hierarchy as described in IFRS 13.
\nIn 2023, new hedges were put in place for a total notional amount of \u20ac250 million to replace the hedges that expired in May 2023 (notional \u20ac205 million). In order to optimise the Group\u2019s interest rate structure, the company used a mix of plain vanilla swaps (\u20ac100 million) and extendible swaps, comprised of swaps and swaptions (\u20ac150 million). A swaption is sold by the company to reduce the cost of the swap, making use of the inverted swap curve at the time. The swaption can be used to extend the swap at the agreed fixed rate at the discretion of the fixed rate receiver at the time of the expiration date of the swap. This will most likely only be done when the fixed rate is above the market rate at that time. The fixed rate receiver also has the option of settling the swaption in cash. If the market rate is above the fixed rate of the swaption at the expiration date, the fixed rate receiver will most likely not exercise the swaption.
\nThis combination of instruments effectively converts part of the company's variable rate debt into a fixed rate debt, providing more stability in interest payments and mitigating the impact of interest rate fluctuations. The interest rate swaps swap quarterly interest payments, with the Group paying a fixed interest and receiving interest based on the three-month Euribor rate.
\nThe financial instruments are held at fair value with no hedge accounting applied. The fair value of these new financial instruments per 31 December 2023 are categorised below. The sensitivity analysis is pre-tax and based on the direct fair value movement at year end. The impact on the Group\u2019s equity is nil.
\n| \u00a0 | Notional amount | Inception | Maturity date | Weighted average fixed rate | Fair value 2023 | Increase by 100 bps | Decrease by 100 bps |
|---|---|---|---|---|---|---|---|
| Interest rate swaps | 250,000 | Q2-2025 to Q4-2028 | June 2025 | 2.637% | (715) | 6,063 | (6,328) |
| Swaptions | 150,000 | Q2-20251 | November 2025 | 2.632% | (3,771) | 2,362 | (3,790) |
| Total | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (4,486) | 8,425 | (10,118) |
The movements in 2023 and 2022 arising from cash flows and non-cash changes in the Group\u2018s derivative financial instruments are summarised in the following table:
\n| \u00a0 | \u00a0 | Cash flows | \u00a0 | Non-cash changes | \u00a0 |
|---|---|---|---|---|---|
| \u00a0 | Balance as at 1 January1 | Repayments | \u00a0 | Fair value changes through P&L2 | Balance as at 31 December3 |
| 2023 | 2,045 | - | \u00a0 | (6,531) | (4,486) |
| 2022 | (1,660) | - | \u00a0 | 3,705 | 2,045 |
As at 31 December 2023 and 31 December 2022, 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 2023 and 31 December 2022, the fair values of other long-term financial assets (security deposits) were not materially different from the carrying amounts.
As at 31 December 2023 and 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 2023, the fair values of the convertible bonds amounted to \u20ac244 million (carrying amount \u20ac256 million). As at 31 December 2022, the fair values of the convertible bonds amounted to \u20ac224 million (carrying amount \u20ac247 million).
The Group measures financial instruments such as derivatives at fair value at each reporting date.
\nFair 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.
\nThe 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.
\nThe 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.
\nAll 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.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "ixv-706": { "value": "\nFinancial 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.
\nDerecognition 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.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
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.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:724500HUXGTQC07CAZ61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "ixv-707": { "value": "\nFinancial 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 and swaptions 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 2023 and 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.
\nFair 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.
\nThe 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.
\nA 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.
\nThe 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.
\nAll 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.
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.
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.
\nCompound 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.
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.
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.
\nCompound 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.
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.
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.
\nCompound 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.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Finance income: | \u00a0 | \u00a0 |
| Other interest income | 1 | 2 |
| Total finance income | 1 | 2 |
| \u00a0 | \u00a0 | \u00a0 |
| Finance costs: | \u00a0 | \u00a0 |
| Interest on convertible bonds | (13,705) | (13,222) |
| Interest on external debt and borrowings | (30,120) | (15,384) |
| Lease liabilities interest | (41,293) | (32,573) |
| Valuation difference derivative financial instruments | (6,531) | 3,705 |
| Other finance costs (including waiver fees) | (778) | (1,161) |
| Total finance costs | (92,427) | (58,635) |
| \u00a0 | \u00a0 | \u00a0 |
| Total finance costs - net | (92,426) | (58,633) |
Valuation differences of derivative financial instruments are the result of increasing interest rates in 2023 and changes in the expected interest rate developments on 31 December 2023 compared to 31 December 2022.
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.
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.
\nCompound 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.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Finance income: | \u00a0 | \u00a0 |
| Other interest income | 1 | 2 |
| Total finance income | 1 | 2 |
| \u00a0 | \u00a0 | \u00a0 |
| Finance costs: | \u00a0 | \u00a0 |
| Interest on convertible bonds | (13,705) | (13,222) |
| Interest on external debt and borrowings | (30,120) | (15,384) |
| Lease liabilities interest | (41,293) | (32,573) |
| Valuation difference derivative financial instruments | (6,531) | 3,705 |
| Other finance costs (including waiver fees) | (778) | (1,161) |
| Total finance costs | (92,427) | (58,635) |
| \u00a0 | \u00a0 | \u00a0 |
| Total finance costs - net | (92,426) | (58,633) |
Valuation differences of derivative financial instruments are the result of increasing interest rates in 2023 and changes in the expected interest rate developments on 31 December 2023 compared to 31 December 2022.
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.
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.
\nCompound 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.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Finance income: | \u00a0 | \u00a0 |
| Other interest income | 1 | 2 |
| Total finance income | 1 | 2 |
| \u00a0 | \u00a0 | \u00a0 |
| Finance costs: | \u00a0 | \u00a0 |
| Interest on convertible bonds | (13,705) | (13,222) |
| Interest on external debt and borrowings | (30,120) | (15,384) |
| Lease liabilities interest | (41,293) | (32,573) |
| Valuation difference derivative financial instruments | (6,531) | 3,705 |
| Other finance costs (including waiver fees) | (778) | (1,161) |
| Total finance costs | (92,427) | (58,635) |
| \u00a0 | \u00a0 | \u00a0 |
| Total finance costs - net | (92,426) | (58,633) |
Valuation differences of derivative financial instruments are the result of increasing interest rates in 2023 and changes in the expected interest rate developments on 31 December 2023 compared to 31 December 2022.
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.
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.
\nCompound 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.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Finance income: | \u00a0 | \u00a0 |
| Other interest income | 1 | 2 |
| Total finance income | 1 | 2 |
| \u00a0 | \u00a0 | \u00a0 |
| Finance costs: | \u00a0 | \u00a0 |
| Interest on convertible bonds | (13,705) | (13,222) |
| Interest on external debt and borrowings | (30,120) | (15,384) |
| Lease liabilities interest | (41,293) | (32,573) |
| Valuation difference derivative financial instruments | (6,531) | 3,705 |
| Other finance costs (including waiver fees) | (778) | (1,161) |
| Total finance costs | (92,427) | (58,635) |
| \u00a0 | \u00a0 | \u00a0 |
| Total finance costs - net | (92,426) | (58,633) |
Valuation differences of derivative financial instruments are the result of increasing interest rates in 2023 and changes in the expected interest rate developments on 31 December 2023 compared to 31 December 2022.
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.
Initial recognition and subsequent measurement
The Group uses interest rate swaps and swaptions 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 2023 and 31 December 2022. Therefore, all changes related to these financial instruments will be recognised in profit or loss.
Initial recognition and subsequent measurement
The Group uses interest rate swaps and swaptions 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 2023 and 31 December 2022. Therefore, all changes related to these financial instruments will be recognised in profit or loss.
Initial recognition and subsequent measurement
The Group uses interest rate swaps and swaptions 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 2023 and 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.
\nFair 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.
\nThe 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.
\nA 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.
\nThe 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.
\nAll 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.
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.
\nIn June 2023, the Group successfully completed an amendment and extension of its existing facilities agreement that had been in place since 2016 (and amended and restated for the first time in 2018). The amended and extended facilities agreement consists of a \u20ac250 million term loan and a \u20ac400 million revolving credit facility, totalling \u20ac650 million. In addition to the term loan and revolving credit facility, the agreement includes a new uncommitted revolving facility accordion of up to \u20ac150 million. In December 2023, the Company received commitment from its syndicate banks to draw \u20ac110 million from the accordion facility. At 31 December 2023, this amount was had not yet been drawn. In January 2024, the Company received commitment from its syndicate banks to draw another \u20ac20 million. Basic-Fit can request the syndicated banks to make the remaining \u20ac20 million of the accordion facility available under the terms of the senior facility agreement, but the amount is not yet committed. The maturities of both the term loan and revolving credit facility have been extended to June 2027, with the option to request further extensions of one year in 2024 and 2025, ultimately to 2029. Furthermore, in December 2023, the Company signed an agreement with Banco Santander for a \u20ac30 million uncommitted revolving credit facility. At 31 December 2023 no amount was drawn.
\nIn 2019, the Group completed a Schuldschein issuance with a German private placement. At 31 December 2023, an amount of \u20ac18.0 million was outstanding (2022: \u20ac18.0 million).
\nIn June 2021 Basic-Fit successfully raised \u20ac303.7 million through an offering of senior unsecured convertible bonds with a maturity of seven years.\u00a0The convertible bonds, including its carrying amount, are further disclosed in note 6.3 Borrowings.
\nThe 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 less rent 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.
\nThe net debt at 31 December 2023 and at 31 December 2022 was as follows (including and excluding lease liabilities related to right-of-use assets):
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Total borrowings (incl. capitalised finance costs) | 2,534,515 | 2,218,650 |
| Less: cash and cash equivalents | (70,934) | (43,510) |
| Net debt including lease liabilities | 2,463,581 | 2,175,140 |
| Lease liabilities1 | 1,659,312 | 1,481,516 |
| Net debt excluding lease liabilities | 804,269 | 693,624 |
The increase in net debt is directly related to the investments in new club openings.\u00a0
\nUnder 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 2023, the Group complied with these covenants. The leverage ratio was 2.6 (2022: 2.9) and the interest cover ratio was 8.9 (2022: 11.7).
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Net debt excluding lease liabilities | 804,269 | 693,624 |
| Capitalised finance costs | 4,194 | 1,470 |
| Net debt (as defined under the bank covenants) | 808,463 | 695,094 |
| \u00a0 | \u00a0 | \u00a0 |
| Operating profit | 90,710 | 55,492 |
| Plus: Depreciation, amortisation and impairment charges | 390,938 | 331,389 |
| Less: COVID-19 rent credits | (526) | (2,415) |
| Less: Rent costs clubs and overhead, incl. car leases | (227,518) | (191,227) |
| Plus: Permitted exceptionals and pro forma adjustments | 53,505 | 44,802 |
| Consolidated adjusted EBITDA (as defined under the bank covenants) | 307,109 | 238,041 |
| \u00a0 | \u00a0 | \u00a0 |
| Leverage ratio for bank covenants | 2.6 | 2.9 |
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Consolidated adjusted EBITDA (see previous table) | 307,109 | 238,041 |
| \u00a0 | \u00a0 | \u00a0 |
| Finance costs - net | 92,426 | 58,633 |
| Less: non-cash adjustments: | \u00a0 | \u00a0 |
| - Valuation difference derivative financial instruments | (6,531) | 3,705 |
| - Lease liabilities interest | (41,293) | (32,573) |
| - Amortisation capitalised finance costs | (780) | (716) |
| - Accrued non-cash interest convertible bond | (9,149) | (8,667) |
| Cash interest (as defined under the bank covenants) | 34,673 | 20,382 |
| \u00a0 | \u00a0 | \u00a0 |
| Interest cover ratio for bank covenants | 8.9 | 11.7 |
The Group aims to ensure that it meets financial covenants attached to the interest-bearing debt. Breaches in meeting the financial covenants would permit the banks to immediately call the loans. There were no breaches of the financial covenants of any interest-bearing loans and borrowings in 2023 and 2022.
\nNo changes were made in the objectives, policies or processes for managing capital during the years ended 31 December 2023 and 2022.
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Finance income: | \u00a0 | \u00a0 |
| Other interest income | 1 | 2 |
| Total finance income | 1 | 2 |
| \u00a0 | \u00a0 | \u00a0 |
| Finance costs: | \u00a0 | \u00a0 |
| Interest on convertible bonds | (13,705) | (13,222) |
| Interest on external debt and borrowings | (30,120) | (15,384) |
| Lease liabilities interest | (41,293) | (32,573) |
| Valuation difference derivative financial instruments | (6,531) | 3,705 |
| Other finance costs (including waiver fees) | (778) | (1,161) |
| Total finance costs | (92,427) | (58,635) |
| \u00a0 | \u00a0 | \u00a0 |
| Total finance costs - net | (92,426) | (58,633) |
| \u00a0 | 2023 | 2022 |
|---|---|---|
| Finance income: | \u00a0 | \u00a0 |
| Other interest income | 1 | 2 |
| Total finance income | 1 | 2 |
| \u00a0 | \u00a0 | \u00a0 |
| Finance costs: | \u00a0 | \u00a0 |
| Interest on convertible bonds | (13,705) | (13,222) |
| Interest on external debt and borrowings | (30,120) | (15,384) |
| Lease liabilities interest | (41,293) | (32,573) |
| Valuation difference derivative financial instruments | (6,531) | 3,705 |
| Other finance costs (including waiver fees) | (778) | (1,161) |
| Total finance costs | (92,427) | (58,635) |
| \u00a0 | \u00a0 | \u00a0 |
| Total finance costs - net | (92,426) | (58,633) |
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:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| As at 1 January | 1,680 | 1,271 |
| Charged to profit or loss | 498 | 540 |
| New in consolidation1 | - | 166 |
| Utilised | (33) | (103) |
| Unused amounts reversed | (1,309) | (194) |
| As at 31 December | 836 | 1,680 |
| Of which: | \u00a0 | \u00a0 |
| Non-current portion of provisions (> 1 year) | 836 | 1,285 |
| Current portion of provisions (< 1 year) | - | 395 |
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.
\nRestructuring 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).
\nProvisions 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.
\nThe 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.
\nProvisions 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.
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.
During the entire year of 2023, Basic-Fit N.V., Basic Fit International B.V., BF Developments and Basic Fit Nederland B.V. formed a fiscal unity for corporate income tax. For VAT purposes, the aforementioned companies and B-Securit\u00e9 B.V. formed a fiscal unity. As a result, the companies within the fiscal unities are jointly and severally liable for each other's income tax and VAT debts.
\nDuring the entire year of 2023, HealthCity Belgi\u00eb N.V. formed a VAT unity with Basic-Fit Belgium BV. As a result, the companies are jointly and severally liable for each other's VAT debts.
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:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| As at 1 January | 1,680 | 1,271 |
| Charged to profit or loss | 498 | 540 |
| New in consolidation1 | - | 166 |
| Utilised | (33) | (103) |
| Unused amounts reversed | (1,309) | (194) |
| As at 31 December | 836 | 1,680 |
| Of which: | \u00a0 | \u00a0 |
| Non-current portion of provisions (> 1 year) | 836 | 1,285 |
| Current portion of provisions (< 1 year) | - | 395 |
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.
\nRestructuring 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).
\nProvisions 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.
\nThe 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.
\nProvisions 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.
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.
\nRestructuring 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).
\nProvisions 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.
\nThe 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.
\nProvisions 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 the reporting date, before the end of the reporting period but not recognised as a liability, are as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Property, plant and equipment | 68,334 | 94,630 |
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.
\nFuture payment obligations under these agreements are as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Within one year | 8,973 | 10,842 |
| After one year but not more than five years | 96,404 | 111,547 |
| More than five years | 149,087 | 157,803 |
| Total | 254,464 | 280,192 |
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 building is not delivered by the lessor in the condition as agreed.
\nNo discount factor is used in determining these commitments.
As at 31 December 2023, \u20ac11.0 million had been issued in bank guarantees (31 December 2022: \u20ac10.1 million).
Significant capital expenditure contracted or planned, based on lease commitments for new clubs to be opened after the reporting date, before the end of the reporting period but not recognised as a liability, are as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Property, plant and equipment | 68,334 | 94,630 |
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.
\nFuture payment obligations under these agreements are as follows:
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Within one year | 8,973 | 10,842 |
| After one year but not more than five years | 96,404 | 111,547 |
| More than five years | 149,087 | 157,803 |
| Total | 254,464 | 280,192 |
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 building is not delivered by the lessor in the condition as agreed.
\nNo discount factor is used in determining these commitments.
As at 31 December 2023, \u20ac11.0 million had been issued in bank guarantees (31 December 2022: \u20ac10.1 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.
During the entire year of 2023, Basic-Fit N.V., Basic Fit International B.V., BF Developments and Basic Fit Nederland B.V. formed a fiscal unity for corporate income tax. For VAT purposes, the aforementioned companies and B-Securit\u00e9 B.V. formed a fiscal unity. As a result, the companies within the fiscal unities are jointly and severally liable for each other's income tax and VAT debts.
\nDuring the entire year of 2023, HealthCity Belgi\u00eb N.V. formed a VAT unity with Basic-Fit Belgium BV. As a result, the companies are jointly and severally liable for each other's VAT debts.
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.
During the entire year of 2023, Basic-Fit N.V., Basic Fit International B.V., BF Developments and Basic Fit Nederland B.V. formed a fiscal unity for corporate income tax. For VAT purposes, the aforementioned companies and B-Securit\u00e9 B.V. formed a fiscal unity. As a result, the companies within the fiscal unities are jointly and severally liable for each other's income tax and VAT debts.
\nDuring the entire year of 2023, HealthCity Belgi\u00eb N.V. formed a VAT unity with Basic-Fit Belgium BV. As a result, the companies are jointly and severally liable for each other's VAT debts.
Total key management remuneration was \u20ac5,018 thousand (2022: \u20ac3,541 thousand), allocated to the following remuneration categories: Short-term employee benefits \u20ac3,798 thousand (2022: \u20ac3,313 thousand), post-employment benefits \u20ac248 thousand (2022: \u20ac239 thousand) and share-based payments \u20ac972 thousand (2022: minus \u20ac11 thousand).
\nCompensation of the Management Board members and other key management personnel was as follows:
\n| \u00a0 | Ren\u00e9 Moos (CEO) | Hans van der Aar (CFO) | Other key management personnel | Total | ||||
|---|---|---|---|---|---|---|---|---|
| \u00a0 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
| Base Salary | 729 | 729 | 651 | 601 | 797 | 703 | 2,177 | 2,033 |
| Pension allowance | 109 | 109 | 98 | 90 | 41 | 40 | 248 | 239 |
| Total fixed compensation | 838 | 838 | 749 | 691 | 838 | 743 | 2,425 | 2,272 |
| Short-term incentive | 263 | 182 | 247 | 198 | 310 | 232 | 820 | 612 |
| Long-term share-based payments | 399 | -22 | 274 | -10 | 299 | 21 | 972 | -11 |
| Total variable compensation | 662 | 160 | 521 | 188 | 609 | 253 | 1,792 | 601 |
| Social charges | 18 | 17 | 15 | 13 | 305 | 212 | 338 | 242 |
| Other | 39 | 32 | 39 | 43 | 62 | 44 | 140 | 119 |
| Total other benefits/expenses | 57 | 49 | 54 | 56 | 367 | 256 | 478 | 361 |
| Total remuneration | 1,557 | 1,047 | 1,324 | 935 | 1,814 | 1,252 | 4,695 | 3,234 |
In 2023, the annual base salaries for Ren\u00e9 Moos and Hans van der Aar amounted to \u20ac729 thousand (2022: \u20ac729 thousand) and \u20ac651 thousand (2022: \u20ac601 thousand) respectively.
\nThe 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.
\nThe remuneration reported as long-term share-based payments is based on costs incurred under IFRS (see note 3.5 Share-based payments).
\nThe short-term incentive (STI) achievement for 2023 for the Management Board was approved by the Supervisory Board on 6 February 2024. This resulted in an STI pay-out for 2023 of 36% of the annual base salary for the CEO and 38% for the CFO. The STI amount will be paid in 2024 after the adoption of the Financial Statements for 2023.
\n'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).
\nDetails of the performance shares granted to the members of the Management Board as long-term share-based payments are as follows:
\n| Board member | Year of grant | Outstanding at 1 January 2023 | Number of shares granted on target 2023 | Performance adjustment / forfeited | Vested in 2023 | Outstanding at 31 December 2023 | Fair value at grant date | lock-up date |
|---|---|---|---|---|---|---|---|---|
| Ren\u00e9 Moos | 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 |
| \u00a0 | 2023 | - | 12,806 | - | - | 12,806 | \u20ac34.16 | 21-6-2028 |
| Total shares | \u00a0 | 47,803 | 12,806 | (28,535) | - | 32,074 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Hans van der Aar | 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 |
| \u00a0 | 2023 | - | 9,532 | - | - | 9,532 | \u20ac34.16 | 21-6-2028 |
| Total shares | \u00a0 | 31,224 | 9,532 | (18,326) | - | 22,430 | \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.
\nAs at 31 December 2023, the members of the Management Board did not have any loans outstanding with Basic-Fit.
The total remuneration for Supervisory Board members was \u20ac323 thousand in 2023 (2022: \u20ac307 thousand).
\n| \u00a0 | 2023 | 2022 |
|---|---|---|
| Kees van der Graaf | 16 | 65 |
| Jan van Nieuwenhuizen | 45 | - |
| Hans Willemse | 58 | 58 |
| Carin Gorter | 60 | 60 |
| Pieter de Jong | - | 13 |
| Herman Rutgers | 55 | 55 |
| Rob van der Heijden | 58 | 56 |
| Jo\u00eblle Frijters | 31 | - |
| Total | 323 | 307 |
None of the Supervisory Board members have been granted, nor do they possess, any Basic-Fit options or shares, with the exception of Herman Rutgers who held 3,000 shares and Hans Willemse who held 40,029 shares in Basic-Fit on 31 December 2023.
The following table sets out the audit costs, as recognised in the consolidated statement of profit or loss and incurred over the past two 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):
\n| \u00a0 | EY Accountants LLP | Other EY member firms and affiliates | Total network | |||
|---|---|---|---|---|---|---|
| \u00a0 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
| Audit of the financial statements | 1,148 | 842 | 138 | 116 | 1,286 | 958 |
| Other audit procedures | 133 | 98 | - | 2 | 133 | 100 |
| Total | 1,281 | 940 | 138 | 118 | 1,419 | 1,058 |
In December 2023, Basic-Fit reached an agreement with RSG Group GMBH for the acquisition of RSG Spain S.A.U. including all 47 clubs in Spain. The total consideration agreed by the Parties for the sale and purchase of the shares is \u20ac48 million, subject to changes according to the sale and purchase agreement. At the date of publication of these financial statements, the agreement is still subject to clearance from the Spanish competition authority. The acquisition is expected to be completed in March or April 2024. With the intended acquisition, Basic-Fit will acquire all 42 McFit clubs and all 5 Holmes Place clubs in Spain. Basic-Fit intends to rebrand and fully integrate the acquired clubs. The integration of the clubs is expected to be completed in 2024. In 2022, RSG Spain reported revenue of \u20ac39 million. Basic-Fit received commitment from its syndicate banks for \u20ac110 million of the \u20ac150 million revolving facility accordion. Basic-Fit will use the additional liquidity to finance the acquisition, including club refurbishments and restructuring costs, and increase the financial headroom. The terms and conditions of the bank facilities remain unchanged. As agreed between parties in the sale and purchase agreement, Basic-Fit granted a loan to RSG Group GMBH of \u20ac9.6 million (interest 6.35%) in January 2024. Provided that closing takes place, the loan will be offset against the consideration. In the event closing does not take place, the loan must be repaid within ten days after written notice by Basic-Fit to RSG Group GMBH.
\nNo other subsequent events occurred that are significant to the Group that would require adjustment or disclosure in the financial statements now presented. Subsequent events were evaluated up to 13 March 2024, which is the date the financial statements included in this annual report were authorised for issue.