Ljubljana, 16 December 2004
COMPANY BUSINESS IN 2004
1. BUSINESS PLAN IN 2004 COMPLETED – ALL STRATEGIC TARGETS MET
2. GOOD BUSINESS RESULTS
3. INTENSIVE INVESTMENT POLICY
4. ACTIVE FINANCIAL POLICY
5. PROGRAMME UPGRADING, ARCHITECTURAL POLICY AND A PEOPLE-FRIENDLY ENVIRONMENT
At its session on 16 December 2004 the BTC Supervisory Board agreed that 2004 had seen the completion of its business plan, taking into consideration the business results achieved and intensive investment policy. 2004 was assessed as a successful business year. In 10 months the company earned SIT 6,902 million in revenue from the service sector, which is 4.6% more than at the same time last year. SIT 8,299 million is expected by the end of the year from the service sector. The long-term debts have been paid off, interest rates have been lowered, Slovenia has entered the ERM2. As a result of all of this, but mainly due to the active financial policy, expenditure has fallen by SIT 342 million compared to 2003.
Therefore, based on the results achieved the company expects to complete the 2004 business year with 25% more profit compared to 2003, reaching SIT 1,240 million. Accordingly, the 2005 business plan is created upon the good business results and intensive business policy seen in 2004.
INVESTMENT POLICY IN 2004
• Since 2001 the BTC company has invested SIT 13.2 billion, with 2004 being the year of greatest investment. In 2004 it has invested SIT 4.6 billion and the biggest investments are:
• In 2004 our business partners have additionally invested SIT 8.1 billion within the BTC CITY area. This has produced a synergetic effect, together we are achieving much better economic growth and BTC CITY is becoming the biggest business, shopping, sports and entertainment centre in the whole of Europe. The investments have caused growth in employee numbers by creating 230 new positions.
• The upgrading of old and construction of new premises in 2004 encompasses 60,000 m2 of covered space (Water City 14,805 m2, Merkur in Hall XVII 11,500 m2, the entertainment area in Hall XVIII 8,255 m2, the computer centre in Hall IX 2,157 m2, the multi-level car park 20,497 m2 and much more).
• These investments have influenced the programme upgrading, architectural policy and creation of a more people-friendly environment.
• The investments have also brought about growth in employee numbers.
In 2004 the company has continued to carry out projects, including the programme upgrading and new architectural policy that has brought a series of changes to the surroundings, buildings and interior of many of the halls within BTC City. The start of the year was marked by the upgrading of Hall A, encompassing 27,000 m2 and 183 shops. The company and its business partners-lessees came together to upgrade the ventilation system, lights, shop windows and entrances. A panoramic elevator was constructed and an entirely different system of signs within the hall was introduced.
Clearly, the biggest investment completed is the construction of a multi-level car park with 780 parking places and spreading over 20,497 m2. The number of parking places in the whole of BTC CITY has reached 7,500 due to this investment and the construction of a new garage encompassing 36,800 m2 in City park. BTC CITY has witnessed the construction of 57,300 m2 of new parking spaces in 2004.
Three new roundabouts were built in the vicinity of the multi-level car park, together with new resting areas, green zones, planted trees, pavements and cycling paths. The entrance to BTC City from Bratislavska street next to Bauhaus has been thoroughly upgraded and it is becoming one of the 5 most important entrances to the area. As a result of all these novelties the southern part of the BTC area, between Letališka street and Bratislavska street, has been transformed into a nicer and more urban environment. With the completion of the Atlantis project it will become the biggest sports and entertainment zone in Slovenia.
September saw the construction of a roof over the outside market area which now offers better conditions for visitors and sellers alike. The stands offering fruit and vegetables were also upgraded. New kiosks for storing goods were built improving the quality of the produce.
Of all the upgrading projects and revitalisation the most important though was the construction of the Merkur centre in Hall XVII. The hall has become an up-to-date ‘everything for the home’ centre with a winter garden comprising 11,500 m2. The new entertainment centre being built in Hall XVIII encompassing 8,255 m2 and led by the company’s partner KD will also see to an even richer offer at BTC CITY. The project has not been completely carried out and the opening is expected in spring next year. The centre will offer various activities such as bowling, a free-climbing wall, an Imax cinema and much more. Among the biggest investments, the new 500 m2 cold-storage room in the Logistical Centre is worth mentioning, as well as the preparatory infrastructure works for construction of an Agip petrol station on Letališka street.
Undoubtedly the biggest investment that has still not been realised is the Atlantis Water Park marking the 50th anniversary of the company. With its saunas, outdoor and indoor swimming pools, the Park will encompass 20,364 m2, of which the covered business area will be 14,805 m2. It is believed that the Park’s daily capacity will exceed 4,000 visitors, which leads us to expect some 500,000 visitors a year.
The Water Park will contain 14 swimming pools (6 bigger ones, 3 children’s ones and 5 for specific purposes): altogether 1,856 m2 of water areas. The centre will be made up of four complexes: the World of Experiences, Children’s World, Sauna Land and the Thermal Temple.
The Atlantis Water Park is expected to be completed and open up its doors at the end of April next year. With the completion of this investment BTC City will become the biggest business, shopping, sports, entertainment and cultural centre in Europe expanding over 370,000 m2 of covered area.
The Murska Sobota subsidiary will continue its path of becoming the centre of the Prekmurje region. In addition to shopping and business activities, the subsidiary will try to develop its own ‘everything for the home’ and sports and entertainment programmes, thereby becoming a true city. Special attention has to be paid to the Novo mesto centre because there is a great need for logistical services in this part of the country.
2004 has seen the development and programme upgrading of the Logistical Centre and the company has expanded its activities to the areas of tourism, health and entertainment. The company is a co-founder of Slovenia’s first heart surgery department in Izola which started treating its first patients in the second half of 2004. The company is also a co-founder of the tourist centre Golte and has become a member of the ‘no frills’ airline Easy Jet consortium. It has also co-signed papers for the construction of a water park in Velenje and started negotiations on the construction of a similar undertaking in Maribor.
The Ljubljana High Court affirmed the District Courts’ decision to reduce the company’s basic capital in the court register by withdrawing its shares, thereby ratifying the Board’s decision to reduce the basic capital. The High Court decided that the company had enough cover for reducing the basic capital by withdrawing its shares deriving from its balance sheet. The company has enough capital reserves from previous years’ profit to allow this withdrawal.
BUSINESS PLAN FOR 2005
It is expected that the Atlantis Water park will open up its doors to visitors at the end of April. Therefore, 17% higher revenue from the service sector is expected compared to 2004, increasing the profit by 40%, that is SIT 9.9 billion in revenue and SIT 3.3 billion in gross profit, 41% more than in 2004. SIT 1,592 million profit is estimated, which is 28% more than in 2004.
The company’s financial policy will experience a radical restructuring of liabilities to ensure the company’s future business.
Investment worth SIT 3.3 billion is expected in 2005, the lion’s share of which is the completion of the Atlantis Water Park project worth SIT 2 billion; SIT 500 million for the similar, albeit smaller scale, project in Velenje; SIT 230 million for upgrading purposes and SIT 150 million for infrastructure.
Due to technical changes and cost-cutting in order to abolish or improve particular business segments, 2005 will see a more active human resources policy. Our employees will constantly have to improve their skills and knowledge. Therefore, the company will encourage and provide training, retraining and the acquiring of the right qualifications for a particular position. Unfortunately, where this is impossible the company will be forced to reduce some of its workforce. The company will insist on a higher code of ethics and expect greater job responsibility from its employees in exchange for good working and educational conditions. In order to improve financial and social security the company will abolish the minimum wage system at the beginning of 2005.
The company will still very actively employ new staff, the Water Park alone will offer 90 new positions.
The Management Board with a five-year mandate was appointed on 18 May 2004: Jože Mermal, the President and the members Marko Žehelj, engineering manager; Andrej Repina, financial manager; and Helena Petrin, general secretary, expect on the basis of the good business practice in 2004 and realistically set goals that the 2005 business plan will be fully achieved. This will continue the tradition of constant growth and development of the company, which celebrated its 50th anniversary in 2004. After the completion of the Water Park project, the company will market BTC CITY as a European product, namely because it is about to become the biggest business, shopping, sports, entertainment and cultural centre in all of Europe.
BTC plc Management
Maja Oven, Head of Marketing and Public Relations Department
Telephone: 585 13 19