Kinepolis Group Annual Report 2007
Summary PART I Board of Directors Report 2 6 TECHNOLOGICAL LEADERSHIP 31 1 LETTER TO THE SHAREHOLDERS 5 Organizational structure 8 2 COMPANY PROFILE 9 Vision and mission 9 Profile 9 Major European player 10 Key figures 11 3 CORE ACTIVITIES 13 Ticket sales 13 Food, Beverage & Retail 16 Media & Events 17 Film distribution 18 Real Estate 20 4 DIVERSIFICATIONS 23 Alternative content 23 Kinepolis goes 3D 25 The new Kinepolis concept 26 5 HUMAN RESOURCES 29 7 CORPORATE GOVERNANCE 33 Board of Directors and special committees 33 Executive management 37 Policy on conflict of interests 37 Insider trading policy 37 Warrants and options 38 Public disclosure of gross remunerations 38 Compliance with the Corporate Governance Code 39 8 FINANCIAL REPORT 41 PART II Financial statements 49 PART III Decisions proposed to shareholders 109 PART IV Information for shareholders 113 summary kinepolis group 2007
Board of Directors Report
PART I 1 Letter to the Shareholders 2 Company Profile 3 Core Activities 4 Diversifications 5 Human Resources 6 Technological Leadership 7 Corporate Governance 8 Financial Report Board of Directors Report kinepolis group 2007
DaY 1 It s marvellous, all the different emotions you can experience at Kinepolis! Tap in www.kinepolis.mobi to discover the programme at your nearest Kinepolis by cell phone, PDA or PSP. Also film information and a special events listing.
01 Letter to the Shareholders Dear Shareholder, In 2007 Kinepolis was able to increase revenue by 0.5%, despite a 3.4% fall in admissions. Revenue was boosted by digitalization and other business activities like food, beverages, retail, business-to-business and real estate. Kinepolis Group ended 2007 with net profit of 14.7 m, operating profit of 25.1 m, EBITDA of 49.6 m and revenue of 212.3 m. Net income was up 1% on 2006 ( 14.6 m). Revenue In 2007 Kinepolis Group generated total revenue of 212.3 m, 0.5% more than the year before. The gross box office (income from ticket sales) was down 3%, reflecting lower admissions, partially offset by the higher average ticket price thanks to the success of digital film. (1) EBITDA is not a recognized IFRS term. Kinepolis has defined the concept by adding back charges for depreciation, amortization, impairments and provisions to the operating profit, and subtracting any reversals or uses of the same items. Ticket sales represented a lower portion of total revenue (59%) than in 2006 (61%), with a higher portion coming from food, beverage & retail, and from commercial lettings. Food, beverage & retail rose by 5%, thanks to higher consumption per-visitor and increased sales prices. Business-to-business activities in the cinema environment remained a source of growth, with revenue from events, screen advertising etc. up 5%. Revenue from Kinepolis s film distribution division (KFD) rose, thanks to the success of Flemish films (Man zkt Vrouw, Ben X, Vermist) and of The Golden Compass. Real estate income surged by 25%, the main factor here being the letting of the Polish Cinema City Kinepolis facility to the ITIT cinema group from 19 January 2007 onwards. 53% of global revenue was generated in Belgium, the Group s home country, 25% in France, 20% in Spain, and 2% in Poland and Switzerland. Real estate development Kinepolis s land and buildings are a vital business asset. The fact of owning a good 90% of its real estate sets Kinepolis apart from most other cinema groups, giving it the independence, freedom and flexibility to come up with a number of innovative 01 LETTER TO THE SHAREHOLDERs kinepolis group 2007
projects and concepts, both inside and outside its own walls. The real estate division is being further extended and given managerial independence in 2008. In this context an additional real estate manager was recently appointed, and the board of directors was strengthened by a further director from the real estate sector. Kinepolis Group and digital cinema Kinepolis is continuing to install digital equipment in every country in which it operates, to allow the ever growing number of digital films to be presented on Kinepolis screens. Digitalization of the cinema medium is providing better sound and image quality and offering a whole range of new entertainment possibilities and business-to-business applications. Unveiling of the new open foyer Kinepolis model 3D Digital Cinema The latest Kinepolis complexes (Kinepolis Ostend and Kinepolis Bruges) incorporate a highly innovative design concept. Setting the tone are the open foyer with extensive shopping opportunities, seat reservation and ticket control facilities (the latter functioning automatically using sensors built into the seats), and the extensive digitalization of film, data and communication channels. This home-grown total concept was first implemented in December 2007, with Kinepolis Kortrijk (10 screens) becoming, on its tenth birthday, the first of the Kinepolis complexes to be converted into a new generation Kinepolis. The very latest application of digital cinema is 3D Digital Cinema (Kinepolis, Dolby Laboratories, Barco). Kinepolis has 19 3D-installations at its various international locations. In November 2007, Kinepolis presented its first 3D film Beowulf, followed in the early part of 2008 by the 3D-film Fly me to the Moon and the concert film U2 3D. Prospects Whereas the 2007 film year had one clear blockbuster season running from early May to the end of August, the expected success titles for 2008 are much better distributed over the year. In most Kinepolis complexes the seats are now numbered, allowing film fans to reserve tickets and seats in advance. In February 2008 the downtown cinema Forvm Nîmes (4 screens) also reopened after many months, totally renovated and with a seat reservation system. I am Legend continued its international year-end success into the new year. Asterix at the Olympic Games and Bienvenue chez les Ch tis got off to an overwhelming start in France and French-speaking Belgium and Aanrijding in Moskou scored well in Flanders. Thus the admission figures for January and February were influenced positively.
Still to come are highly promising film titles like 10 000 BC, Indiana Jones 4, Chronicles of Narnia: Prince Caspian, The Mummy 3, the 22nd Bond film Quantum of Solace, Harry Potter and the Halfblood Prince and Escape from Madagascar. A word of thanks On behalf of the Board of Directors we would like to thank our employees for their hard work and devotion to Kinepolis Group. 2008 is also promising to be a strong year for local films like Los and Suske en Wiske (Flanders), Disco (France) and Mortadelo & Filemon 2 and Los Crimenes de Oxford (Spain). Dividend of 0.65 per share The Board of Directors will be proposing the General Meeting of 16 May 2008 that the company declare a gross dividend of 0.65 per share in respect of 2007 (2006: 0.64 per share). The payout ratio of 30% has now been maintained for four years in a row. Kinepolis is determined to achieve its strategic goal of sustainable and profitable growth. For successfully meeting the challenges it faces at various levels, Kinepolis Group knows that it can count on the efforts and commitment of its employees and their understanding of the vital importance of creating value for both shareholders and cinema-goers. An essential factor here is digitalization, which is offering our visitors new opportunities. Customer-directed thinking, real estate development and a continuous process of innovation are the Kinepolis Group s greatest assets in maintaining its lead over the competition. Together with the Board of Directors we express our total confidence in the future. 01 Letter to shareholders Joost Bert Joint CEO Eddy Duquenne Joint CEO Baron Hugo Vandamme Chairman of the Board of Directors kinepolis group 2007
Joost Bert and Eddy Duquenne Co-CEOs Organizational structure Eddy Duquenne, the former top man at Sunparks, joined Joost Bert as co-ceo on 18 December 2007. Mr Duquenne s appointment follows the decision by the Board of Directors to significantly strengthen operating management. As co-ceo, Eddy Duquenne will carry full operating responsibility, with Joost Bert remaining responsible for strategy, concept definition and project development in the Group. The two co-ceos are supported by, among others, Jan Staelens as CFO, Tom Lambert as General Manager of Kinepolis Belgium, France and Switzerland and Manu Claessens as General Manager of Kinepolis Spain The present organizational structure of Kinepolis will be streamlined and optimized in 2008 towards customer care, professionalization of the real estate activities and effective decision-making.
02 Company Profile VISION AND MISSION Kinepolis Group stands for a world in which people enjoy the entertainment they choose for themselves when, where and with whom and decide themselves how they wish to experience their emotional thrills. Kinepolis Group intends to strengthen its leadership positions where it is already a strong player, and to become a leader on the other markets on which it is present. It also wants its audiences to enjoy top quality leisure activities and business experiences. To achieve this, it is meeting the changing needs of its audiences in a variety of ways. Kinepolis is gradually reshaping its cinemas into moving film environments where customers become the directors of their own emotions. PROFILE Since it was founded in 1997 and its subsequent SPO in 1998, Kinepolis has grown into the market leader in Belgium and a trendsetting player on the European market. With 23 cinema complexes in Belgium, France, Spain, Poland and Switzerland, welcoming 22 million visitors in 2007, Kinepolis is one of the leading cinema operators in Europe and employs almost 1 600 people. The Kinepolis concept is driven by a concern for innovation and customer focus. Kinepolis Group is one of a select group of cinemas in the world that are able to offer digital cinema, using the revolutionary DLP technology. Kinepolis now has an extensive platform of digital Kinepolis Ostend (B) 02 COMPANY PROFILE kinepolis group 2007
Kinepolis Ostend (B) 1 projectors in Belgium, France and Spain. Alongside Hollywood productions, film lovers can also experience alternative content in digital format, such as prestige events, TV serials, gaming, live concerts and sports competitions. 7 11 1 With a number of pioneering innovations each time, every new cinema complex is an additional step into the future. The most striking of these are the accessibility of the new foyers, the seat reservation system, the ticket pricing and control system, and the extensive digitalization of film, information and communication channels. 3 Kinepolis in Europe COUNTRY COMPLEXES SCREENS EMPLOYEES* Belgium 11 138 786 France 7 87 395 Spain 3 64 375 Poland 1 20 1 Switzerland 1 8 49 Total 23 317 1 588 (*) number of staff contracts on 31/12/07 10
KEY FIGURES (in thousands) (1) 31/12/2007 31/12/2006 % Total admissions (in millions) 22.0 22.8-3.4% Revenue 212 324 211 191 0.5% EBITDA (2) 49 579 48 720 1.8% Operating profit 25 146 26 507-5.1% Net financing cost -6 890-6 693-2.9% Profit before tax 18 256 19 814-7.9% Income tax expense -3 530-5 179-31.8% Net profit 14 726 14 635 0.6% Earnings per share basic 2.15 2.14 0.4% Earnings per share diluted 2.15 2.09 2.6% Net Financial Debt (NFD) 138 868 136 570 1.7% EBITDA/Revenue 23.4% 23.1% 0.3% (1) The IFRS valuation rules are available on www.kinepolis.com/investors under the financial information heading. (2) EBITDA is not a recognized IFRS term. Kinepolis has defined the concept by adding back charges for depreciation, amortization, value impairments and provisions to the operating profit, and subtracting any reversals or uses of the same items. 02 COMPANY PROFILE Kinepolis Liège (B) Kinepolis Madrid (E) kinepolis group 2007 11
DaY 2 Nearly there... The Kinepolis open foyer is a meeting place where you can reserve film tickets in advance, shop and play computer games, alone or with friends. 12
03 Core Activities 2007 will go down as a moderately good year. Despite a number of exceptional factors which worked at the cost of the number of visitors to Kinepolis cinema and cinemas in general, all core activities produced proper results. In 2007 Kinepolis was again able to count on the unbridled commitment and unequalled professionalism of its employees. TICKET SALES In 2007 Kinepolis Group welcomed 22.0 m visitors to its cinema complexes, 3.4% fewer than the year before (22.8 m visitors). The main reasons are the very strong 2006 admissions figures, a warm spring and an unexciting international film line-up. The recently opened Kinepolis complexes in Bruges (2006), Nancy and Granada (2004) all achieved significant growth in 2007. The newly opened Kinepolis Ostend (July 2007) got off to a cautious start. September and April proved the weakest months of the year for Kinepolis Group, and July the absolute top month. 03 Core activities Top films in 2007 were Pirates of the Caribbean: At World s End, Harry Potter and the Order of the Phoenix, Ratatouille, Shrek the Third, Spider-man 3 and The Simpsons Movie. kinepolis group 2007 13
Ben X and Vermist were notable local film successes in Flemish-speaking Belgium. The Departed, La Môme, Elizabeth and Eastern Promises were the main hits in the Cinémanie segment (screening of authors films). Taxi 4 and La Môme proved popular with audiences in the French-speaking part of the country. French films drew much applause in 2007, thanks in part to the film topper Taxi 4. The French top 10 also included La Môme and Arthur et les Minimoys, but Ensemble c est tout and Le cœur des hommes also did very well. Lumière sur, the French label awarded to better films (comparable with Cinémanie in Belgium and Spain), meant that many more such films were screened such as We own the night, Le Scaphandre et le Papillon, Dialogue avec mon jardinière, La vérité ou presque and Ennemi intime. In Spain the Spanish thrillers El Orfanato and Rec became real blockbusters. 14
Still to come are highly promising film titles like 10 000 BC, Indiana Jones 4, Chronicles of Narnia: Prince Caspian, The Mummy 3, the 22nd Bond film Quantum of Solace, Harry Potter and the Halfblood Prince and Escape from Madagascar. 2008 is also promising to be a strong year for local films like Los, Samson en Gert and Suske en Wiske (Flanders), Disco (France) and Mortadelo & Filemon 2 and Los Crimenes de Oxford (Spain). Whereas the 2007 film year had one clear blockbuster season running from early May to the end of August, the expected success titles for 2008 are much better distributed over the year. I am Legend continued its international year-end success into the new year. Asterix at the Olympic Games and Bienvenue chez les Ch tis got off to an overwhelming start in France and French-speaking Belgium, and Aanrijding in Moscou scored well in Flanders. In this way admissions for January and February are already very positive. 03 Core activities kinepolis group 2007 15
FOOD, BEVERAGE & retail F&B revenues and margins were again outstanding in 2007, thanks to an extended F&B range and innovative sales concepts. Kinepolis Ostend (B) The most notable trend in 2007 was the further progression in sales of healthy food and by both film-related and non-film-related merchandising in a number of Kinepolis complexes. Alongside the traditional sweet popcorn, Kinepolis Belgium also introduced salt popcorn. Kinepolis Ostend (B) Following the model of Kinepolis Bruges, Kinepolis Nancy, Kinepolis Lomme and Kinepolis Madrid, Kinepolis Ostend and Kortrijk also introduced a new sales concept. Self service outlets replace the traditional fast lanes, and the average F&B offering has been extended. Alongside the traditional favourites like coke, chips and popcorn, Kinepolis Ostend and Kortrijk are also offering a choice of healthy food and drink, like fruit juices, water, drinking yoghurt, rolls and sandwiches and fruit, in line with the current trend. Concern for customer comfort means that visitors no longer have to first go and eat elsewhere, but can enjoy a snack in a friendly atmosphere in the complex itself. 16
MEDIA & EVENTS In 2007 the Kinepolis complexes again organized a number of successful B-to-B and B-to-C events, which generated substantial Media & Events revenue. Successful B-to-B events are putting Kinepolis complexes more firmly on the map as congress and media centres. Digitalization is giving Kinepolis a unique positioning in the B-to-B landscape. Excellent customer service and state-of-the-art installations have made Kinepolis a trusted partner for events organizers. Prestigious names like Microsoft, Telefónica and Renault again opted for Kinepolis as the venue for launching their latest products. Ladies@theMovies In January 2007 the operation of Kinepolis Poznan was transferred to ITIT. Kinepolis is nonetheless continuing the B-to-B activities. Under the new name Cinema City Kinepolis, the cinema is being strongly promoted as a B-to-B location with forceful prospecting and intensive media campaigns. Kinepolis Ostend (B) In 2007 Kinepolis organized various events for specific target groups. It continued the Sunday programme for the kids and family segment ( Magic Sundays, Matinées Magiques ) and the successful Ladies@theMovies programme. Fully sold out theatres showed the Ladies@ themovies concept to be right on the ball. We are now working in Belgium on a Men@theMovies concept. popular themes and events are not forgotten either, with special initiatives around Halloween, St Valentine s Day and Christmas. In 2007 the Kinepolis website was redesigned. The site s popularity with both customers and businesses is shown among other things by the success of bannering and advertising on the site. 03 Core activities kinepolis group 2007 17
FILM DISTRIBUTION KFD confirms its success Kinepolis Film Distribution (KFD) continued its close collaboration with the Dutch company RCV. 2007 was another good year, in which KFD strengthened its reputation as an independent distributor and again treated Belgian cinema-goers to a wide choice of films, including Belgian success stories. Toppers included Man Zkt Vrouw, Ben X, Vermist and the Studio 100 productions Plop en de Pinguïn and K3 en de Kattenprins. In 2007 Flemish films seduced a record number of visitors to the cinema, with five Flemish film productions among the top twenty cinema hits for 2007. Another media channel that is advancing more and more is the network of digital screens in Kinepolis foyers. Numerous international film and TV stars again dropped in at Kinepolis in 2007, thereby strengthening its image as a film temple par excellence. Film distribution in 2007 KFD, which specializes in distributing Flemish films, has become a permanent and valued part of the Belgian film landscape. Kinepolis has continued to support Flemish films by bringing onto the big screen most of the TV films Exclusive film promotions, foyer events and special film decors made sure that there was always something for Kinepolis customers to experience. On-screen advertising also did well, with a number of media campaigns placing Kinepolis more than ever top-of-mind with Belgian, French and Spanish cinema-goers. 18
and Chris Lomme, the thriller Linkeroever by Pieter van Hees with Matthias Schoenaerts, Los, Jan Verheyen s film based on the eponymous book by Tom Naegels, to more subtle works like Patrice Toye s Spring Ritual. Young people can look forward to a number of box office hits, including the first Samson and Gert full-length film Hotel op Stelten, the Studio 100 productions Piet Piraat 3 and Het Huis Anubis, along with the digital versions of Suske & Wiske en de Texasrakkers. 2008 also marks the start of a new 3D era with the full length cartoon film Fly me to the Moon. from the second Faits Divers series, in collaboration with the VMMa (Vlaamse Mediamaatschappij). Internationally KFD scored particularly well with, among others, Premonition (Sandra Bullock) and Fracture (Anthony Hopkins), proving once again that well-known names continue to draw audiences. Huge Belgian audiences enjoyed Hairspray, the revival of the musical, and the epic fairy tale The Golden Compass, the first part of a trilogy, with actors including Nicole Kidman and Daniel Craig. Looking forward to 2008 In 2008 KFD and RCV will together be tempting us once again with a very attractive film line-up. At international film markets they have already been able to sign distribution contracts for The Eye (Jessica Alba), Bangkok Dangerous (Nicolas Cage) and Incendiary (Ewan McGregor). In addition, a whole row of Flemish products will again be providing lots of film pleasure, from the romantic comedy Aanrijding in Moskou with Barbara Sarafian, the drama Happy Together by Geoffrey Enthoven, starring Ben Van Ostade, Kürt Rogiers 03 Core activities kinepolis group 2007 19
REAL ESTATE In 2007 Real Estate continued work on existing or new cinema projects, as well as initiating a number of socalled stand-alone projects. 2007 was also a busy year for the Real Estate letting activities. Kinepolis is growing At the end of 2007 Kinepolis had 23 complexes, with 317 screens and 94 226 seats. The total surface area being operated is around 1 million m², with 55 000 m² of lettable commercial space. Kinepolis Ostend (B) This impressive real estate portfolio is in the good hands of the Real Estate division, which is responsible within Kinepolis for managing and developing a number of existing and new, special projects and a number of stand-alone projects. Activities in 2007 Ostend In July 2007 Kinepolis opened a new cinema complex in Ostend with 8 screens, 1 755 seats and 320 parking spaces on a 1.7 hectare site. This striking, sober-styled building has character and blends into its environment. Designed to be human sized and easily accessible, it immediately imparts a sense of space and calm. At last Ostend s film fanatics can feel properly catered for. Kinepolis Kortrijk (B) Poznan Since 19 January 2007 the operation of the Polish Kinepolis complex has been in the hands of the Israeli group IT International Theaters (ITIT). 18 of the 20 theatres are let to ITIT. The two remaining theatres continue to be operated by Kinepolis for commercial purposes. The good cooperation between the two reputed international cinema operators made 2007 a successful operating year. 20
Stand-alone developments In 2007 Real Estate continued work on a number of so-called stand-alone projects, that is real estate developments that are separate from cinema projects, but complementary to them. In Ghent a building licence has been obtained for an apartment project. In Hasselt a leisure centre is shortly to be developed. At Kinepolis Bruges a B-to-B reception room is being completed to meet demand for events. Other sites in Belgium and France have also been examined with a view to similar developments. Concessions In 2007 a dance school and a TV studio moved into the Kinepolis Poznan premises, and various catering businesses into the Belgian and French Kinepolis complexes. The karting in Poznan has proved a great success, as has the Lazer Game in Mulhouse. In this way the Poznan, Nîmes, Mulhouse and Braine complexes were able to offer a wider range of attractions and welcome greater numbers of visitors. Looking forward to 2008 In 2008 Real Estate is examining whether possibilities exist to build more new cinemas in Belgium, France and Spain. It is also completing a number of current Kinepolis projects, including Longdoz/Liège, Ghent and Hasselt. The outdated catering businesses in the concessions are gradually being given a new and more trendy look. Longdoz Kinepolis is partnering with Walloon project developer Wilhelm & Co to build an 8-screen, 1 264-seat cinema complex in Longdoz, Liège, with opening scheduled for the second half of 2009. Poznan The development of the planned shopping centre next to Cinema City Kinepolis in collaboration with the Spanish group Bogaris may possibly be started in 2008. 03 Core activities Mediacité Liège (B) kinepolis group 2007 21
DaY 3 Cool, there are comic strips here too. Kinepolis is not just top films. It s also the best books, comic strips, CDs and of course DVDs, all on sale in the multimedia store. 22
04 Diversifications ALTERNATIVE CONTENT Alternative content: an integral part of today s cinema scene In 2007, successful live sports events like basketball championships, as well as cast previews, concerts, operas and TV series and even surgical operations or gaming on the big screen, are increasingly supplementing programming at Kinepolis cinemas, and are proving massively popular each time with target audiences. Opera in the cinema For the second season in a row, the New York Metropolitan Opera, one of the world s most prestigious opera houses, is partnering with a number of cinemas to show 8 of its productions worldwide live in HD. This season the number of cinemas taking part has tripled to 600, including the Belgian Kinepolis complexes at Ostend, Ghent, Brussels and Antwerp. The season got under way on 15 December with Gounod s Romeo and Juliette, produced by Flemish director Guy Joosten. In collaboration with Telefónica and the Spanish National Opera, Kinepolis Madrid projected the opera Madame Butterfly with a guest performance by Spain s best known opera singer, Placido Domingo. Opera in the cinema Take That At the end of 2007, Metropolis Antwerp and Kinepolis Brussels, in collaboration with Vue Entertainment, one of Britain s leading multiplex operators, screened a live concert in HDDC (high definition digital camera) by Take That, the most successful English band since the Beatles. The concert took place in London s O 2 entertainment temple, as part of the fully booked new Take That tour Beautiful World following the release last year of the album of the same name. 04 Diversifications kinepolis group 2007 23
Let s go XL Gaming In 2007, XL Gaming or big screen gaming with the new Playstation 3 (PS3) was introduced in all European Kinepolis complexes. XL Gaming is a further application of digital cinema. During school holidays the game rooms are open daily. Outside the holidays gamers can reserve screens in their local Kinepolis cinema on Wednesday and Saturday afternoons. In cooperation with EA Games and Spain s largest youth radio station, Kinepolis Madrid organized the Spanish final of FIFA 2008. Various players from the Real Madrid team were present at the event. Kinepolis Madrid s emblematic screen 25 was packed to the last seat for this unique gaming experience. FIFA 2008, Kinepolis Madrid (E) Sports competitions Following the success with the World Cup football championship in 2006, Kinepolis Spain again organized in 2007 a number of live projections of major sports events. In collaboration with a number of national sponsors, the Spanish matches in the European basketball championship and the main America s Cup races were broadcast live at Kinepolis Madrid and Kinepolis Valencia. Kinepolis Spain also projected nine Formula-1 races on the big screen in cooperation with Tele Cinco, Spain s largest commercial TV station, allowing Spanish aficionados of F1 world champion Fernando Alonso to admire their idol s performances in optimal conditions. XL Gaming At the start of 2007 Kinepolis Ostend programmed the live broadcast of the basketball match between Telindus Ostend and Red Star Belgrado. More than 300 fans attended this event, and were delighted at the concept, the atmosphere and the cheerleaders. 24
and much more Kinepolis is also ready to give a digital stage to other alternative content forms, including even more live concerts, sports competitions, and projections for the business world. KINEPOLIS GOES 3D 100 Days Moto, Kinepolis Madrid (E) In September Kinepolis Hasselt presented live the Motorcross of Nations, the single most important motorcross competition of the year. TV series in preview: from Heroes to De Kampioenen Kinepolis Belgium, France and Spain launch Dolby 3D Digital Cinema With its revolutionary 3D system Kinepolis Group is adding a new dimension to film experience. During simultaneous press conferences in Brussels, Lomme (Lille) and Madrid, the Kinepolis Group presented its 3D system to the press in November 2007. On its path towards full digitalization with HDDC (High Definition Digital Cinema), Kinepolis is taking the road to 3D Digital Cinema in cooperation with Dolby Laboratories Inc., Barco and Texas Instruments (DLP Cinema ). At the start of 2007 fans of American serials were able to watch the pilot version of the popular NBC Heroes series at Kinepolis Madrid. This successful experiment led Fox TV to choose Kinepolis Madrid for the high definition projection of a never-before shown episode of its successful Prison Break series. 1 000 fans were invited to this exclusive event, where they could also meet various members of the cast. 04 Diversifications At the end of 2007 the digital première of popular Flemish series FC De Kampioenen took place in the presence of the players in various Belgian complexes. kinepolis group 2007 25
Kinepolis shop Open foyer, Kinepolis Kortrijk (B) This latest generation relief cinema is based on the digital DLP -technology and forms a new milestone in Kinepolis s technological development. extensive shopping opportunities, the seat reservation and ticket control facilities and the extensive digitalization of film, data and communication channels. Until now 19 Kinepolis complexes have been fitted out with a 3D-room: all Kinepolis complexes in Belgium, France and Spain. In November 2007, Kinepolis presented its first 3D film Beowulf, followed in Belgium in early 2008 by Fly me to the Moon. The concert film U2 3D became the third 3D film on the bill in March 2008. The merging of digital sound and relief images offered U2 fans a concert experience that was almost the real thing. THE NEW KINEPOLIS CONCEPT The latest Kinepolis complexes (Kinepolis Ostend and Kinepolis Bruges) integrate a highly innovative design concept. Setting the tone are the open foyer with This home-grown concept was first implemented in December 2007 in an existing complex, with Kinepolis Kortrijk (opened in 1997) the first of the Kinepolis complexes to be converted to the new Kinepolis concept. Kinepolis Kortrijk has been turned into a hightech cinema complex, and now serves as a showcase for the new Kinepolis concept. Open foyer The central, open foyer is a meeting place for everyone, and not just for film-goers. There is room for leisure in the film corner, for play in the gaming corner, for shopping pleasure in the Kinepolis shop or for a friendly drink or snack with friends in one of the eating areas. 26