|ECONOMIC-FINANCIAL SUMMARY 2019/20 (excluding stadium redevelopment project)|
|MILLIONS OF EUROS||2018/19||2019/20|
|Income (before income from disposal of fixed assets)||757.3||714.9|
|Profit after taxes||38.4||0.3|
|Equity as of June 30||532.8||532.9|
|Cash at June 30||155.7||125.3|
|Net debt as of June 30||-27.1||240.6|
|Debt to ebitda ratio||0.0x||1.4x|
|Debt to equity ratio||0.0x||0.5x|
|STADIUM RENOVATION PROJECT: SITUATION AT JUNE 30, 2020 (IN MILLION EUROS)|
|2020/21 REVENUE BUDGET (IN MILLION EUROS)||616.8|
After the meeting of the Board of Directors of Real Madrid CF on December 2, 2020, it was agreed to convene an Ordinary General Meeting for December 20, 2020, during which the results corresponding to the 2019/20 season. Questions.
In the economic field, the 2019/20 financial year has been marked in its last three and a half months by the effects of the health pandemic caused by COVID-19 and it is foreseeable that these effects will continue throughout the financial year 2020/21.
In terms of sports results, the first football team won the league title and the Spanish Super Cup in 2020, while the basketball team won the Copa del Rey trophy.
With regard to the renovation project of the Santiago Bernabéu stadium, in 2019/20 the works were carried out as planned, compensating for the cessation of activity decreed by the Government in the period from March 30 to April 13 with the greater ease of carrying out the work, which means that matches at the Santiago Bernabéu stadium have not been played since March 14. The cumulative investment amounts to 113.7 million euros and the first drawdown of the loan for an amount of 100 million euros has been made.
Likewise, the merger by absorption took place, effective July 1, 2020 and therefore already in the 2020/21 financial year, of the women’s football Club Deportivo Tacón, by Real Madrid CF, a merger that had been approved by the Extraordinary General Meeting held on September 16, 2019.
The impact of COVID-19 led to a decrease in revenues of -13% (-106 million euros), and after discounting the costs directly associated with these revenues (16 million euros), represents a loss of – €91 million caused by COVID-19 in fiscal year 2019/20.
To mitigate the impact of lost revenue, the club has implemented cost reduction measures.
In terms of personnel costs, the players and coaches of Real Madrid’s first football and basketball teams, as well as the main managers of the different divisions of the club, have voluntarily agreed to lower their remuneration for this year by 10% (this reduction would have been 20% if the league competition could not be completed).
Likewise, in operating expenses, a savings plan has been established through which a reduction in expenses has been achieved, in addition to that derived from the loss of income, equivalent to 8% of the total annual expense.
After the savings measures adopted to mitigate the impact caused by COVID-19, the club closed the 2019/20 financial year with an economic result in balance (0.3 million euros).
In financial terms, the impact caused by COVID-19 on cash as of June 30, 2020 (-154 million euros), is almost 50% higher than the impact of the drop in income, the club having to assume , in addition to the loss of income indicated above, the postponement of collection of certain sponsorship contracts and contributions.
To compensate for this impact, the club obtained new long-term bank financing during the months of April and May 2020, of which €155 million corresponds to four loans with a maturity of 5 years and €50 million corresponds to a policy of 3-year loan. The operations have been formalized independently with the five national banking entities with which the club operates and are approved by the ICO within the framework approved by the government to facilitate business liquidity.
As of June 30, 2020, the club has a net worth of €533 million, a cash position of €125 million (excluding cash from the stadium renovation project) and has available funds in credit policies term of an amount sufficient to meet its needs. payment obligations in the difficult economic context which will continue throughout the 2020/21 financial year.
Real Madrid’s contribution to tax and social security revenue for the 2019/20 financial year amounted to 286.4 million euros.
The club donated 3.3 million euros for the purchase of medical supplies to fight the pandemic, intended for the Comunidad de Madrid, the Madrid City Hall and the Sanitary Supply Center. The club has also made the facilities of the Santiago Bernabéu stadium available to the health authorities as a supply warehouse.
In 2020/21, a turnover of €616.8 million is budgeted, which represents a decrease of -14% compared to the 2019/20 financial year, already impacted by the pandemic in the revenues of its last four-month period. , and -25% compared to the 2019/20 budget before the pandemic, which was €822.1 million.
The loss of revenue due to the effect of COVID-19 on the 2020/21 financial year affects the various businesses, mainly in the stadium, where the income from match attendance is not budgeted, and in the commercial activities, where it are reduced Revenue from the stadium tour and shops is little expressed, although there remains uncertainty as to the degree of final impact that revenue will suffer depending on the evolution of the health situation until the end of the year.
If the pandemic had not happened and if the revenue growth trend of previous years had been followed, the budget for the 2020/21 season would have reached a figure close to 900 million euros, a gap of almost of 300 million euros compared to what was budgeted following the pandemic.
Despite the savings measures that are in place, the result after tax will be significantly affected by this significant loss of income, although the club will endeavor to realize the improvement opportunities to try to balance the result as it had been made the previous year.