real zaragoza: modefinance credit report

modeFinance srlVAT number 01168840328

E-mail: [email protected]: www.modefinance.com

Area Science Park, Padriciano 9934149 Trieste, Italy

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modeFinanceEdificio AAREA Science Park, Padriciano 9934149 TriesteITALY

Tel: +39 040 3755337Fax: +39 040 3756741

mail: [email protected]: www.modefinance.com

Creditworthiness scale

Extremely strong(AAA)Very strong(AA)Good(A)Adequate(BBB)Sufficient(BB)Weak(B)High danger(CCC)Pathological(CC)Extremely pathological(C)Non return(D)Not available

REAL ZARAGOZA SADFundamental Credit Rating: CCC

Company name REAL ZARAGOZA SADIdentification number ESA50034107Country SpainZIP code and city 50009 - ZARAGOZAAddress CL EDUARDO IBARRA, 6Phone +34 97 6567777Web site www.realzaragoza.comEmail Not availableLegal form Joint stock company - SAAccount UnconsolidatedIncorporation date 1992NACE 2 Sector 9319 - Other sports activitiesListed UnlistedStatus ActivemF Credit limit 190,000 e

30/06/2009 30/06/2008 30/06/2007

Turnover (the) 20,428 51,268 30,557

Rating CCC CCC CProbability of default 12.00% 12.00% 45.00%Confidence Level 100% 100% 100%

Solvency ratiosLeverage ratio -6.83 -6.75 -5.49

Total asset/Total liabilties 0.85 0.85 0.82

Liquidity ratiosCurrent ratio 0.59 0.64 0.76

Quick ratio 0.58 0.63 0.75

Profitability and economic equilibrium ratiosReturn on investement ROI (%) 1.56 4.47 -19.20

Return on equity ROE (%) -13.33 -10.01 -1.43Asset turnover 0.17 0.43 0.28

Interest paid weight 3.09 0.94 -0.12EBITDA/Sales 0.69 0.37 -0.41

Interest Coverage ratiosEBIT interest coverage ratio 0.27 0.94 -8.67

EBITDA interest coverage ratio 2.44 3.82 -5.17




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Sector Analysis

Company Healthy Balanced Vulnerable RiskySolvency ratios

Leverage ratio -6.83 0.25 1.65 2.36 -3.21Total asset/Total liabilties 0.85 4.96 1.61 1.15 0.84

Liquidity ratiosCurrent ratio 0.59 2.75 1.42 0.76 0.38

Quick ratio 0.58 2.55 1.29 0.67 0.29Profitability and economic equilibrium ratios

Return on investement ROI (%) 1.56 14.87 3.52 0.36 -5.19Return on equity ROE (%) -13.33 10.97 4.72 -5.43 -36.78

Asset turnover 0.17 0.69 0.23 0.24 0.12Interest paid weight 3.09 0.00 0.09 0.02 -0.07

EBITDA/Sales 0.69 0.20 0.14 0.07 -0.05Interest Coverage ratios

EBIT interest coverage ratio 0.27 339.00 6.69 -0.45 -5.55EBITDA interest coverage ratio 2.44 528.30 10.40 2.18 -3.02

Cash Conversion Cycle (days)Days Sales Of Inventory (DIO) 5 4 5 3 5Days Sales Outstanding (DSO) 825 14 18 11 14

Days Payable Outstanding (DPO) 268 7 8 5 25Cash Conversion Cycle (DIO + DSO - DPO) 562 15 20 10 4Numer of analyzed companies - 104 500 524 210(Average) Rating CCC A BB CCC CC

The sector has been chosen according to:international companies in the sector NACE 2 9319 with financial data of year 2009.

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Sector Analysis - Graphs

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Balance Sheet

BALANCE SHEET (th e) 30/06/2009 30/06/2008 30/06/2007Accounting practice IFRS IFRS Local GAAPExchange rate EUR - EUR 1 1 1Total assets 110,566 95,248 104,033Fixed assets 54,317 49,406 44,282Intangible fixed assets 22,479 39,866 26,984Tangible fixed assets 13,974 8,610 15,482Other fixed assets 17,864 929 1,816

Current assets 56,249 45,842 59,751Stocks 259 326 338Debtors 46,152 31,518 45,553Other current assets 9,839 13,998 13,859Cash & cash equivalent 5,648 7,968 13,001

Shareholders funds -18,963 -16,572 -23,155Capital 2,000 2,000 7,513Other shareholders funds -20,964 -18,572 -30,668Total liabilities 129,529 111,820 127,188Non current liabilities 33,436 39,981 48,294Long term debt 24,071 28,595 35,862Other non-current liabilities 9,366 11,387 12,431

Current liabilities 96,093 71,839 78,895Loans 17,458 7,516 24,055Creditors 15,004 45,689 17,667Other current liabilities 63,630 18,634 37,173

Total shareh. funds & liab. 110,566 95,248 104,033

NET DEBT (th e) 30/06/2009 30/06/2008 30/06/2007Short term debts 17,458 7,516 24,055Long term debt 24,071 28,595 35,862Cash & cash equivalent 5,648 7,968 13,001

Net debt 35,881 28,142 46,917

30/06/2009 30/06/2008 30/06/2007Working capital 31,407 -13,845 28,225Net Current Assets - - -

30/06/2009 30/06/2008 30/06/2007Days Sales Of Inventory (DIO) 5 2 4Days Sales Outstanding (DSO) 825 224 544Days Payable Outstanding (DPO) 268 325 211Cash Conversion Cycle (DIO + DSO - DPO) 562 -99 337

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Income Statement

INCOME STATEMENT (th e) 30/06/2009 30/06/2008 30/06/2007Accounting practice IFRS IFRS Local GAAPExchange rate EUR - EUR 1 1 1Sales 19,026 41,184 29,119Revenues growth (%) -53.8 41.4 -

Other revenues +/- variation in inventories andcontract in progress + Fixed assets own constructioncapitalized

1,402 10,084 1,438

Operating revenue / turnover 20,428 51,268 30,557Total costs 7,388 36,034 42,505Costs growth (%) -79 -15 -

Service costs -23,866 -5,447 9,542Material costs 713 1,435 670Costs of employees 30,541 40,046 32,293

EBITDA 13,040 15,234 -11,948Depreciation 11,590 11,483 8,095EBIT 1,450 3,751 -20,043Financial P/L -5,060 -3,486 -2,243Financial revenue 276 507 71Financial expenses 5,335 3,992 2,313Interest paid 5,335 3,992 2,313

P/L before tax -3,609 265 -22,285Extr. and other P/L - - 22,799Extr. and other revenue - - 24,659Extr. and other expenses - - 1,861

P/L before tax + Extr. and other P/L - - 513Taxation -1,083 1,924 182P/L for period -2,527 -1,659 331

30/06/2009 30/06/2008 30/06/2007Cash flow 9,063 9,825 8,426Added value 43,857 55,786 43,215

30/06/2009 30/06/2008 30/06/2007Number of employees 161 159 162

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Evolutions and trends

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Qualitative information

Full overview It is a Spanish football club which has its registered business address located in Zaragoza,Spain. The club was formed out of two rival teams: Iberia SC and Real Zaragoza CD, inthe year 1932. It plays in white shirts with royal blue shorts. In addition, the club holdsgames at the La Romareda, which is a multi - purpose stadium with a seating capacity of34,596 spectators.

History Was formed out of two rival teams: Iberia SC and Real Zaragoza CD.

Primary business line A Spanish football club.

Secondary business line Not available.

Main activity Services.

Secondary activity Not available.

Main products and services A Spanish football club.

Size estimate Not available.

Strategy, organization andpolicy

Not available.

Strategic alliances Not available.

Membership of a network Not available.

Main brand names Not available.

Main domestic country Spain.

Main foreign countries orregions

Not available.

Main production sites Not available.

Main distribution sites Not available.

Main sales representationsites

Not available.

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Main customers Not available.

Auditor/Advisor/Banktype

BSCH.OF - 2833.ZARAGOZA BankerMORELLON BERNAD JUAN FRANCISCO Auditor

Boardfunction date of birth nationality

Mr Agapito Carmelo Iglesias Garcia President of the Board - -

Sharehoders (the first twenty shareholders ordered by Direct %)

CODESPORT SARating: BB

Country ISO code ES Operating revenue (MIL $) 36NACE Rev. 2, Core code - Total Assets (MIL $) 150Direct % 86.00 Number of Employees 36Total % - Information date 2010/08

Subsidiaries (the first twenty subsidiaries ordered by Direct %)

GRUPO EMPRESARIAL ESMERALDA SOCIEDAD LIMITADA.Rating: BBB

Country ISO code ES Operating revenue (MIL $) -NACE Rev. 2, Core code - Total Assets (MIL $) 0Direct % 100.00 Number of Employees -Total % 100.00 Information date 2010/08

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ZARAGOZA REAL ESTATE S.L.Rating: CC

Country ISO code ES Operating revenue (MIL $) 1NACE Rev. 2, Core code - Total Assets (MIL $) 42Direct % 99.00 Number of Employees -Total % - Information date 2010/08

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MORE rating guide

General vision

A credit rating is an opinion of the general creditworthiness of an obligor (issuer rating), or the creditworthiness of an obligor inrespect of a specific debt security, or other financial obligation (issue rating), based on relevant risk factors.

The Multi Objective Rating Evaluation (MORE) model is essentially used to assess the level of distress of industrial companies byusing data included in financial statements.

The basic idea of the model is to analyze a set of financial and economic ratios in a predictive corporate bankruptcy model withthe purpose of creating a fundamental credit rating model for each industrial sector. Results of the model are obtained by applyingnewly developed numerical methodologies, drawing together financial theory, data mining and engineering design methodologies.The heart of MORE is a multi dimensional and multi objective algorithm that produces a classification of each company, by takinginto account any attributes (such as sector and country) characterizing a firm.

The model gives the opportunity to assign a rating to a company even without considering a complete data analysis and allows toprocess quality information. It induces a better understanding of a company s strength and weakness thanks to sophisticated datamining tools and taking into account the analysts knowledge.

The MORE rating vision is to look at the fundamental economics of the company. The main idea is to evaluate the rating observingevery aspect of the economical and financial behavior of the company: better is the equilibrium between the different aspects, betterwill be the final rating.

This is done studying, evaluating and aggregating the most important sections of the financial and economic behavior of a companyas: profitability, liquidity, solvency, interest coverage and efficiency.

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Rating scale

Rating class Rating Macro class Assessment

Healthy

The company’s capacity to meet its financial commitments is extremely strong. Thecompany shows an excellent economic and financial flow and fund equilibrium.AAA

The company has very strong creditworthiness. It also has a good capital structureand economic and financial equilibrium. Difference from ’AAA’ is slight.AA

The company has a high solvency. The company is however more susceptible to theadverse effects of changes in circumstances and economic conditions than companiesin higher rated categories.

A

Balanced

Capital structure and economic equilibrium are considered adequate. The company’scapacity to meet its financial commitments could be affected by serious unfavourableevents.

BBB

A company rated ’BB’ is more vulnerable than companies rated ’BBB’. Furthermo-re the company faces major ongoing uncertainties or exposure to adverse business,financial, or economic conditions.

BB

Vulnerable

The company presents vulnerable signals with regard to its fundamentals. Adversebusiness, financial, or economic conditions will be likely to impair the company’scapacity or willingness to meet its financial commitments.

B

A company rated ’CCC’ has a dangerous disequilibrium on the capital structure andon its economic and financial fundamentals. Adverse market events and an inadequatemanagement could affect with high probability the company’s solvency.

CCC

Risky

The company shows signals of high vulnerability. In the event of adverse market andeconomic conditions, the company’s strong disequilibrium could increase.CC

The company shows considerable pathological situations. The company’s capacity tomeet its financial commitments is very low.C

The company has not any longer the capacity to meet its financial commitments.D

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Fundamental Credit Rating Ratios

Solvency ratiosLeverage ratio Measures the level of total liabilities of the company in comparison with equity.Assets to debt Indicates company s solvency. The company shows a level of deficit when the value

of this ratio is under one unit.Financial ratiosFixed Assets coverage ratio Only for holdings. It measures the capital structure i.e. whether a company covers

the fixed assets with long term capital.Liquidity ratios

Current ratio The current ratio measures whether a company has sufficient short-term assets tocover its short-term liabilities.

Quick ratio The quick ratio compares current liabilities only to those assets that can be readilyturned into cash.

Profitability and economic ratiosReturn on Investement(ROI) It measures the profitability of company investments without regard to the way the

investment is financed.Return on Equity(ROE) It measures the profitability of the equity.

Asset turnover It indicates the investments turnover with regard to sales. The level assumed fromthe ratio depends on the sector in which the company operates.

Profit margin It indicates the profitability of the sales.Interest coverage ratio

Interest Paid coverage Indicate the ability of the company to cover interest expenses through the economicmargins (Gross profit and EBIT) and through the cash flow from operating activities.

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mF Credit Limit

mF Credit limit is the estimation of the amount of maximum credit that is possible to assign on a commercial relationship with theanalyzed company with an outlook of one year.modeFinance used the following values associated with the company analyzed while computing the credit limit:

• Size;

• Years in Business;

• Average number of suppliers;

• Liquidity of the company and the comparison with its sector;;

• The funds dedicated to be paid to suppliers;

• The likelihood that a company may pay its debts in the next 12 months (MORE Ratings).

The credit limit in this report is merely a suggested value of commercial credit limit calculated on the basis of annual public data.This value should be reviewed by paying attention at the Confidence Level value and by using other information such as otherbusiness information, news... etc; and private information such as the relationship with client, history of payments, guarantees andthe knowledge of the sector.

Probability of default and Confidence Level

In addition to the MORE rating, modeFinance also estimates the probability of default and provides a level of confidence. Theprobability of default is the degree of certainty (in quantitative terms) that the company will go into default.As the probability of default is strongly affected by the economic climate the company is operating in, companies in the same MOREclass will not necessarily have the same probability of default.The MORE model can produce a MORE rating even if there is missing data by using an associated confidence level:

Confidence =∑

Available Information∑Total Information

The level of confidence does not indicate financial confidence in the company. It is a reflection of the variations in availability offinancial data across Europe due to filing regulations and suggests the degree of financial detail the MORE rating is able to takeinto account for each company.For companies with fully populated records a confidence level of 100% would be applied: companies where no financial data isprovided, 0%. This puts the MORE rating in a context for the user and aids interpretation.

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NOTES

The present analysis was based on the company available financial statements as provided by Bureau Van Dijk Electronic Publishing- ORBIS database (lack of both Notes to financial statements and Report on operations).

DISCLAIMER

All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by anymeans, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher modeFinance.The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings,conclusions and recommendations that modeFinance delivers will be based on information gathered in good faith from both primaryand secondary sources, whose accuracy we are not always in a position to guarantee. As such modeFinance can accept no liabilitywhatever for actions taken based on any information that may subsequently prove to be incorrect.

ContactsCompany modeFinanceProducts MORE ratingWhere AREA Science Park

34149 Trieste, via Padriciano 99 - ITALYInfo [email protected] www.modefinance.comPhone +39 040 3755337

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real zaragoza: modefinance credit report

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