Euro Disney makes a net loss of €166 million in the first six months of 2017


Euro Disney S.C.A.  published their six month end results today.   In the first six months until 31 March 2017 Disneyland Paris made a net loss of €166 million.  Resort revenues increased 2% to €613 million and operational costs decreased 1% to €756 million.  Due to the lateness of the Easter vacation period in 2017, the Easter holiday  figures are not included in this semesters figures

Theme park attendance increased upon 5% on last year, but revenues have only increased 1% to €345 million due to 3% decrease in average spending per guest.  The decrease in average spending per guest was explained by lower spending on admission tickets and merchandise.

The increase in attendance was due to more guests visiting from the United Kingdom and France, with  fewer guests visiting from Belgium.

Disney Hotels and Disney Village revenues increased 4% to €249 million mainly due to a 3%  increase in hotel occupancy due to visitors from the United Kingdom, and was partially offset by fewer guests staying at the hotels from France and from corporate business groups.

Real estate development  revenues increased by €6 million to €10 million due to higher land sales.  Marketing and sales expenses remained relatively flat compared to the prior-year period.

During the six months ended March 31, 2017, Euro Disney drew an additional €60 million under the €350 million Revolving Credit Facility. As of March 31, 2017, the Group has borrowed €190 million from the Revolving Credit Facility available from TWDC.  €160 million remains undrawn.

A summary of the results are below and the full report can be download in PDF format here.

Announcement for
Six Months Ended March 31, 2017

• Resort revenues were €613 million, an increase of 2% compared to the same prior-year period due to higher volumes as the prior-year period was impacted by a four-day closure of the parks following the November 2015 events in Paris

• Costs and expenses decreased 1% to €756 million mainly due to a €38 million reduction in depreciation, partially offset by continued investment and costs associated with higher resort volumes

• Net loss at €166 million, decreased by €18 million compared to the prior-year period

• On March 25, 2017, Disneyland® Paris officially launched its 25th Anniversary celebration

•  In March 2017, the Supervisory Board issued its unanimous support for the cash tender offer announced by The Walt Disney Company (“TWDC”), which remains subject to Autorité des marchés financiers (“AMF”) approval. In its filing with the AMF, TWDC confirmed its support of a recapitalization of the Group of up to €1.5 billion.

(Marne-la-Vallée, April 20, 2017) Euro Disney S.C.A. (the “Company”), parent company of Euro Disney Associés S.C.A., operator of Disneyland® Paris, today reported results of the consolidated group (the “Group”) for the six months ended March 31, 2017.



Commenting on the results, Catherine Powell, Présidente of Euro Disney S.A.S., said:

“This semester, we recorded higher revenues with increased resort volumes; however the environment remains uncertain. Recently, The Walt Disney Company reaffirmed its commitment to Disneyland® Paris and to France announcing its intention to support a recapitalization of the Group of up to €1.5 billion. Along with the Board, we welcome this positive proposal that will enable us to continue our on-going investments and pursue our strategy to further strengthen and improve the resort.

Disneyland® Park looks more beautiful than ever as we celebrate our 25th Anniversary, including six fully renovated attractions and enhanced iconic park features. We look forward to sharing new products and entertainment experiences with our guests, Cast Members and partners during the festivities.”


The Group’s business is subject to the effects of seasonality and the last six months of the fiscal year, which include the summer months, usually include higher revenues. Consequently, the operating results for the six months ended March 31, 2017 are not necessarily indicative of results to be expected for the last six months of the fiscal year.

In addition, results for the six months ended March 31, 2017 have been unfavorably impacted by a shift in the Easter vacation period to the last six months of the fiscal year.


Resort operating segment revenues increased 2% to €613 million compared to €600 million in the prior-year period.

Theme parks revenues increased 1% to €345 million due to a 5% increase in attendance as the prior-year period was impacted by the November 2015 events in Paris, which included a four-day closure of the parks. This increase was partially offset by a 3% decrease in average spending per guest. The increase in attendance was mainly due to more guests visiting from the United Kingdom and France, partially offset by fewer guests visiting from Belgium. The decrease in average spending per guest was due to lower spending on admissions and merchandise.

Hotels and Disney Village® revenues increased 4% to €249 million mainly due to a 3 percentage point increase in hotel occupancy. This increase resulted from more guests visiting from the United Kingdom, partially offset by fewer guests staying at the hotels from France and business groups.

Real estate development operating segment revenues increased by €6 million to €10 million due to higher land sale activity. Given the nature of the Group’s real estate development activity, the number and size of transactions vary from one period to the next.


Direct operating costs decreased 2% compared to the prior-year period due to lower depreciation in the currentyear period. The lower depreciation is the result of the lower carrying value of the Group’s long-lived assets due to the €565 million impairment charge recorded as of September 30, 2016. This decrease was partially offset by continued enhancements to the guest experience, which includes new shows and hotel refurbishments, as well as costs associated with higher resort and real estate activities. In addition, the Group incurred increased labor costs due to an amendment of its employee retirement plan and incremental security costs.

Marketing and sales expenses remained relatively flat compared to the prior-year period.

General and administrative expenses increased 7% mainly due to higher labor costs, including the amendment of the employee retirement plan.


Net financial charges remained flat at €19 million compared to the prior-year period.


For the six months ended March 31, 2017, the net loss of the Group decreased to €166 million from €184 million in the prior-year period.


Cash and cash equivalents as of March 31, 2017 were €66 million, down €47 million compared with September 30, 2016. Cash used in the Group’s activities for the six months ended March 31, 2017 totaled €47 million compared to €147 million used in the prior-year period. This variance resulted from:


Cash generated by operating activities for the six months ended March 31, 2017 totaled €23 million compared to €55 million used in the prior-year period. This variance resulted from a waiver of royalties and management fees payment in the current-year period, compared with €47 million of royalties and management fees paid in the prior-year period, as well as lower working capital requirements.

In November 2016, The Walt Disney Company (“TWDC”) agreed to waive two years of royalties and management fees, commencing with the payment for the fourth quarter of fiscal year 2016, to provide the Group liquidity above its remaining undrawn revolving credit facility granted by TWDC (the “Revolving Credit Facility”).

Cash used in investing activities for the six months ended March 31, 2017 totaled €129 million compared to €89 million used in the prior-year period. This variance was due to investments to enhance the guest experience in preparation for Disneyland® Paris’ 25th Anniversary celebration as well as cash provided to the Les Villages Nature de Val d’Europe S.A.S joint venture.

Cash generated by financing activities totaled €59 million for the six months ended March 31, 2017 compared to €3 million used in the prior-year period. During the six months ended March 31, 2017, the Group drew an additional €60 million under the €350 million Revolving Credit Facility. As of March 31, 2017, the Group still has a €160 million undrawn Revolving Credit Facility available from TWDC.


Evolution of TWDC’s ownership, proposed cash tender offer and recapitalization plan

In February 2017, TWDC through its subsidiary EDL Holding Company LLC, acquired 90% of Kingdom 5-KR-11, Ltd shares in the Company at a price of €2.00 per share, increasing its interest in the Company to 85.7%. The consideration was paid in shares of TWDC common stock.

In connection with this transaction, TWDC announced its intention to launch a tender offer (through its subsidiaries EDL Holding Company LLC, Euro Disney Investments S.A.S. and EDL Corporation S.A.S.) for all of the Company’s shares not already owned by TWDC subsidiaries, other than treasury shares, at a price of €2.00 per share (the “Tender Offer”) to be paid in cash. In addition, TWDC announced its intention to proceed with a mandatory buy-out and delisting of the Company’s shares from Euronext Paris, if at the close of the Tender Offer, it owns at least 95% of the Company shares.

Further TWDC committed to support a recapitalization of the Group of up to €1.5 billion subsequent to the completion of the Tender Offer. Proceeds from the recapitalization would be used to enable the Group to continue its investments in Disneyland® Paris, repay most or all its indebtedness and increase its liquidity.

On March 30, 2017, TWDC and the Company filed, respectively, the draft Tender Offer document and the draft response document (including the independent expert report) with the French Autorité des marchés financiers (“AMF”). The documents remain subject to AMF review and approval. Once approved, the AMF will publish a clearance decision relating to the Tender Offer on its website and such decision will entail approval (visa) by the AMF of the Tender Offer document and the response document.

For more information, please refer to the draft Tender Offer document and the draft response document which are available on the Company’s and the AMF’s websites, as well as the related press releases.

Launch of Disneyland® Paris 25th Anniversary Celebration

On March 25, 2017, Disneyland Paris launched its 25th Anniversary celebration, which features enhanced attractions including Star Wars Hyperspace Mountain: Rebel Mission and Star Tours: The Adventures Continue. The festivities also include two new daytime shows and a new parade. In the evening, guests can enjoy a new nighttime spectacular, including state-of-the-art technology, sound, lights, projections, fountains and new pyrotechnic effects.

Economic and social impact of Disneyland® Paris over the last 25 years

A new study on the socio-economic impact of Disneyland Paris was issued in February 2017 by the interministerial Delegation for the Euro Disney project in France. The study covers the 25-year period since opening in 1992. The study confirms Disneyland Paris as Europe’s number one tourist destination and as the fifth largest hotel complex in France. Some notable mentions for the last 25 years contained in the report are as follows:

•  320 million guests visited Disneyland Paris over the last 25 years

•  56% of guests come from other countries, primarily in Europe, and 44% come from France

• €68 billion of value added to the French economy has been generated by Disneyland Paris

•  56,000 direct, indirect and induced jobs have been created by Disneyland Paris activity

•  500 different job roles at Disneyland Paris, 100 nationalities, 20 languages spoken highlight Disneyland Paris as a major employer in France and Europe

For more information, please refer to the Company’s website:

Next scheduled release:
Availability of the 2017 Interim Report in May 2017

[ END ]

Posted in Disneyland Paris

CIAM rejects TWDC offer of €2 a share.


The CIAM investment fund said on Tuesday (18 APril 2017) that the price offered by The Walt Disney Company to Euro Disney S.C.A. shareholders of €2.00 per share, is unfair to minority shareholders.

The French asset fund manager, which holds approximately 1.4% of Disneyland Paris shares, adds in a statement that the minimum acceptable price is €2.50 per share.

The Walt Disney Company announced in February its intention to take full control of Euro Disney  after increasing its stake in Disneyland Paris by acquiring most of the shares of Kingdom Holding, the holding company of the Saudi prince Al Walid bin Talal.

TWDC plans to recapitalize Euro Disney up to a maximum of €1.5 billion to reduce the parks debt and improve its financial situation.  Disney is proposing two euros per share for minority shareholders, representing a 67% premium on the closing price of Euro Disney shares on 9 February, the day before the announcement of the offer.

The Autorité des Marchés Financiers (AMF) is expected to announce their decision on whether they will allow The Walt Disney Company to takeover Euro Disney on  the 25 April 2017.

If The Walt Disney Company takeover Offer is approved by the AMF, the offer is scheduled to open to shareholders on 26 April and will run until 23 May 2017.

If The Walt Disney Company obtains at least 95% of the share capital and voting rights of Euro Disney, TWDC intends to withdraw Euro Disney from the stock exchange and proceed with a mandatory takeover of the company on 8 June 2017.


Posted in Disneyland Paris

Could Apple be considering a potential takeover of Disney?

According analysis from RBC Capital Markets, Apple Inc could potentially pull off a $200 billion plus takeover of The Walt Disney Company.

The takeover would create a company worth $1 trillion with “almost limitless opportunities in content and technology.”

“Recently, investors have increased their expectations that Apple could seriously consider acquiring Disney,” RBC Capital Markets analysts Steven Cahall and Leo Kulp wrote in a note to clients on Thursday.

 The Apple merger and aquisistion rumor mill  started last autumn, when Tim Cook,  Chief Executive Officer of Apple told analysts that Apple was “open to acquisitions of any size.”

Apple executives met with Time Warner senior management in late 2015 in a discussion that raised the possibility of a merger — before AT&T moved in on its $85 billion bid for Time Warner.

The Apple-Disney aquisistion roumors comes as analysts in the last few months have debated the possibility that Disney would make a move to buy Netflix — a highly leveraged transaction that some view as needlessly risky.

Would Apple shareholders support such a move? Assuming a 40% premium for The Walt Disney Company, the deal would carry a hefty $237 billion price tag. 

If Apple investors balk, TWDC could consider spinning off assets like ESPN and the troubled Theme Park division to make the deal more palatable.

“We like Disney’s fundamentals. Assuming Apple sees the same thing and has the cash, investor anticipation of a prospective transaction only adds conviction to the momentum we see in Disney’s shares,” Cahall and Kulp wrote.

Shares in Apple closed at $141.05 on Friday, and The Walt Disney Company ended the week at $113.20.

Posted in Disneyland Paris

Answers to the Shareholders’ Written Questions from the March 2017 AGM


Euro Disney S.C.A. received ten written questions from two shareholders for this years Annual General Meeting.

The following are the questions received from M. Michel Bayard (individual shareholder): 

Question  1: M.  Michel  Bayard  would  like  to  understand  why  revenues  decreased  while  costs and expenses increased in Fiscal Year 2016? 

Fiscal  Year  2016  was  particularly  difficult  for  the  tourism  industry  in Île -de-France.  It  was  marked  by  an  accumulation  of  external  factors  that  had  a  negative  impact  which  include:  security concerns following the events in Paris, Brussels and Nice, as well as strikes in France  and  exceptionally  poor  weather conditions,  including flooding in Paris.  In addition, the Euro  Disney Group (the “Group”)  closed the parks for four  days to  respect the  national period of mourning.

Over  the  same  period,  costs  increased  driven  by  the  Group’s  continued  focus  on  its  long- term  strategy of investing in  the  guest  experience  and  entertainment.  These planned  cost  increases  were  necessary  in  executing  our  strategy  and  included  renovations  of  our  parks and hotels, and preparations for the 25th Anniversary.

In addition, following the events in Paris, Nice and Brussels,  the Group incurred  additional  costs related to  incremental security  measures,  as the safety of visitors and employees  is a  top priority at Disneyland Paris.

The  Group  remains  attentive  to  the  evolution  of  its  costs  and  will  continue  to  pursue  a  prudent approach in operating the business and executing its long-term strategy.

Question  2: M.  Michel  Bayard  expressed  being  perplexed  about  the  impairment  charge  recorded this year and he would like to know why the impairment was not anticipated in  the previous years? 

In   accordance   with  the   accounting   rules,   an   impairment   test   is   only   required  to   be  performed if there is an  indicator of impairment.  Due to the decline in revenue of the Group  in fiscal year 2016  resulting from the challenging economic environment in Europe (and in  particular  the  overall  tourism  industry  in  Paris)  it  was  determined  that  an  indicator  of  impairment existed.  Accordingly, the Group was required to perform an impairment test on  the Group’s asset in the current year.

Question 3: M. Michel Bayard would like to know how the Group intends to limit the risk  that its investments will not have a positive impact on its revenues .  

The  Group’s  strategy  is  a  long-term  strategy.  This  strategy  aims  to  enhance  the  guest  experience, and therefore,  increase guest satisfaction as well as average spending. If guests  are  satisfied  they  return  to  the  Park,  recommend  the  Park  to  family  and  friends,  and  consume more in the Disneyland Paris parks, hotels and boutiques.

Guest satisfaction  related to our recent investments (i.e., renovated hotels and Park assets)  is increasing.  The rehabilitation of the Newport Bay Club Hotel is a perfect example: since its  reopening,  guest  satisfaction  has  increased  by  30  points  and  we  have  seen  a  double-digit  increase in rates.

The Group monitors  its investments closely, including the ongoing assessment of the impact  from prior investments (i.e., financial, guest satisfaction, operational).

Question  4: M.  Michel Bayard  estimates/believes  that  the reference document  does  not  sufficiently detail the impairment charge. 

The  depreciation  of  our  long-term  assets  is  detailed  in  section  B.3  “Consolidated  financial  statements”,  note  3  “Property,  plant  and  equipment,  investment  property  and  intangible  assets”, section 3.3 “Impairment charge” (see page 83).

In this section, the Group provides robust disclosure on the  assumptions used in calculating  the value in use of the assets in determining the impairment charge.

Question 5: M. Michel Bayard asked for more information on royalties: 1) Is the 10% rate comparable with market rates? 2) Is it normal that a parent company with the amount of revenues as The Walt Disney Company charges its subsidiary for certain costs?

On average royalties represent 5% of total revenue, which is a lower level than some market practices.

These royalties are paid as compensation for the use of the intellectual property rights of TWDC. This intellectual property constitutes the “terroir” of Disneyland Paris that makes it unique and creates the Disney magic.

Royalties to be paid  by the Group for the  use of these  rights are equal to:

•    10% of gross  revenues  (net of taxes) from  rides, admissions and  related fees  (such as   parking, tour guides and similar service fees) at all Theme  Parks and attractions;

 •    5%  of gross  revenues  (net  of taxes) from  merchandise, food  and  beverage sales  in  or             adjacent  to  any  Theme  Park  or  other  attraction,  or  in  any  other  facility  (with  the             exception        of   the     Disneyland®         Hotel),   whose         overall      design      concept       is   based             predominantly on a  Disney theme;

  •    10%   of   all   fees   paid   by   participants   (net   of   taxes)   (see   section   A.4.2.   “Other   Significant Operating Agreements” for more details); and

•    5%  of gross  revenues  (net  of taxes) from the  exploitation  of  hotel  rooms  and  related     revenues  at  certain  Disney-themed  accommodations.  None  of  the  Group’s  currently   existing  Hotels  at the  Resort  are  considered  Disney-themed  as  defined  in the  License  Agreement, except the  Disneyland  Hotel which is specifically excluded.

In  November  2016, The Walt  Disney  Company  agreed to waive the  payment  of two years  of  royalties  and  management  fees,  commencing  with  payment  for  the  fourth  quarter  of  Fiscal  Year 2016.

Following  are  the  questions  received  from  Charity  &  Investment  Merger  Arbitrage  Fund  (“CIMA”)   

Question 6: “How do you justify the significant increase in the  cost and  expense items of  the  consolidated  income statement for the fiscal year 2016?   In particular the distribution  of variable compensation while the company recorded a significant loss.” 

Costs and expenses were up 5% compared to the prior year. This increase reflects  the long- term strategy  of the Group  of investing in the guest experience, including the renovation of  theme parks and hotels  (notably in preparation of the 25th Anniversary), higher salaries,  and other operating expenses (such as technology initiatives and mobile applications). The Group  also  increased  its  security  costs  following  the  events  in  Paris,  Nice  and  Brussels.  These  increases were partially offset by lower costs associated with declining attendance.

The  wage  policies  implemented  by  the  Group  are  market-consistent  and  comparable  to  practices implemented by companies of similar size and / or operating in the same industry.

Question 7: “How do you justify the 40% increase in expenses over the years 2006 to 2016  while over the same period the revenues increased only by  17.5%?” 

From 2006 to 2016 our costs  have grown at a compounded annual rate of approximately 3%.   Over the same  period, the compounded annual growth  rate of inflation was  1.2%.

During  this  time,  the  Group’s  strategy  focused  on  investing  in  the  guest  experience  to  generate  long-term  revenue  growth.  This  strategy  is  proving  successful.  Disney’s  Newport  Bay Club and other renovations in the parks are good examples. The Group is also investing  in entertainment and shows that drive guest satisfaction, including the launch of the show  The Forest of Enchantment: A Disney Musical Adventure and Mickey and the Magician.

Additionally during this period, the Group invested in areas that are  less visible to our guests.   Examples  include  investments  in  the  Cast  Members  who  deliver  the  service  to  our  guests  and create the Magic, as well as  invests  in technology  that  makes  online tools and mobile  applications available to guests before and during their stay.

Regarding revenue performance, it is important to note that from 2006 to 2016, the Group  experienced economic crises, terrorist attacks, and political instability, all of which negatively  impacted  revenue  growth  during  the  period.    Had  the  Group  not  pursued  the  strategy  of  investing  to  improve  the  guest  experience,  the  impact  of  these  unfavorable  events  would  have likely been much more detrimental.

Question  8: “How  exactly  do  you  justify  the  2  massive  depreciation  charges  announced  respectively for €565 million for the assets of Euro Disney Associés S.C.A. and €953 million  for the shares of Euro Disney Associés S.C.A. held by Euro Disney S.C.A. ?” 

As  disclosed  in  our  2016  Reference  Document,  “as  a  result  of  the  adverse  economic  conditions  of  the  tourism  industry  in  Paris,  which  contributed  to  the  deterioration  of  the  operating results of the Group for Fiscal Year 2016, the Group performed an impairment test  of all its long-lived assets and determined its assets were impaired. Accordingly, the Group  recorded a  charge  of  €565  million  in  the  year.”   This impairment charge  was  calculated  in  accordance with International Financial Reporting Standards (“IFRS”).

Separately, the Company prepared stand-alone statutory financial statements under French  accounting principles (being different than IFRS principles) with the Company’s primary asset  being its investment in the equity of its subsidiary  Euro Disney Associés S.C.A. (“EDA”). The  Company   performed   an   impairment   test   of   its   investment   in   EDA   and   recorded   an impairment charge of €953 million.

These asset depreciation charges have no impact on the liquidity position of the Group  and  the Company or on their cash flows.

More  information  on  these  asset  impairment  charges  are  included  in  the  2016  Reference  Document  of  the  Group,  notably  notes  “Impairment  of  long-lived  assets”  and  3.3.  “Impairment charge” of the consolidated financial statements and notes 2.3. “Investments in  subsidiaries” and 3.1. “EDA” of the statutory financial statements of the Company.

Fiscal years 2014 and 2016 included  impairments charges which impacted overall accounting  losses in those years.

For  Fiscal  Year  2016,  the  Company  recorded  a  net  loss  of  953  million  euros  due  to  an  impairment  of  its  investment   in  the  equity  of   its  main  subsidiary,  EDA,  the  operating  company of  Disneyland® Paris.   In Fiscal Year 2014, the Company recorded a  net loss of 472  million  euros,  of which 471 million euros  related to an impairment charge of its investment  in the equity of  EDA.

Excluding the 2014 and 2016  impairments, the average statutory loss of Euro Disney S.C.A.  from 2014 to 2016 was €3 million.

Question 10: “How do you justify the impairment of the assets at the level of Euro Disney  Associés  S.C.A. and EDL Hôtels  S.C.A., while the first quarter shows an upward trend (up  3% in revenues) and you assume on page 83 of the reference document for 2016 that  ‘the  group  will  benefit  from  its  25th  anniversary  celebration,  the  economic  recover y  of  the  tourism industry in Paris and its long-term strategy of investing in the guest experience’?” 

As  detailed  on  page  83  of  the  2016 Reference Document,  the  calculation  of  value  in  use  takes into account  a  “revenue growth assumption higher than the historical average as the  calculation  assumes  the  Group  will  benefit  from  its  25th  anniversary  celebration,  the  economic recovery of the tourism industry in Paris and its long-term strategy of investing in  the guest experience.”

Finally, while performance in the first quarter was  positive, it was in comparison to the first  quarter  of  fiscal  year  2016,  which  was  significantly  impacted  by  the  events  in  Paris,  the  closure of our parks for four days, and the subsequent decline in bookings.

Source: Euro Disney S.C.A.

Posted in Disneyland Paris

Café Mickey reopens with an Italian flavour.

Disneyland Paris’ Café Mickey located in the Disney Village has reopened this week with a new Italian themed menu.

The restaurant which overlooks Lake Disney has relaunched this week with a new menu which sees a three course meal available for adults from €36.99 and €17.99 for children.

How popular Café Mickey will now become after the decision was made to remove Disney characters from the restaurant is yet to be seen.  But the introduction of a new menu to the restaurant is a welcomed move.

Posted in Disneyland Paris

Transcript of Mark Stead’s Euro Disney AGM speech made on 31 March 2017.


Below is a transcript of the speech Mark Stead, the Chief Financial Officer of Euro Disney S.C.A made to shareholders last week at the Euro Disney Annual General Meeting



Euro Disney S.C.A. Annual General Meeting
March 31, 2017
Speech of Mark Stead, Chief Financial Officer, Euro Disney S.C.A.


Thank you, Catherine.

Ladies and gentlemen, good morning.

2016 was an unusual year for Disneyland Paris.

There are three main things to consider:

First, the economical and geopolitical context had a negative impact on our revenues, which decreased by 7% over the period.

Next, as a result of these very negative financial results,

We had to record a significant impairment charge on our assets, in our consolidated financial statements under international accounting standards and in our statutory accounts under
French accounting standards or IFRS.

Lastly, The Walt Disney Company announced a 2-year waiver on the payment of royalties and  management fees as well as its support of a recapitalization plan for up to €1.5 billion to give us needed liquidity.

Before this recapitalization plan, TWDC also gave shareholders the opportunity, if they should wish, to sell their shares at a considerable premium.

I will come back to these points.

First the results:

Theme park attendance was down 10%, reflecting the 4-day parks closure following the events in Paris. Average guest spending was stable at €54, which reflects the success of our continued investment efforts in improving the guest experience.

Our hotel room night volumes were down 4% versus last year, as were our revenues from our hotels and Disney Village. Average spending per room was down €3 to €235.

In this difficult context, however, it is important to highlight the success of our recent rehabilitation of the Disney’s Newport Bay Club hotel. The hotel had been partially closed for renovation since November 2013. It reopened at full capacity on December 2015 and gained its 4th star in March 2016. Guest Satisfaction increased by 30 percentage points after this rehabilitation. And this refurbishment and repositioning allowed us implement a doubledigit price increase.

This demonstrates that our investment strategy is the right one and that it has already proven successful.

In FY2016, we pursued this strategy, notably as we approach the 25th Anniversary.

We are investing in technology, for example in online pre-arrival planning tools and mobile apps.

We are investing in our people. It is our Cast Members that deliver the Disney Magic to our guests.

Our Cast is one of our greatest assets.

Lastly, following the attacks in Paris, Brussels, and Nice we increased our investments in  security.

As a result of these investments, our costs increased by 5% in FY2016.

 I would now like to address the asset impairment charge we recorded this year. Our results were much lower in 2016, as a result of the very difficult context. Our company was negatively affected by the events in Paris. As a result of the unfavorable conditions that negatively impacted performances across the Parisian tourism industry, as well as our own financial results, we adjusted our long-term business plan to reflect FY16’s poor performance, particularly the early years of our plan.

This change in our plan confirms our need for additional resources to be able to pursue our strategy in the medium-term.

The impairment is the accounting result of this fact.

The impairment charge represents €565M (in international accounting standards): It is a normal accounting rule applied to all companies. If there is any indicator of impairment, such as a decrease in revenue, any company is required to perform a test on its assets.

This impairment test consists of comparing the carrying value of the Group’s assets to their recoverable value. The recoverable value represents the expected future performance of the group’s assets. If the recoverable value of the assets is lower than their carrying value, the Group records the difference as impairment.

For example: Say an asset is recorded at €100 in our accounts. if the sum of the future estimated cash flows of this asset reaches €90, we have to record a €10 impairment charge in our accounts to align the recoverable value to the value recorded in our accounts.

Each year, we prepare financial statements under IFRS international norms, and our statutory accounts are prepared under French accounting standards.

Tests are carried out on the basis of the same discounted estimated future cash flows. In Euro Disney S.C.A.’s statutory financial statements, the primary asset is its investment in the equity of Euro Disney Associés SCA, the owner Company of the Group’s assets which were impaired.

As a result of this impairment charge, the accounting value of Euro Disney Associés significantly  decreased, and we recorded a charge in the Euro Disney S.C.A. statutory accounts to reflect this decrease in accounting value.

I would like to make it clear that the impairment charges had no impact on the cash position  nor the cash flows of the Group.

I would now like to address the cash position. On September 30th, liquidity amounted to  €113 million, a decrease from the €136 million on 30 September 2015.

In this degraded environment, to provide us with the liquidity necessary to implement our strategy, TWDC has definitively waived the payment of two years of royalties and management fees. These waivers will eliminate the cash outflow and will not impact our debt.

In 2016 the Group recorded a net loss of €858 million. As a result of this considerable net loss, the equity of the company is less than one-half of the share capital. In compliance with the French Commercial Code, the Company has a legal duty to consult its shareholders on the pursuit of the Company’s activities, and therefore, a resolution will be submitted to you today. The company will then have 2 years to restore its financial situation. This recapitalization is nevertheless necessary in the short term, given the company’s financial situation.

It is in this context that TWDC, our main shareholder, is committed to support a recapitalization of up to €1.5 billion.

This considerable capital increase will come after a tender offer, which followed TWDC’s purchase of the majority of Kingdom Holding’s Euro Disney shares.

The tender offer for all the remaining outstanding Euro Disney shares will be at a price of €2 per share and will allow you, if you wish, to benefit from the same price as obtained by Kingdom Holding.

You will have the choice between selling your shares at a premium of 67% versus the stock price preceding the announcement, or participating alongside TWDC in the financial restructuration necessary for Euro Disney.

If, at the end of the tender offer, TWDC holds at least 95% of the capital, TWDC will immediately proceed to a mandatory buyout at the same price as the tender offer, followed by a delisting of Euro Disney S.C.A. from Euronext Paris.

A word on the provisional timeline for the offer TWDC filed the draft note to the AMF yesterday, for review. Euro Disney has filed its draft reply note, which includes the report of the independent expert hired by the Supervisory Board to ensure the fairness of the offer price for all shareholders.

Axel Duroux, Chairman of the Supervisory Board, will share the Board’s recommendations  with you.

The indicative timetable provides a tender offer period from April 26 to May 23 and a publication of he results on May 29.

The delisting, if it takes place, would be launched in June.

A dedicated hotline will be put in place, when the time comes, to answer your technical  questions about the offer.

Finally, I would like to give you a quick update on FY17 Q1.

For the first quarter, we recorded a 5% increase in our revenue to €354 million, as expected.  This increase reflects a higher attendance both in our parks and in our hotels, as we have recaptured a portion of the attendance lost following last year’s events in Paris, including the attendance lost during last year’s 4-day parks closure.

While Q1 FY17 results are encouraging and confirm our capacity to drive guest volumes in 2017, we must remain cautious in this still uncertain environment.

Thank you very much. I will now give the floor back to our Présidente Catherine Powell.

Source: Euro Disney S.C.A.

Posted in Disneyland Paris | 1 Comment

Transcript of Catherine Powell’s Euro Disney AGM speech made on 31 March 2017.


Here is a transcript of the speech Catherine Powell, President of Euro Disney S.A.S. made at last weeks Annual General Meeting of Shareholders held at Hotel New York in Disneyland Paris.


Euro Disney S.C.A. Annual General Meeting
March 31, 2017
Speech of Catherine Powell, Présidente, Euro Disney S.A.S.

Thank you Gilles.

And allow me to welcome you, ladies, gentlemen, dear shareholders, to your annual general  meeting.

I am very pleased to welcome you to our resort, for my first general meeting with you.

Thank  you for coming in such numbers. And I’m delighted to meet you.

It is an honour for me to be here as Présidente of the Euro Disney group.  I am very aware of  my  responsibility.  Disneyland  Paris  is  a  major  player  in  French  tourism,  the  number  one  tourist hub in Europe, with more than 320 million visits since it opened 25 years ago.

Allow me to introduce myself.

I started my career in media, making documentaries.

From  this first  experience,  I understood  the  importance  of developing good storytelling in  order to thrill the audience and communicate strong, sincere emotion. After that I joined the  BBC.  And  since  2004  I  have  been  working  for  The  Walt  Disney  Company:  this  is  where  I  realised  the  importance  of  a  perfect  understanding  of  the  consumer,  to  better  anticipate  their reactions, expectations and desires.

More recently, I led The Walt Disney Company for Australia and New Zealand.

There, I had 2 top  priorities:

Firstly: Putting the consumer at the center of the game;

Secondly: Adapting the Disney brand to the local culture.

Today,  I  want  to  apply  these  experiences  –  of  creative  power,  cultural  integration  and  business impact –  to the benefit of Disneyland Paris.

The park has never been so beautiful. This is thanks to your support and the recapitalisation  plan that we implemented in 2015.

This  plan  was  essential.  It  has  allowed  us  to  invest  for  the  long  term,  and  t o  continue  to  pursue our development.

Above all it has enabled us to initiate a renovation plan, which began 2 years ago, affecting  10 major attractions.

To  date,  6  attractions have  been  entirely  renovated;  many iconic park features  have been  transformed; and no less than 4 new shows have been designed.

I am extremely proud of our teams’ creative and innovative work.

I also pleased with the satisfaction expressed by our guests.

This would not have been possible without you.

And our efforts are not limited to the parks.

The changes are visible in our hotels too: ‘Disney’s Newport Bay Club’ completed its upgrade  in 2016 by obtaining a 4th star. We’ve also begun renovation of “Disney’s Hotel Cheyenne.”

Let’s take a look at some pictures of these achievements.


As you can see, this renovation plan was ambitious, and it has proven successful. 2016 got  off to a great start: visitor numbers were up, and all our operational indicators  –  spending  per guest; Hotel occupancy and average spending per room – were also on the rise.

For  this, I would  like to pay tribute  to  my predecessor,  Tom  Wolber  and highlight the  key  role  he  played  over  the  last  2  years.  Tom  led  the  Group  during  the  recapitalization  plan,  while simultaneously taking on this unprecedented renovation program. It is thanks to Tom,  that the park is so beautiful today!

I  would  also  like  to  thank  Virginie  Calmels,  who  always  acted  with  determination  and  sincerity  as  Chairwoman  of  the  Supervisory  Board  for  4  years.  She  was  a  very  active  participant and contributed much over the years. We wish her much success in her future  professional projects and political endeavors.

It is with pleasure that we now welcome Axel Duroux to lead the Board. He knows the Group  well, having been on the board since 2013. He has taken on his new role as Chairman in a  most constructive and positive way.

But… 2016 proved to be a difficult year for the country.  Everyone involved in tourism has  been impacted, and Euro Disney was not spared. I would like to revisit these facts in more  detail.

A few days after the attacks of November 13, 2015, we made the decision to close our parks  for 4 days in respect of the national mourning period.

Nonetheless, we initially managed to limit the impact of these events. The terrorist attacks in  Brussels in March, and the July attack in Nice changed everything.

The business environment contracted again, and in a very brutal way. We saw a decline in  reservations, and experienced many cancellations. Terrorism created a feeling of insecurity,  which particularly affected the tourism industry.

Other factors, such as the strikes in the spring and floods in the Paris region, made access to  our park very difficult, and affected our visitation numbers.

Our  2016  annual  performance  reflects  this  difficult  context,  with  a  very  significant  loss,  which Mark Stead will expand on later.

We cannot be satisfied with these results. The gravity of the situation calls on each one of us  to take responsibility and work together to secure the future of our resort and its staff. It is  in  this  context  that  The  Walt  Disney  Company has  renewed  its  support  for  the  group  and  France,  pledging  to  support  a  recapitalization  to  meet  the  Group’s  financial  needs.  We  welcome this development, which  is positive for the company. This project will support the  future  of  the  Euro  Disney  Group  and  enable  our  on-going  investments  in  France,  as  the  number one European tourist destination.

Dear  shareholders,  for  a  long  time  we  have  shared  a  special  relationship.  I  want  it  to  continue even if Euro Disney is delisted from the stock exchange. I have had the opportunity  to discuss this with some of you.

And  I  can  announce  today  that  the  registered  Shareholders  Club  members  will  see  their  benefits  maintained for a period of 10 years.

I now hand it over to Mark Stead –  I will be back after he has spoken.

[Speech of Mark Stead]

Thank you, Mark.

Yes,  2016  was  a  difficult  year.  The  economic  and  political  situation  was  in  turmoil.  And  tourism   has   also   changed   profoundly.   Today   it   is   shaped   by   the  new   aspirations   of  consumers, as they look for new and original ideals.

These  consumers  want  their  choices  to  have  meaning  and  to  live  unique  and  authentic  experiences. This must be the starting point for our thinking, and our action!

In  this  context,  we  cannot  continue  to  operate  without  changing  our  approach.  We  must  reinvent Disneyland as we look towards 2020!

This is the meaning of the new initiative that I have already shared and launched with our  teams. Today I want to take the time to talk to you about this approach.

It is based on four strategic priorities:

•      One:  Placing  our  customers  at  the  heart  of  all  our  thinking,  at  the  heart  of  all  our  strategies, at the heart of all changes.

•      Two: Building on excellence in service and on the commitment of our Cast Members. This  is what makes the Disney difference.

•      Three:  Being  a  financially  solid  company.  For  this,  we  need  to  adapt  our  culture,  our  structure and our commercial approach to be bolder and more agile.

•   Lastly: Continuing to capitalize on the strength of our brand and our franchises.

We have considerable creative potential!

In addition to Disney, we have Marvel,  Pixar, and Star Wars! “Season of the Force,” which  launched last January, is a perfect example!

To succeed, we must respond and be perceived as more innovative, more enterprising, more  agile and more digital!  Yes, this is an ambitious strategy and one that will take time; and let  me  add  that  I  have  engaged  the  whole  company  and  the  steering  committee  in  that  direction.

We are determined, and we are confident in our ability to implement it.

I spoke of 2020, but let’s come back now to 2017.

2017 is – as I’m sure you know – the 25th anniversary of your park!

Anniversaries  are  great  opportunities  to  reconnect  with  our  guests  and  to  attract  new  customers. Our attendance has always increased during these anniversaries.

Take a look at all the festivities we have planned for this celebration.


This year we are celebrating not only the 25th anniversary of our resort, but also the 30th  anniversary of the agreement signed with the French state. This partnership represents the  first stone in the Disneyland Paris structure, which laid the foundation of our development.

It  is  built  around  a  shared  ambition:  to  make  Disneyland  Paris  the  reference  in  European  tourist  destinations  and  to  contribute  to  the  influence  of  Paris,  and  more  generally,  of  France.

In  my  meetings  with  our  elected  officials,  I  have  seen  first-hand   how  the  destiny  of  Disneyland Paris, Paris and France are intertwined.

All three were represented at our celebration ceremonies: from President François Hollande  to the Chairwoman of the Regional Council of Ile-de-France, Valérie Pécresse, and including  representatives of the European Commission and the Mayor of Paris, Anne Hidalgo.

France  is  a  wonderful  country  that  the  whole  world  dreams  of  visiting.  For  30  years,  Disneyland Paris has taken strength from the wealth of its heritage,  its cultural diversity and  the energy of its people.

It  seems  natural  to  us,  in  return,  to  contribute  to  the  economic,  social  and  societal  development of the region.  It is in this spirit that we conducted a contribution study, with  the French government, that enables us to measure this value creation.

Three figures highlight the findings of this contribution study:

–  First: we have had 320 million visitors over the last 25 years, which makes Disneyland Paris  the number one tourist destination in Europe

–  Second: 68 billion euros of added value have been generated by Disneyland Paris for the  French economy

– Third: 56,000 permanent jobs have been created directly and indirectly by Disneyland Paris.

We have a unique public-private partnership in Europe, which will continue into the future.

More  than  ever,  Disneyland  Paris  is  the  driver  of  the  tourism  of  tomorrow.  And  we  are  already  demonstrating  this,  with  the  upcoming  opening  of  “Villages  Nature”,   a  next- generation  tourism   project   designed   with  the   Pierre   et   Vacances   Group.   This   tourist  destination  will  offer  an  unprecedented  range  of  “green”  holidays  based  on  the  quest  for  harmony between Man and Nature. And it will bring lasting and sustainable strength to the  Disneyland Paris division, spearheading tourism policy in France.

Ladies, gentlemen, dear shareholders,

in conclusion,  let me convey to  you  the  sense of  honour  and  responsibility that motivates  me.

I took the reigns of your group more than 6 months ago already.

Together  with  the  Steering  Committee,  we  have  established  a  diagnosis  and  defined  a  strategic vision for 2020. We have shared it with the Supervisory Board and all the group’s  teams.

Collectively, we initiated an ambitious but realistic program.

Believe me, I am determined.

And,   supported   by   the   incredible   combination   of   talent   within   your   Group,   and   the  reaffirmed  commitment  of  The  Walt  Disney  Company,  I  am  confident  in  our  ability  to  improve our performance.

We are also fully committed to our responsibilities in promoting France as a destination.

It is also a tremendous opportunity to reinvent the tourism of tomorrow!

And who better than us to meet these challenges?!

We have a great power of attraction; we have unique creative skills; we have a spectacular  capacity for innovation; and we have a park that is now transformed to celebrate its 25th  birthday!

Ladies, gentlemen, dear shareholders,

Thank you very much.

Source: Euro Disney S.C.A.

Posted in Disneyland Paris | 1 Comment