EURO DISNEY S.C.A. Fiscal Year 2014 First Half Results

Euro Disney S.C.A.  has announced its financial results for the first six months of the 2014 Fiscal Year for Disneyland Paris, the full report  can be found here.
 
Commenting on the results, Philippe Gas, Chief Executive Officer of Euro Disney S.A.S, said:
Our first semester results were again marked by the continued economic softness in Europe, as well as a shift of the Easter vacation period into the third quarter. These elements drove lower resort volumes, which impacted our results. However, we continue to deliver on our strategic priorities with growth in average guest spending and a 6% increase in overall guest satisfaction rate compared with the first semester last year. This demonstrates the relevancy and consistency of our strategy of investing in the guest experience.

Our development efforts continue with a brand new spring celebration and the opening of our unique new family attraction inspired by the hit Disney•Pixar movie, Ratatouille: l’Aventure Totalement Toquée de Rémy. This new content reflects our commitment to invest in our business and the guest experience to drive long-term growth of Disneyland Paris.”
 
 

EURO DISNEY S.C.A. Fiscal Year 2014
Reports First Half Results
Six Months Ended March 31, 2014


Resort revenues decreased 5% reflecting lower theme parks attendance and hotel occupancy linked to the continued economic softness in Europe and the shift of the Easter holiday period into April


Average spending per guest increased 2% in theme parks as the Group continues its strategy of improving the quality of the resort and the guest experience


Net loss increased by €18 million reflecting lower revenues, partially offset by a decrease in volume- related expenses and other costs


Launched the Swing into Spring festival in April and will open the new Ratatouille-themed attraction in July

Resort operating segment revenues decreased 5% to €530.8 million from €561.1 million in the prior-year period.

Theme parks revenues decreased 4% to €298.3 million from €311.4 million in the prior-year period due to a 6% decrease in attendance to 6.3 million, partly offset by a 2% increase in average spending per guest to €46.83. The decrease in attendance primarily reflected fewer guests visiting from France, the United Kingdom and Spain. The increase in average spending per guest was due to higher spending on admissions and merchandise.

Hotels and Disney Village® revenues decreased 6% to €214.5 million from €228.2 million in the prior-year period, resulting from a 5.7 percentage point decrease in hotel occupancy to 72.3% and a 3% decrease in Disney Village revenues. The decrease in hotel occupancy was due to 59,000 fewer room nights sold compared to the prior-year period, driven by lower business group activity as well as fewer guests visiting from Spain and the Netherlands. Average spending per room remained stable, reflecting higher daily room rates offset by lower spending on food and beverage, and merchandise.


Other revenues decreased by €3.5 million to €18.0 million from €21.5 million in the prior-year period, mainly due to lower sponsorship revenues.

Real estate development operating segment revenues decreased by €4.1 million to €2.5 million, from €6.6 million in the prior-year period. This decrease was due to a larger land sale closed in the prior-year period than the land sale closed in the First Half. Given the nature of the Group’s real estate development activity, the number and size of transactions vary from one year to the next.

Direct operating costs decreased 2% compared to the prior-year period due to reduced costs associated with lower resort volumes and real estate development activity, as well as a higher tax credit recorded as a reduction of labor costs (Crédit d’Impôt pour la Compétitivité et l’Emploi, “CICE”). These decreases are partially offset by labor rate inflation.

Marketing and sales expenses decreased 8% compared to the prior-year period driven by a change in the timing of marketing and sales activities.

General and administrative expenses increased 5% compared to the prior-year period, primarily driven by the costs of a multi-year program to improve employee facilities.

Financial income decreased by €0.2 million compared to the prior-year period.
Financial expense decreased by €1.0 million compared to the prior-year period mainly due to higher interest expense capitalized as part of the construction cost of the new attraction based on the Disney•Pixar movie Ratatouille

Free cash flow used for the First Half was €123.7 million compared to €72.0 million used in the prior-year period.

Cash flow used in operating activities for the First Half totaled €56.7 million compared to €19.8 million used in the prior-year period. This decrease resulted from higher working capital requirements as well as decreased operating performance during the First Half.


Cash flow used in investing activities for the First Half totaled €67.0 million compared to €52.2 million used in the prior-year period. This increase included investments related to the new attraction themed after the Disney•Pixar movie Ratatouille, which is scheduled to open in July.


Cash flow generated by financing activities totaled €99.8 million for the First Half compared to €26.4 million generated in the prior-year period. During the First Half, the Group drew an amount of €100.0 million from the €250.0 million standby revolving credit facility granted by The Walt Disney Company (“TWDC”)1. This amount can be repaid at any time. In the prior-year period, the Group drew €30.0 million from this standby revolving credit facility.


In addition, the Group is required to repay €11.4 million of its long-term loans from TWDC at the end of fiscal year 2014, in accordance with the scheduled maturities.

Source: Euro Disney S.C.A.

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