Hiding Poor Results With Optimism – The 2016 Euro Disney AGM

The Euro Disney S.C.A. Shareholders Annual General Meeting was held on 17 February 2016 and fellow Shareholder Martin Walker was in audiance and has kindly sent us the following report.

Hiding Poor Results With Optimism by Martin Walker.

On Wednesday 17th February 2016, Euro Disney SCA held it’s Annual General Meeting. Shareholders from across the world converged on Disney’s Hotel New York at the Disneyland Paris resort, with many representatives from TWDC taking up the first two rows.

Upon arriving at the resort, it was immediately clear that recent tragic events in nearby Paris had affected the visible security operations. Airport style metal detectors are now in place at the bag check area and additional security guards with hand metal detectors also check some guests as they arrive and enter through the line for those without bags.

Upon entering the Hotel New York, every guest was again searched by security guards with hand metal detectors, and shareholders directed towards the conference room where a additional temporary security point had been established for the meeting. This comprised of a bag scanner, more guards with hand metal detectors, a dog and his handler then finally another bank of temporary metal detectors.

This security was noticeably more than the meeting last year which was held in the centre of Paris only a few days after the Charlie Hebdo attacks January. However with it once again being held on Disney property this year, the management will have had much more control this year over every detail and thus checkpoint. That said, the venue was secure and all Shareholders and guests were as safe as could be. 

   

 
The meeting began with Gilles Dobelle, Managing Vice President, General Council, welcoming the attendees and introducing the panel (sat from left to right): Virginie Calmels, Tom Wolber, Mark Stead and himself. A large 20 foot screen towered behind the panel showing a picture of the iconic Sleeping Beauty Castle.

  

 

Tom Wolber, President of Euro Disney SAS, was the first to speak and, after apologising in advance for his accent, he this year spoke entirely in French with the exception of responding during the Question and Answer session at the end of the meeting, when he replied in English.

 

Mr Wolber started by saying; “I have been with you a little more than a year…It has been a totally amazing experience…”, before highlighting the 2015 financial year’s results. This included 600,000 more visitors to the parks on the previous year, a 4% increase in hotel occupancy on 2014, over 1 million people watching the Frozen Sing Along show in the Chaparral Theatre, the fact that the recapitalisation had been; “… a great success.” and then showing the Shareholders a video looking back at the past year.

 

The overview given of the past financial year by Tom Wolber was a very positive one which he was keen to point out that a lot of investment had been made in the parks, hotels and Cast Members – much of which was financed through last year’s recapitalisation. He then went on to say;

 

“Bringing the magic to life and making each guests’ experience a special one makes me truly proud…

 

“We are investing in our parks and hotels. To date over 3,700 have been fully renovated…

 

“The Cast Members are what really make the difference. We are going to continue investing in our Cast Members who bring the magic to life day in, day out.”

 

After another short video was shown to the room about the innovative offerings shared with guests in the last year. After which Tom Wolber stated that the strategy of investing in guest experience is delivering results. He said that it is the right one and that they will remain vigilant on their costs.

 

It was then mentioned that the attacks on Paris in November meant that the parks closed for 4 days which was in line with other tourist attractions throughout France. This clearly had a negative impact upon the financials, however they have managed to limit the impact with “very encouraging results” for the first quarter of 2016.

Next Mark Stead, Chief Financial Officer, spoke briefly about the 2015 financial results, concentrating on the increase in hotel occupancy and an increase of Guest spend per head of €3.06 to €53.66 to a record high. He noted that the first quarter of 2016 has so far seen another increase of a further €2 per head.

 

Again, it was mentioned by Mr Stead this time that the recapitalisation was successfully completed and that they are aware that the strategic decisions made are impacting the financials but that it will help long term and is delivering results.

 

Tom Wolber then returned to the podium to talk about the refurbishment program and how this major initiate will help Disneyland Paris prepare for the 25th Anniversary in 2017. After this, a third and final video presentation was shown about he attractions that have had, are currently having or will soon receive a facelift. It was then that they acknowledged that competition within the theme park industry within Europe is increasing and stated that they as a company need to do everything they can to remain the leader.

  

Next, Virginie Calmels, Chairman of the Supervisory Board, spoke very positively about her view on the long term performance of the parks. She said that the decision to reduce discounts and increase investments is helping to increase the average guest spending. It was noted that the board were very concerned that the financial position of the company had not improved over the past 12 months and that she was disappointed with an increase in operating expenses. It was recommended that the managers remain vigilant with operating costs and keep those to a minimum.

This concluded the information from the panel and a Questions and Answers session was opened. Over a dozen Shareholders took the opportunity to air their concerns about the running of the company and the consistent losses by Euro Disney SCA year upon year.

Those who took the opportunity to ask questions often began with a long monologue as to why they think the company is (in their eyes) failing in their duty to look after the best interests of the Shareholders. The Shareholders included representatives of CIMA (who are currently taking legal action against Euro Disney SCA) and APPAED who are a vocal opposition to many of the decisions made by the board. They asked for all small Shareholders to abstain when asked to vote for all of the resolutions later in the meeting.

One Shareholder wanted to know why he has heard the same promises over the past 20 years and predicted that there would be the need for yet another recapitalisation in 2024. This was answered by Mark Stead who states that there have been many crises that the company and the world has suffered since opening in 1992. Each time they have looked at what they can do better for the resort. He then said that they are doing everything necessary to make the company profitable and that they want to take the company into long term growth.

Another Shareholder was unhappy at the level of security they (as a Shareholder) had to go through before entering the AGM. Tom Wolber replied to this criticism, saying that; “…Keeping our guests safe is the most important thing er can focus on. Everybody is treated the same.”

The following Shareholder to ask a question (about disabled access to the parks and resort), accused the panel of being like politicians; “…Full of hot air”. He was also disgruntled about the increased security. Tom Wolber replied; “I am sorry. I will not ever change anything. We cannot waiver to the security commitment to our guests or Cast Members. We get many good comments from guests about it.”

One Shareholder asked if Disneyland Paris would consider doing some kind of voucher that could be used in the shops and resort. This we were told they are currently looking at and it will be implemented soon.

A Shareholder asked a question in regards to the on going European Commission Price Fixing investigation, asking  if they geoblock users of their websites sites.

The reply was: They have cooperated fully with the investigation. No. They do not employ any form of geoblocking. They have a base price which is the same in every country. Where it differs is with promotions – offering different things at different times to different countries – to suit the needs. Such as school holidays etc. 

They said that if any guest finds a better offer on another country’s site then simply by asking the booking line, they will honour that price. This has always been the way and will continue to do so.

One question that was noticeable by its absence was the fact that over €800,000 has been lost to credit card fraud in the past 12 months. Not one Shareholder questioned why this was allowed to happen as there should be security protocols in place to prevent such happenings. If they are not, why not? If they are, then what went wrong and what will be changed to stop a repeat loss in the future?

The meeting finished with voting for resolutions, all of which were passed without issue. Full details on what was voted on can be found here: http://corporate.disneylandparis.com/CORP/EN/Neutral/Images/uk-2016-Resolution-Booklet.pdf.

The AGM itself was presented by the panel in a very positive manner, constantly looking at the future and gleaning the positive from the results – despite a loss of €101.9 million. This has been the way for many years now and still the company is arguably in no better position than it was before. However they seem steadfast and united that the way to turn the results around is to invest more in the parks, hotels and Cast Members with Guest Experience and satisfaction being the key areas to concentrate on. Is this the right attitude for them to have, or are they simply hiding poor results with optimism?

To see the 2015 figures in detail, you can access the full 2015 Reference Document in either English or French as shown below.

English
http://corporate.disneylandparis.com/CORP/EN/Neutral/Images/uk-Reference-Document-2015.pdf

French
​​http://corporate.disneylandparis.fr/CORP/FR/Neutral/Images/fr-Document-de-Référence-2015.pdf

Photo Credits: Martin Walker, DLRP Express and ED92.

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3 Responses to Hiding Poor Results With Optimism – The 2016 Euro Disney AGM

  1. Pieter says:

    Did they say anything about the European Commission complaint about price discrimination? The fine would be huge if that turns out to be true.

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  2. Salon Mickey says:

    That ‘issue’ has been passed to the French Government to investigate further.

    Like

  3. Salon Mickey says:

    A question was asked about Geoblocking and the article has been updated to reflect this.

    Like

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