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.
EURO DISNEY S.C.A.
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.
UPDATE ON RECENT AND UPCOMING EVENTS
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
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