Euro Disney S.C.A Fiscal Year 2016, 1st Half Results published.

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On Tuesday 10 May  2016, Euro Disney S.C.A. the operators of Disneyland Paris published their results for the first half of Fiscal Year 2016, which ended on March 31, 2016.   The high lights are below and the full results can be found here.

EURO DISNEY S.C.A.
Fiscal Year 2016 Reports First Half Results
Six Months Ended March 31, 2016


Despite the November events in Paris, revenues increased €13 million to €604 million mainly due to higher guest spending, partially offset by lower theme parks attendance.

The costs and expenses increased €54 million driven by the Group’s continued investment in the guest experience, planned labour rate inflation and incremental security costs.

The net loss increased by €65 million to (€184 million); excluding a gain recorded in the prior-year period for the early termination of a lease agreement, the net loss would have increased by €40 million.

Commenting on the results, Tom Wolber, Président of Euro Disney S.A.S., said:

“In the difficult context of the November events in Paris, we recorded a significant increase in net loss for the first semester. The strong demand we saw in the first weeks of the period and the benefit from the shift of the Easter vacation period into the second quarter for certain key markets were more than offset by the softness in visitation caused by these events.

Nevertheless, total revenues for the period increased driven by higher guest contribution and convention business.

Costs and expenses increased over the prior year, reflecting the impact of planned investments in the guest experience in preparation for next year’s 25th Anniversary celebration, labour rate inflation and additional security measures.

Although these investments will continue to weigh on our cost base and cash, we believe they are essential to the long-term success of Disneyland Paris.”

 

Seasonality

The Group’s business is subject to the effects of seasonality and the annual results are dependent on the second half of the fiscal year, which traditionally includes the high season at Disneyland® Paris. Consequently, the operating results for the First Half are not necessarily indicative of results to be expected for the full fiscal year 2016. In addition, results for the First Half have been favourably impacted by a shift in Easter vacation period from the second semester in certain of the Group’s key markets.

 

Revenues by Operating Segment

Revenues increased 2% to €600.3 million from €591.1 million in the prior-year period.
Theme parks revenues were relatively flat at €339.7 million compared to €340.4 million in the prior-year period, with a 4% decrease in attendance, offsetting a 4% increase in average spending per guest.

 
The decrease in attendance was due to fewer guests visiting from France, the Netherlands and the United Kingdom reflecting the 4-day closure of the theme parks, partially offset by more guests visiting from Spain and Germany. The increase in average spending per guest was due to higher average spending on admissions, food and beverage and merchandise.

 
Hotels and Disney Village® revenues increased 3% to €239.3 million from €232.1 million in the prior-year period. This increase resulted from a 1.0 percentage point increase in hotel occupancy, a 4% increase in revenues at Disney Village and a 1% increase in average spending per room. The increase in hotel occupancy resulted from 13,000 additional room nights compared to the prior-year period due to more guests from Spain, France and Germany, partially offset by fewer guests from the United Kingdom.

These results also reflected a higher availability of hotel room inventory after a temporary reduction related to the renovation of Disney’s Newport Bay Club®, with approximately 500 rooms out of order from November 2013 to December 2015.

Booking cancellation fees contributed to the increase in other revenues which went up €2.7 million to €21.3 million from €18.6 million in the prior-year period.


Real estate development operating segment

revenues increased by €3.5 million to €4.1 million, from €0.6 million in the prior-year period. This increase was due to higher land sale activity than the prior-year period.

Given the nature of the Group’s real estate development activity, the number and size of transactions vary from one period to the next.


Costs and Expenses

Direct operating costs increased 7% compared to the prior-year period. This increase was mainly due to costs related to the enhancement of the guest experience and labour rate inflation.

In addition, the Group incurred incremental security costs and costs associated with higher special events and real estate activities. These incremental security costs are expected to be sustained.
Marketing and sales expenses increased 6% compared to the prior-year period due to enhancements to online booking and information capabilities and incremental market segmentation efforts, as well as inflation.

General and administrative expenses increased 12% compared to the prior-year period driven by labour rate inflation as well as technology initiatives.


Net Financial Charges

Net financial charges decreased by €6.1 million compared to the prior-year period due to lower interest expense on borrowings as a direct result of the recapitalization and debt reduction plan implemented during fiscal year 2015 (the “Recapitalization Plan”).

 

Net Loss 

For the First Half, the net loss of the Group increased by €65.0 million to €183.8 million compared to €118.8 million for the prior-year period. The prior-year period included a €24.5 million gain for the early termination of a lease agreement.


Cash Flows

Cash and cash equivalents as of March 31, 2016 were €101.9 million, down €146.7 million compared with September 30, 2015.

Free cash flow used for the First Half was €144.0 million compared to €66.6 million used in the prior-year period.

Cash used in operating activities for the First Half totalled €55.4 million compared to €16.3 million used in the prior-year period. This variance resulted from decreased operating performance during the First Half, partially offset by lower working capital requirements, including a change in the timing of payment of royalties and management fees to quarterly from annually in the prior-year period, which had a positive cash flow impact.

Cash used in investing activities for the First Half totalled €88.6 million compared to €50.3 million used in the prior-year period. This cash flow was composed of investments to enhance the guest experience in preparation of the upcoming celebration of Disneyland® Paris’ 25th Anniversary and cash advances paid by the Group to Les Villages Nature de Val d’Europe S.A.S.
Cash used in financing activities totalled €2.7 million for the First Half compared to €270.7 million generated in the prior-year period. The prior-year period included net cash inflow from the Recapitalization Plan.

As of March 31, 2016, the Group still has a €350 million undrawn revolving credit line available from The Walt Disney Company (“TWDC”).

 

UPDATE ON RECENT AND UPCOMING EVENTS

Catherine Powell named Président of Euro Disney S.A.S.

On April 12, 2016, the Company announced the nomination of Catherine Powell to assume the responsibilities of Président of Euro Disney S.A.S., effective in July.

Catherine Powell replaces Tom Wolber, who will return to the United States to take on operational responsibilities of Disney Cruise Line at a critical time for that business. Disney recently announced it is adding two additional ships to the Disney Cruise Line fleet. In the meantime, Tom and Catherine will transition the responsibilities to ensure continued commitment to the Group’s long term strategic priorities.

For further information, please refer to the press release available on the Company’s website.

 

Continued Investment in Guest Experience

In February 2016 the Group launched The Forest of Enchantment: A Disney musical adventure in the Disneyland® Park. In this new show, Disney characters star live on stage, performing songs from legendary films and inviting the audience to discover new worlds as if turning the pages of a book.

In addition, the Frozen Sing-along show will return in June at the Disneyland Park and a new production, Mickey and the Magician, will launch at the Walt Disney Studios® Park in July.

During the First Half, the Group completed the renovation of Disney’s Newport Bay Club® increasing its standard to a 4-star hotel. The Group continued the implementation of an ambitious program to refurbish some of its major attractions in preparation of the upcoming celebration of Disneyland® Paris’ 25th Anniversary in 2017. These refurbishments included “it’s a small world”, which re-opened to the public in December 2015, as well as Big Thunder Mountain and Star Tours, which are scheduled to re-open in January 2017 and March 2017, respectively.

 

Evolution of TWDC’s Ownership in the Company’s Share Capital

Following completion of the final step of the Recapitalization Plan on November 17, 2015, EDL Holding Company, LLC, Euro Disney Investments S.A.S. and EDL Corporation S.A.S., three wholly owned subsidiaries of TWDC, together owned 600,922,335 of the Company’s shares, (including 10 shares owned by EDL Participations S.A.S., a wholly owned subsidiary of EDL Holding Company, LLC) , representing 76.71% of the Company’s share capital and voting rights.

For more information on the Recapitalization Plan, please refer to the press releases and other related documents which are available on the Group’s website .

 

DEFINITIONS

The Group operates Disneyland® Paris, which includes: the Disneyland® Park, the Walt Disney Studios® Park, seven themed hotels with approximately 5,800 rooms (excluding approximately 2,700 additional third-party rooms located on the site), two convention centers, the Disney Village® , a dining, shopping and entertainment center, and golf courses. The Group’s operating activities also include the development of the 2,230-hectare site, half of which is yet to be developed. Euro Disney S.C.A.’s shares are listed and traded on Euronext Paris.

EBITDA corresponds to earnings before interest, taxes, depreciation and amortization. EBITDA is not a measure of financial performance defined under IFRS, and should not be viewed as a substitute for operating margin, net profit / (loss) or operating cash flows in evaluating the Group’s financial results. However, management believes that EBITDA is a useful tool for evaluating the Group’s performance.

Free cash flow is cash generated by operating activities less cash used in investing activities. Free cash flow is not a measure of financial performance defined under IFRS, and should not be viewed as a substitute for operating margin, net profit / (loss) or operating cash flows in evaluating the Group’s financial results. However, management believes that Free cash flow is a useful tool for evaluating the Group’s performance.

Theme parks attendance corresponds to the attendance recorded on a “first click” basis, meaning that a person visiting both parks in a single day is counted as only one visitor.

Average spending per guest is the average daily admission price and spending on food, beverage and merchandise and other services sold in the theme parks, excluding value added tax.

Hotel occupancy rate is the average daily rooms occupied as a percentage of total room inventory (total room inventory is approximately 5,800 rooms).

Average spending per room is the average daily room price and spending on food, beverage and merchandise and other services sold in hotels, excluding value added tax.

 

 

 

 

 

 

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Catherine Powell named Président of Euro Disney S.A.S replacing Tom Wolber

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Euro Disney S.C.A. today announced the nomination of Catherine Powell to the position of Président of Euro Disney S.A.S., the management company of both Euro Disney S.C.A., the holding company, and Euro Disney Associés S.C.A., the operator of Disneyland® Paris.

Catherine Powell will replace  Tom Wolber, who will return to the United States to take on operational responsibilities of the Disney Cruise Line.

“We are thrilled to welcome Catherine to Disneyland Paris,” said Karl Holz, president of New Vacation Operations and Disney Cruise Line. “Catherine has held a variety of senior leadership roles throughout the world for Disney, including in Australia and Europe, and has proven to be an exceptional leader who has the versatility and experience needed to lead the continued success of Disneyland Paris.”

Powell replaces Tom Wolber, who will return to the United States to take on operational responsibilities of Disney Cruise Line at a critical time for that business. Disney recently announced it is adding two additional ships to the Disney Cruise Line fleet. “Tom’s knowledge of shipbuilding is unparalleled, as he previously oversaw a number of complex expansion projects including the successful launches of the Disney cruise ships the Disney Wonder, Disney Dream and Disney Fantasy.

We are grateful for his many contributions in Paris and are anxious to have him back at the Cruise Line to oversee our latest expansion,” said Holz. “On behalf of my fellow Supervisory Board members, I would like to thank Tom for his thoughtful leadership of Euro Disney and his dedication to the resort, its Cast Members and all of the Guests who have visited Disneyland Paris,” said Virginie Calmels, chairman of Euro Disney Supervisory Board. “We are excited to welcome Catherine back to Europe and especially to Euro Disney and look forward to her continued success in her new role.”

Catherine Powell will begin her new assignment in July 2016. In the meantime, Tom and Catherine will transition the responsibilities to ensure continued commitment to the company’s long-term strategic priorities.

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British expat Catherine who studied at Oxford University currently serves as the company’s Managing Director for Australia and New Zealand and has more than 12 years of experience in global roles throughout Europe, the Middle East and Asia. In her most recent role, she has been responsible for leading all of Disney’s business divisions, overseeing global franchises, and expanding existing and new business in the region.

Powell previously led the Media Distribution division of The Walt Disney Company in Europe, Middle East and Africa. Previously, she served as Disney Media Distribution’s senior vice president, Sales – UK, Ireland, Nordic, Benelux and Israel; and prior to that, the executive director – Sales, UK and Ireland. Before joining Disney, Catherine worked for BBC Worldwide for seven years, where she held various senior TV sales roles across territories including Central and Eastern Europe, the Middle East, Germany and Spain/Portugal.

Powell is a Disney veteran who as Senior Vice President and General manager of Disney Media Distribution for The Walt Disney Company EMEA,  pioneered a single Walt Disney Company approach to delivering content across platforms.

She set pan-regional strategies for Disney’s branded channels, content and digital distribution for movies, television programming, games, music, e-books and apps. The company said Powell has a deep understanding of all of the Walt Disney Company’s brands, including Disney*Pixar, ABC Studios, Marvel and Disney.

As Managing Director for The Walt Disney Company in Australia and New Zealand, Catherine Powell reported to the Chairman of Walt Disney International, a company with revenues of $45 billion. She is responsible for driving the company’s strategy, coordinating and leading all company business divisions, overseeing global franchises, expanding existing businesses and seeking out new business opportunities.

In her time with Disney, Catherine has been at the forefront of change. She has promoted implementation of the company’s digital strategy and ensured Disney has kept pace with the latest technical developments. Catherine understands where the media and entertainment industry is now, where it is headed and the critical intersection of content and creativity with technology and platforms.

Catherine has demonstrated consistent leadership throughout her career, rising quickly through the ranks at the BBC and The Walt Disney Company. She started at the BBC as a sales executive and, within six years was leading Sales in the Middle East and Eastern Europe, including the development of local productions within the region. Catherine then moved to Disney, leading Sales in the UK and Eire before moving on to become General Manager, Media Distribution, for the region.

Catherine has mentored many women at all stages of their careers. Half of her direct reports are women, with many of those running major commercial areas for the company. Catherine is a member of the  CEO Forum in Austrailia and regularly speaks at women-focused events in the country.

Karl L. Holz appointed to the Euro Disney Supervisory Board

 
During a meeting of the Supervisory Board of Euro Disney SCA held on 28 May 2015, the “Board”  approved the appointment of Karl L. Holz as a new  member, succeeding Thomas O. Staggs who stepped down following his promotion to Chief Operating Officer of The Walt Disney Company. 

This appointment will be submitted for ratification at the next annual Shareholders meeting of Euro Disney SCA.

Mr. Holz began his career with The Walt Disney Company’s Parks & Resorts  in 1996 and has held various leadership positions including serving as President and Chief Executive Officer of Euro Disney SAS from 2005 to 2008.

Earlier in his tenure with Disney, Holz served as senior vice president of operations at Walt Disney World Resort before being promoted to president of the Disney Cruise Line. In 2004 Holz became chief operating officer at Euro Disney SCA, and in May 2005 was promoted after André Lacroix resigned.

Born in Hinzweiler, Germany, he is married to his college sweetheart, Wendy. Both are graduates of SUNY Fredonia, class of 1973 and they have two children.

Since 2009, he has-been President of  New Vacation Operations and Disney Cruise Line for Walt Disney Parks and Resorts Worldwide.

Karl L. Holz is the current President for Disney Cruise Line as of February 14, 2009. Holz was moved back to his former role as part of the corporate merger of Disney Cruise Line and New Vacation Operations.

Holz oversees four cruise ships, the Disney Magic, Disney Wonder, Disney Dream, and the Disney Fantasy along with Disney’s private Island Castaway Cay. His responsibilities for DCL include shipboard operations, purchasing and logistics, entertainment, programming and operations integration, risk management, marine and technical operations and shoreside travel operations.

TWDC increase ownership to 78.8%

It was announced today that The Walt Disney Company now own 616,669,469 shares in Euro Disney S.C.A. taking their ownership to a record high of 78.8% of Disneyland Paris.

Company                                Shares        %

The Walt Disney Company              616,669,469   78.80
(EDL Holding Company LLC)
Kingdom Holding Company               38,976,490    4.98
(HRH Prince Alwaleed) 
Invesco Asset Management Ltd.         21,105,711    2.69
Morgan Stanley & Co International     19,627,098    2.51
Ledbury Capital Partners LLP           8,109,570    1.04
Invesco Advisers, Inc.                 4,787,207    0.61
GAM London Ltd.                        2,813,640    0.36
State Street Global Advisors Ltd.        193,515    0.18
Euro Disney S.C.A.                       584,466    0.075
Norges Bank Investment Management        516,124    0.066

GO ETF Solutions LLP                     169,206    0.022




Many thanks to  APPAED (Association des Petits Porteurs d'Actions EuroDisney) for this data.

Euro Disney shareholding as of 20 April 2015

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It’s always interesting to know the share  ownership statistics of Disneyland Paris,  so here is the latest breakdown for Euro Disney S.C.A. as of the 20 April 2015.

The major thing that jumps out at you is that The Walt Disney Company now own over 77% of Disneyland Paris.

Company                                Shares        %

The Walt Disney Company              606,275,358   77.40
Kingdom Holding Company               38,976,490    4.98
Invesco Asset Management Ltd.         21,105,711    2.69
Ledbury Capital Partners LLP           8,109,570    1.04
Invesco Advisers, Inc.                 4,787,207    0.61
GAM London Ltd.                        2,813,640    0.36
State Street Global Advisors Ltd.        193,515    0.18
Euro Disney SCA                          584,466    0.075
Norges Bank Investment Management        516,124    0.066
GO ETF Solutions LLP                     169,206    0.022

Many thanks to Edith from APPAED (Association des Petits Porteurs d’Actions EuroDisney) for this very interesting data.

 

Extension of the Euro Disney S.C.A. OPA

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Following an appeal filed on 9 April 2015 in the Paris Court of Appeal by CIMA,  the AMF – Autorité des Marchés Financiers (Financial Markets Authority) announced today in document No. 215C0446 that the Euro Disney S.C.A OPA will be extended.

The OPA was scheduled to be completed on 24 April 2015.  Pending the decision of the Paris Court of Appeal on the stay of application, the tender offer had been extended pursuant to Article 231-34 of the General Regulations.

New information will be published to shareholders to promote the modified calendar. 

Recapitalization Securities Note and Prospectus published.

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Euro Disney S.C.A. published a Securities Note and Prospectus today in relation to implementation of the recapitalization proposal that was approved by shareholders at the AGM on  Tuesday.

The Securities Note and Prospectus  can be downloaded here.  This document should be read in conjunction with the full Press Release and a Summary of the Prospectus which was also published today and can be found here.