MARNE-LA-VALLEE, France, November 8 /PRNewswire-FirstCall/ --
- Revenues Increased 12% to EUR 1,220 Million, Reflecting Volume Growth
in Theme Parks Attendance and Hotel Occupancy
- Operating Margin at EUR 51 Million, Against a Prior Year Loss of EUR
2 Million
- Net Loss Reduced by Over 50% to EUR 42 Million
Euro Disney S.C.A. (the "Company"), parent company of Euro Disney
Associes S.C.A., operator of Disneyland(R) Resort Paris, reported today the
results for its consolidated group (the "Group"), for the fiscal year 2007
which ended September 30, 2007 (the "Fiscal Year").
Revenues for the Fiscal Year increased 12% to EUR 1,220.3 million
primarily reflecting volume growth in theme parks attendance and hotel
occupancy. Theme parks revenues increased 14% to EUR 658.6 million,
primarily due to an increase of 1.7 million in attendance to 14.5 million
for the Fiscal Year. Hotels and Disney(R) Village revenues increased 17% to
EUR 483.0 million, driven by a 10% increase in average spending per room
and an increase of 5.8 percentage points in the hotel occupancy rate. Real
estate revenues decreased EUR 10.1 million to EUR 19.3 million due to lower
activity during the Fiscal Year.
Costs and expenses for the Fiscal Year increased 7% compared to the
prior-year period. This increase was driven by additional labor and other
direct costs incurred to support the increased Resort activity, labor rate
inflation and increased marketing expenses. Partially offsetting this
increase was a reduction of EUR 4.9 million in costs and expenses related
to lower Real estate activity and a EUR 4.3 million benefit from the
favorable settlement of a claim related to prior expenses.
Operating margin before depreciation and amortization increased EUR
57.8 million to EUR 205.7 million.
Operating margin increased to EUR 50.8 million, against a prior year
loss of EUR 2 million.
Net financial charges increased 7% over the prior-year period. This
increase is primarily related to the Disneyland(R) Park financing
agreement, net of increased financial income.
For the Fiscal Year, net loss decreased EUR 47.0 million to EUR 41.6
million while net loss attributable to equity holders of the parent
decreased EUR 34.7 million to EUR 38.4 million.
Commenting on the results, Karl L. Holz, Chairman and Chief Executive
Officer of Euro Disney S.A.S., said:
"This year's results, marked by a positive operating margin, were
driven by volume growth in parks attendance and hotel occupancy and an
increase in average spending per room. In 2007, we kicked off the 15th
anniversary celebration by introducing a fantastic new parade and
compelling new attractions.
This year's solid performance was made possible through the continued
dedication and commitment of all our cast members, many of which celebrated
their personal 15th anniversary with the Company this year.
We look forward to continuing the celebration in fiscal year 2008 with
the introduction of The Twilight Zone Tower of Terror attraction and Stitch
Live; new experiences which only Disney can provide.
In 2008, we will continue to execute our growth strategy and remain
focused on driving this business toward profitability."
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Fiscal Year Variance
(EUR in millions,
unaudited) 2007 2006 Amount %
Revenues 1,220.3 1,087.7 132.6 12.2%
Costs and expenses (1,169.5) (1,090.1) (79.4) 7.3%
Operating margin 50.8 (2.4) 53.2 n/c *
Net financial charges (92.2) (86.3) (5.9) 6.8%
(Loss) / income from
equity investments (0.2) 0.1 (0.3) n/c *
Loss before taxes (41.6) (88.6) 47.0 (53.0)%
Income tax benefit
(expense) - - - n/m **
Net loss (41.6) (88.6) 47.0 (53.0)%
Net loss attributable to:
Equity holders of the
parent (38.4) (73.1) 34.7 (47.5)%
Minority interests (3.2) (15.5) 12.3 (79.4)%
* n/c: not calculated.
** n/m: not material.
OPERATING MARGIN BEFORE DEPRECIATION AND AMORTIZATION
Fiscal Year Variance
EUR in millions, unaudited) 2007 2006 Amount %
Operating margin 50.8 (2.4) 53.2 n/c
Plus: Depreciation
and amortization 154.9 150.3 4.6 3.1%
Operating margin before
depreciation and amortization (1) 205.7 147.9 57.8 39.1%
As a percentage of revenues 16.9% 13.6% + 3.3 ppt
(1) Operating margin before depreciation and amortization is not a
measure of financial performance defined under IFRS, and should not be
viewed as a substitute for operating margin, net income / (loss) or
operating cash flow in evaluating the Group's financial results. However,
management believes that operating margin before depreciation and
amortization is a useful tool for evaluating Group performance.
Operating Statistics
The following table provides information regarding the key operating
indicators of the Group:
Fiscal Year Variance
2007 2006 Amount %
Theme parks attendance
(in millions)(1) 14.5 12.8 1.7 13.3%
Average spending per
guest (2) (in EUR) 45.0 44.8 0.2 0.4%
Hotel occupancy rate (3) 89.3% 83.5% + 5.8 ppt
Average spending
per room (4) (in EUR) 197.9 179.5 18.4 10.3%
(1) Theme parks attendance is recorded on a "first click" basis,
meaning that a person visiting both parks in a single day is counted as
only one visitor.
(2) Average daily admission price and spending on food, beverage and
merchandise and other services sold in the theme parks, excluding value
added tax.
(3) Average daily rooms sold as a percentage of total room inventory
(total room inventory is approximately 5,800 rooms).
(4) Average daily room price and spending on food, beverage and
merchandise and other services sold in hotels, excluding value added tax.
The increase in theme parks attendance primarily reflects growth in the
French, Spanish and Italian markets. Average spending per guest was
relatively stable, as increased in-parks spending on merchandise and food
and beverage items was partially offset by special offers.
The hotel occupancy rate increased 5.8 percentage points, which
resulted from an incremental 123,000 room nights compared to fiscal year
2006. This increase was primarily driven by more guests visiting from
Spain, Italy and France.
Average spending per room increased 10%, primarily as a result of
increases in daily room rates at certain of our hotels.
Discussion of Components of Operating Results
REVENUES BY OPERATING SEGMENT
Revenues of the Group are detailed as follows:
Fiscal Year Variance
(EUR in millions, unaudited) 2007 2006 Amount %
Theme parks 658.6 579.2 79.4 13.7%
Hotels and Disney
(R) Village 483.0 412.2 70.8 17.2%
Other 59.4 66.9 (7.5) (11.2)%
Resort operating segment 1,201.0 1,058.3 142.7 13.5%
Real estate development
operating segment 19.3 29.4 (10.1) (34.4)%
Total revenues 1,220.3 1,087.7 132.6 12.2%
Resort operating segment revenues increased 14% to EUR 1,201.0 million
from EUR 1,058.3 million in the prior-year period.
Theme parks revenues increased 14% to EUR 658.6 million from EUR 579.2
million in the prior-year period, primarily reflecting the 1.7 million
increase in attendance over the Fiscal Year.
Hotels and Disney Village revenues increased 17% to EUR 483.0 million
from EUR 412.2 million in the prior-year period, reflecting a 5.8
percentage point increase in hotel occupancy and a 10% increase in average
spending per room.
Other revenues, which primarily include participant sponsorships,
transportation and other travel services sold to guests, decreased EUR 7.5
million to EUR 59.4 million. This decrease was primarily due to a decline
in sponsorship revenues.
Real estate development operating segment revenues decreased EUR 10.1
million from the prior-year period as a result of fewer transactions during
the Fiscal Year as compared to the prior-year period. A total of seven
transactions were closed in the Fiscal Year, compared with ten transactions
in the prior-year period.
Costs and Expenses
Costs and expenses of the Group are detailed as follows:
Fiscal Year Variance
(EUR in millions,
unaudited) 2007 2006 Amount %
Direct operating costs
(1) 936.8 874.4 62.4 7.1%
Marketing and sales
expenses 120.4 106.3 14.1 13.3%
General and
administrative expenses 112.3 109.4 2.9 2.7%
Costs and expenses 1,169.5 1,090.1 79.4 7.3%
(1) For the Fiscal Years 2007 and 2006, direct operating costs included
royalties and management fees of EUR 69.1 million and EUR 62.2 million,
respectively.
Direct operating costs for the Fiscal Year increased 7% compared to the
prior-year period. This increase was driven by additional labor and other
direct costs incurred in order to support the increased Resort activity,
combined with labor rate inflation. Partially offsetting this increase was
a reduction of EUR 4.9 million in costs and expenses related to lower Real
estate activity and a EUR 4.3 million benefit from the favorable settlement
of a claim related to prior expenses.
Marketing and sales expenses increased EUR 14.1 million compared to the
prior-year period largely due to increased media spending on advertising
for the 15th anniversary celebration and increased costs related to sales.
Net Financial Charges
Net financial charges were composed of
Fiscal Year Variance
(EUR in millions,
unaudited) 2007 2006 Amount %
Financial income 10.5 5.1 5.4 105.9%
Financial expense (102.7) (91.4) (11.3) 12.4%
Net financial charges (92.2) (86.3) (5.9) 6.8%
Net financial charges increased 7% over the prior-year period.
Financial income increased EUR 5.4 million compared to the prior-year
period. This increase is primarily due to changes in interest rates and
greater cash on deposit as compared to the prior-year period. Financial
expense increased EUR 11.3 million compared to the prior-year period. This
increase is primarily related to the Disneyland(R) Park financing
agreement.
NET LOSS
For the Fiscal Year, net loss of the Group improved EUR 47.0 million to
EUR 41.6 million compared to EUR 88.6 million for the prior-year period.
Net loss attributable to equity holders of the parent amounted to EUR 38.4
million and net loss attributable to minority interests amounted to EUR 3.2
million. The decrease in net loss primarily reflects the increased revenues
of the Resort segment over the period.
Cash Flows and Liquidity
Cash and cash equivalents as of September 30, 2007 was EUR 330.0
million, up EUR 63.6 million from the prior fiscal year end. This increase
resulted from:
Cash Flows and Liquidity
Cash and cash equivalents as of September 30, 2007 was EUR 330.0
million, up EUR 63.6 million from the prior fiscal year end. This increase
resulted from:
Fiscal Year Variance
(EUR in millions, unaudited) 2007 2006
Cash flows generated by
operating activities 191.1 151.9 39.2
Cash flows used in
investing activities (126.9) (131.2) 4.3
Cash flows (used in) /
generated by financing activities (0.6) 3.5 (4.1)
Increase in cash
and cash equivalents 63.6 24.2 39.4
Cash flows generated by operating activities for the Fiscal Year
totaled EUR 191.1 million compared to EUR 151.9 million generated in the
prior-year period. This reflects the improved operating performance during
the Fiscal Year, partially offset by changes in working capital.
Cash flows used in investing activities for the Fiscal Year totaled EUR
126.9 million compared to EUR 131.2 million used in the prior-year period,
which primarily reflects capital expenditures related to the projects
associated with the multi-year investment program.
Cash flows used in financing activities for the Fiscal Year totaled EUR
0.6 million compared to EUR 3.5 million generated in the prior-year period.
Prior year net proceeds resulted from releases of debt security and other
deposits back to the Group.
Based on existing cash positions, liquidity from the EUR 150.0 million
line of credit available from The Walt Disney Company, and provisions for
the unconditional and conditional deferral of certain royalties and
management fees and interest charges pursuant to the 2005 restructuring,
management believes the Group has adequate cash and liquidity for the
foreseeable future, subject to the Group's compliance with its debt
agreements as discussed below.
The Group has covenants under its debt agreements which limit its
investments and financing activities. Beginning fiscal year 2006, the Group
must also meet financial performance covenants which require improvements
to its operating margin. Subject to final third-party review as provided in
its debt agreements, the Group believes that it has complied with these
covenants for the Fiscal Year.
For fiscal year 2008, if compliance with financial performance
covenants cannot be achieved through increased revenues, the Group will
have to appropriately reduce operating costs, curtail a portion of planned
capital expenditures (outside those contained in the Group's multi-year
investment program) and/or seek assistance from TWDC or other parties as
permitted under the loan agreements. Although no assurances can be given,
the Group currently believes that it will meet its financial performance
covenants in fiscal year 2008 through increased revenues and continued cost
containment, without the need for any of the additional measures referred
to above.
Update on recent and upcoming events
On April 1, 2007, the Group launched the celebration of the 15th
anniversary of Disneyland(R) Resort Paris. In June, the Group opened two
new attractions at the Walt Disney Studios(R) Park, Crush's Coaster and
Cars Race Rally, inspired by the Disney/Pixar hit animated films Finding
Nemo and Cars, respectively. These openings will be followed in early
fiscal year 2008 with The Twilight Zone Tower of Terror, which is a popular
attraction in the United States and Japan parks, and later in the year with
a new interactive experience, Stitch Live. These attractions are designed
to add to the appeal and capacity of Disneyland Resort Paris, further
enhancing the core guest experience to drive revenues growth.
On September 3, 2007, the Company's notice to terminate its
registration as a foreign private issuer with the Securities and Exchange
Commission ("SEC") in the United States was approved. As a consequence, the
Company will no longer be required to file its financial reports with the
SEC. The Company will continue to comply with the French securities
reporting and disclosure requirements.
At the general shareholders' meeting held on February 21, 2007,
shareholders of the Company approved the principle of a share consolidation
(i.e. a reverse stock split). The Company reports today that it will
implement a share consolidation effective December 3, 2007. Please refer to
the detailed press release issued today or our website
(http://www.eurodisney.com) for additional information on how the share
consolidation will be carried out.
Next Scheduled Release: Reverse Stock Split Detailed
Announcement on November 8, 2007
Additional Financial Information can be found on the
internet at http://www.eurodisney.com
Code ISIN: FR0000125874
Code Reuters: EDL.PA
Code Bloomberg: EDL FP
The Group operates Disneyland(R) Resort Paris which includes:
Disneyland(R) Park, Walt Disney Studios(R) Park, seven themed hotels with
approximately 5,800 rooms (excluding approximately 2,400 additional
third-party rooms located on the site), two convention centers, Disney(R)
Village, a dining, shopping and entertainment centre, and a 27-hole golf
course. The Group's operating activities also include the development of
the 2,000-hectare site, half of which is yet to be developed. Euro Disney
S.C.A.'s shares are listed and traded on Euronext Paris. pieter.boterman@disney.com
Investor Relations
Olivier Lambert
Tel: +33-1-64-74-58-55
Fax: +33-1-64-74-56-36
e-mail : olivier.lambert@disney.com
Corporate Communication
Jeff Archambault
Tel: +33-1-64-74-59-50
Fax: +33-1-64-74-59-69
e-mail : jeff.archambault@disney.com
Euro Disney Associes SCA
SOURCE Euro Disney Associes SCA
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CONTACT:
Press Contact: Pieter Boterman, Tel:
+33-1-64-74-59-50, Fax: +33-1-64-74-59-69, e-mail :
pieter.boterman@disney.com; Investor Relations, Olivier Lambert,
Tel: +33-1-64-74-58-55, Fax: +33-1-64-74-56-36, e-mail : ,
olivier.lambert@disney.com, Corporate Communication, Jeff
Archambault, Tel: +33-1-64-74-59-50, Fax: +33-1-64-74-59-69,
e-mail : jeff.archambault@disney.com
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