EDL s.c.a. end of year: Profit!

[Zarniwoop]

EURO DISNEY S.C.A.
Announces Net Profit in Fiscal Year 2008

• Net profit of € 2 million for the Group in Fiscal Year 2008 - Third consecutive year of growth in revenues
• EBITDA1 increased 21% to € 249 million
• Cash and cash equivalents at € 374 million
• Records in attendance of 15.3 million and hotel occupancy of 91%

(Marne-la-Vallée, October 21, 2008) Euro Disney S.C.A. (the "Company"), parent company of Euro Disney Associés S.C.A. ("EDA"), operator of Disneyland® Resort Paris, reported today the results for its consolidated group (the "Group"), for the fiscal year 2008 which ended September 30, 2008 (the "Fiscal Year").

Commenting on the results, Philippe Gas, Chief Executive Officer of Euro Disney S.A.S, said:
"We reached an important milestone in 2008 by achieving profitability. Our revenues, theme parks attendance and hotel occupancy contributed to our performance which is noteworthy given the economic environment.

The popularity of Disneyland Resort Paris, Europe's number one tourist destination, continued to grow as guests discovered our new attractions including the iconic Twilight Zone Tower of TerrorTM, Cars Race Rally, Crush's Coaster, the interactive experience Stitch Live! and the High School Musical shows inspired by the popular Disney franchise.

We are convinced that our development strategy, together with the commitment of our cast members and the strength of the Disney brand, position us well for long-term growth."

Resort operating segment revenues increased by more than 7% to € 1,289.5 million from € 1,201.0 million in the prior-year period.

Theme parks revenues increased 9% to € 715.8 million from € 658.6 million in the prior-year period, primarily reflecting a 0.8 million increase in attendance to 15.3 million guests and a 3% increase in average spending per guest to € 46.3. The increase in theme parks attendance was driven by higher guest visitation from France, the Netherlands and United Kingdom. The increase in average spending per guest reflects growth from admissions and food and beverage.

Hotels and Disney Village revenues increased 7% to € 515.6 million from € 483.0 million in the prior-year period, reflecting a 7% increase in average spending per room to € 211.4 and a 1.6 percentage point increase in hotel
occupancy from 89.3% to 90.9%. The increase in average spending per room principally reflects increases in daily room rates and fewer promotional offers. The increase in hotel occupancy resulted from an incremental 37,000 room nights compared to the prior-year period, which can be attributed to more leisure guests from the United Kingdom and Spain, partially offset by less rooms sold to leisure and business groups as a result of lower availability.

Other revenues, which include participant sponsorships, transportation and other travel services sold to guests, decreased € 1.3 million to € 58.1 million.

UPDATE ON RECENT AND UPCOMING EVENTS

As the "Celebration Continues…Big Time" in 2008, Disneyland® Resort Paris welcomed on August 12th its 200 millionth guest since the opening in 1992. This guest belonged to a family from Provence that was visiting the Resort for the 5th time.

Philippe Gas stepped into his role as CEO of Euro Disney S.A.S., the Gérant of the Company and EDA on September 1, 2008, replacing Karl Holz. Philippe Gas was a member of the opening team in 1992 and is a 17-year Disney veteran.

From October 4 through November 2, 2008, Disneyland® Park transforms itself, with the help of Mickey and the Disney villains, for the annual Halloween celebration. Then on November 8, 2008 through January 6, 2009, the Resort takes on its holiday decorations, music and special entertainment for the very popular Christmas season.

In line with our ongoing development strategy, in the Walt Disney Studios® Park, Playhouse Disney – Live on Stage!, will provide the opportunity for our younger guests to join friends from the Disney Channel in an immersive entertainment experience, for the launch of the summer season. The park will also debut Disney's Stars 'n Cars, a new Hollywood-style show starring characters from Toy Story, Snow White, Monsters Inc., Mulan, The Little Mermaid, and more.

Source: EDL s.c.a. Press release

[Zarniwoop]

EDL would've made € 35 million profit, but they wisely paid over € 30 million of debt.. otherwise French goverment would've collected tax from the € 35 million.

EDL still has 98,5% of its debt there, so we've got a long road for real profit. During 2008 EDL paid over € 100 million of interests because of the debt. So, there we can count that without debt, EDL would make some € 135 million profit annually.

[Japper]

Good news for DLRP!

[Malin]

I don't want to sound to nagative as this is great news, but I'm going to hold back from congratulating DLRP for a couple of years yet. I would like to see if these results will remain strong next year and the year after first. The fact hotel occupancy is at 91 % has me excited about the future of the Resort, finally the existing structure is meeting demand.

[DLRP_bopazot]

that's enough to pay millions Euros for a E Ticket Ride Development to WDI .

[Disney Obsessive]

Originally Posted by Malin

I don't want to sound to nagative as this is great news, but I'm going to hold back from congratulating DLRP for a couple of years yet. I would like to see if these results will remain strong next year and the year after first. The fact hotel occupancy is at 91 % has me excited about the future of the Resort, finally the existing structure is meeting demand.

Malin. I'm with you on the this in that it will be increasingly difficult to maintain a profit. An example being that this year they paid off 60.8m Euros in debt (I know this does not agree with an earlier post but exhibit 6 of the press release gives this figure). Next year they will need 80.6m Euros so to make a profit they will need to an extra 20m operating profit. In 2011 this figure rises to 123.4m. So good work Eurodisney and good luck for next year.

I think 91% occupancy is pretty much as good as it gets. So this may justify the building of a new hotel. I can imagine this limits Eurodisney business solutions in hosting more events. And there must now be many points in the year where there are no vacancies at all and people are turned away. Not to mention the lack of capacity for renovating rooms.

[pussnboots]

Originally Posted by Zarniwoop

EDL would've made € 35 million profit, but they wisely paid over € 30 million of debt.. otherwise French goverment would've collected tax from the € 35 million.

EDL still has 98,5% of its debt there, so we've got a long road for real profit. During 2008 EDL paid over € 100 million of interests because of the debt. So, there we can count that without debt, EDL would make some € 135 million profit annually.

Ah, is it that time again already? That time when you report the financial news and I respond with a really stupid question? Thank goodness that's not going to happen this time... But so I thought Europe was a country?

Kidding, kidding. But so if I understand you correctly, they have to pay about €100mn in interest each year? Is this then the part that makes some people so pessimistic about the company's future and fear that it is stuck in a Catch-22?

[Zarniwoop]

Originally Posted by pussnboots

Ah, is it that time again already? That time when you report the financial news and I respond with a really stupid question? Thank goodness that's not going to happen this time... But so I thought Europe was a country?

Kidding, kidding. But so if I understand you correctly, they have to pay about €100mn in interest each year? Is this then the part that makes some people so pessimistic about the company's future and fear that it is stuck in a Catch-22?

Yes, it is the time again. These things pop-up quarterly.. doesn't time fly?

True, EDL has a bit under € 2 billion debt.. with 5% interest rate they pay € 100 million. The company will have hard times ahead and without TWDC's help they cannot invest much.

[Zarniwoop]

Originally Posted by Disney Obsessive

An example being that this year they paid off 60.8m Euros in debt - - So good work Eurodisney and good luck for next year.

I think 91% occupancy is pretty much as good as it gets.

Yes, the number I mentioned is actually the amount EDL amortized its debt. Not what they paid.

And you're correct, with 91% occupancy thay cannot improve much. Any hotel chain would be happy with this number. Sadly EDL has a lot to support with their hotel profits (WDS & pile of debt with interests).

So what will EDL do next? AP's will get 10 € raise on November. Hotel package prices will go up 2-5%. But recession will (and has already) hit to bookings and EDL must put packages on sale. So good offers will appear for November and after new year.

The current year will be very interesting.

[Kristof]

they also had a exceptionel profit from a property sale , wich earned them 20 million, also they've got some kind of refund from taxes of 10 million in total

so take those 30 million away, and they are back in the red

[pussnboots]

Originally Posted by Zarniwoop

Yes, it is the time again. These things pop-up quarterly.. doesn't time fly?

True, EDL has a bit under € 2 billion debt.. with 5% interest rate they pay € 100 million. The company will have hard times ahead and without TWDC's help they cannot invest much.

It does sound like a Catch-22. They can't win. Is there a scenario imaginable in which they could actually get back in the black? Other than a guest coming in saying, "I would like two billion pizza burgers"?

[Disney Obsessive]

Originally Posted by pussnboots

It does sound like a Catch-22. They can't win. Is there a scenario imaginable in which they could actually get back in the black? Other than a guest coming in saying, "I would like two billion pizza burgers"?

It is quite normal for a large business to have debt just not at the level Eurodisney have so I don't think it is about being in the black. It is more about it being at a level that is affordable. Think of it a bit like your mortgage (assuming you have one). Buying a house over 25 years is fine....not have money left to be able to buy food is bad.

The future is all about growth really. They are paying off the original debt so that interest payment will not always be that high. The question is now how to grow the business. Take the hotels as a example. Hotels at high occupancy means there is little room to increase revenue in the hotel sector unless they put prices up but if the current prices are what the market is prepared to pay that could be counter productive. So perhaps more rooms is the answer. Another 500 room hotel could bring in more guests and so more profit. Of course a new hotel would need investment and that means more debt but the increase in profit should be higher than the cost of the loan.

The growth strategy has got them this far along with better marketing. We may hate the way the 15th aniversary has gone on...and on...and on but it did do the trick. The question is what to do next...another hotel...more capacity in WDS...or something on the conferencing side.

Answers on a postcard to Phillipe Gas, Disneyland Paris

[fizzog]

Well I guess any kind of profit has to be some form of good news, though the debt is, really, pretty terrible. But it's not as though they're just gonna shut it down either; it's really strange and tricky situation indeed.

[Zarniwoop]

A good thing is that they've got over € 350 million in cash.

Btw, the new CEO said in an interview that DLRP should get an e-ticket attraction in 2012.. and the project could start next year.

[Sir_Cliff]

Originally Posted by fizzog

Well I guess any kind of profit has to be some form of good news, though the debt is, really, pretty terrible. But it's not as though they're just gonna shut it down either; it's really strange and tricky situation indeed.

Yeah, I guess it is good news. Does anyone know the last year in which they made a profit?

As you say, though, it is a strange and tricky situation. With record results and some exceptional revenue from property sales they have just managed a tiny profit this year, but it's hard to see how they can keep themselves in the black in the short term and continue to develop the resort. The debt just seems too crippling for them to ever get out from under it. That said, they do seem to have done a good job in recent years of turning things around from the brink of disaster to new attractions, record attendance and a small profit so perhaps they know what they're doing.