EURO DISNEY S.C.A.
Reports First Half 2005 Results* Revenues up 5%, Led by Theme Park Growth * Growth in Park Guest Spending, Attendance and Hotel Occupancy * Reduced First Half Loss * Multi-year Attraction Program Launched (Marne-la-Vallée, April 28, 2005) Euro Disney S.C.A., parent company of Euro
Disney Associés S.C.A. ("EDA S.C.A."), operator of Disneyland Resort Paris,
reported today its consolidated results for the six months ("First Half") ended
March 31, 2005. Revenues Growth of 5% Reflects Increased Theme Park Guest Spending and
Attendance, as Well as Higher Hotel Occupancy.
Record revenues for the First Half 2005 of Euro 494.1 million were higher than the
prior year's revenues of Euro 471.1 million, reflecting an increase in theme park
revenues from increased attendance and higher guest spending and an increase in
real estate segment revenues of Euro 5.0 million, partially offset by decreases in
hotel revenues. Higher theme park guest spending was across the board, with
increasing revenues from admissions, merchandise and food and beverages. Hotel
revenues reflected lower daily guest spending per room, partially offset by
higher occupancy. Lower hotel guest spending per room reflected a difficult
comparison with prior year convention activities and lower average daily room
rates.
26% Reduction in Net Loss Due to the Effects of the Company's Legal and
Financial Restructuring and 5% EBITDA Growth.
Loss before financial charges for the First Half 2005 totalled Euro 53.4 million,
a 5% reduction from the prior year period's loss before financial charges of Euro
56.1 million. Net loss for the current period totalled Euro 80.9 million compared
to Euro 108.9 million in the prior year, reflecting an increased allocation of
losses to minority interests, reduced net financial charges and exceptional
expenses, and growth in earnings before net financial charges, depreciation and
amortization, exceptional items, income taxes and minority interests
("EBITDA").
First Half 2005 EBITDA increased Euro 0.8 million to Euro 18.4 million, reflecting
growth in revenues, partially offset by increased labour costs. EBITDA as a
percentage of sales was stable at 4%.
CONSOLIDATED SUMMARY STATEMENTS OF INCOME First Half 2005 First Half Variance
(unaudited, Euro in millions) 2004 (1) Amount %
Revenues 494.1 471.1 23.0 5 %
Costs and Expenses (547.5) (527.2) (20.3) (4) %
Loss before Financial Charges (53.4) (56.1) 2.7 5 %
Net Financial Charges (44.2) (53.1) 8.9 17 %
Loss before Exceptional Items (97.6) (109.2) 11.6 11 %
Exceptional loss, net (0.5) (3.3) 2.8 n/m
Income tax (0.5) - (0.5) n/m
Minority interests 17.7 3.6 14.1 n/m
Net Loss (80.9) (108.9) 28.0 26 %
(1) Certain reclassifications have been made to the First Half 2004 comparative
amounts in order to conform to the First Half 2005 presentation.
EBITDA ANALYSIS First First Variance
Half Half
(unaudited, Euro in millions) Amount %
2005 2004
Loss before Financial Charges (53.4) (56.1) 2.7 5 %
Depreciation and amortisation 71.8 73.7 (1.9) (3) %
EBITDA (1) 18.4 17.6 0.8 5 %
As a Percentage of Revenues 4% 4% - -
(1) While management believes EBITDA is a useful tool for evaluating performance of
the Group's business, it is not a measure of financial performance defined
under French generally accepted accounting principles, and should not be viewed
as a substitute for net income/(loss) or operating cash flows in evaluating the
Group's financial results. OPERATING STATISTICS The following table provides information regarding the key operating indicators
of the Group: First First Variance
Half Half
Amount %
2005 2004
Theme Park guests (in millions) (1) 5.7 5.6 0.1 1 %
Theme Park spending per guest (2) (in Euro) 42.4 40.1 2.3 6 %
Hotel occupancy rate (3) 79.9 % 77.9 % - 2.0ppt
Hotel total spending per room (4) (in Euro) 169.7 177.8 (8.1) (5) %
(1) Theme Park 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 VAT.
(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 VAT.
Discussion of Components of Operating Results: REVENUES BY SEGMENT First Half First Half Variance
2005 2004
(unaudited, Euro in Amount %
millions)
Theme Parks 245.6 229.6 16.0 7 %
Hotels and Disney 186.2 188.9 (2.7) (1) %
Village
Other 52.6 47.9 4.7 10 %
Resort Segment 484.4 466.4 18.0 4 %
Real Estate Segment 9.7 4.7 5.0 106 %
Total Revenues 494.1 471.1 23.0 5 %
Theme Parks revenues increased 7 % to Euro 245.6 million from Euro 229.6 million in
the prior year driven by a 6% increase in average spending per guest and a 1%
increase in attendance. Average theme park guest spending was favorably impacted by modest changes in
admissions pricing, including a change in the allocation of total vacation
package pricing between hotel rooms and theme park admissions, and the
increased popularity of the "Park Hopper" ticket. Additionally, merchandise
and food and beverage spending were up, reflecting improved capture rates.
Theme park attendance and revenues for the First Half 2005 were positively
affected by an earlier Easter season and vacation calendar. This was partially
offset by the extremely cold weather during the month of February, which for
the Ile-de-France region had the lowest average temperatures in 34 years,
resulting in an adverse effect on visitation from the local French market,
compared with the prior year.
Hotel and Disney Village revenues decreased 1 % to Euro 186.2 million from Euro 188.9
million in the prior year, reflecting an unfavourable comparison with strong
prior year convention activities and a 5 % decrease in average daily guest
spending per room, which reflects lower average daily room rates including the
impact of a change in the allocation of total vacation package pricing between
hotel rooms and theme park admissions, partially offset by a 2 percentage
points increase in hotel occupancy. The hotels and Disney Village revenues
also benefited from the timing of the Easter season and vacation calendar.
Other revenues (which primarily include participant sponsorships,
transportation and other services sold to guests) increased 10% primarily
reflecting increased guest spending on transportation and other guest
services. Real Estate Segmentrevenues increased from the prior year by Euro 5.0 million to Euro
9.7 million, reflecting planned land sales.
COSTS AND EXPENSES First Half First Half Variance
2005 2004
(unaudited, Euro in millions) Amount %
Direct operating costs (1) 347.4 321.3 26.1 8 %
Marketing and sales expenses 52.0 60.3 (8.3) (14) %
General and administrative 49.4 46.4 3.0 6 %
expenses
Depreciation and amortisation 71.8 73.7 (1.9) (3) %
Royalties and management fees 26.9 25.5 1.4 5 %
Total Costs and Expenses 547.5 527.2 20.3 4 %
(1) Includes operating wages and employee benefits, cost of sales for merchandise
and food and beverage, transportation services and real estate land sales and
other costs such as utilities, maintenance, renovation expenses, insurance and
operating taxes.
INCREASED COSTS AND EXPENSES REFLECT HIGHER LABOUR COSTS Costs and Expenses increased during the First Half 2005 by Euro 20.3 million to
reach Euro 547.5 million compared to Euro 527.2 million in the prior year, reflecting
increased labour costs, higher cost of sales for real estate, merchandise and
other guest services, partially offset by a one-time operating tax benefit
resulting from the Company's legal and financial restructuring. Increased
labour costs reflected primarily an increase in wages, including the impact of
an increased French minimum wage and other labour law changes, a reduction in
subsidies related to the implementation of the 35-hour work week and a slight
increase in full-time equivalents, including filling senior management
positions. Marketing and sales expenses decreased Euro 8.3 million during First
Half 2005, reflecting reduced media spending. LOSS BEFORE FINANCIAL CHARGES The First Half 2005 loss before financial charges decreased Euro 2.7 million to Euro
53.4 million from Euro 56.1 million in the prior year, due to increased revenues,
mostly offset by higher costs that were driven by labour cost increases.
First Half 2005 First Half 2004 Variance
(unaudited, Euro in millions) Amount %
Resort Segment (54.4) (56.3) 1.9 3 %
Real Estate Segment 1.0 0.2 0.8 400 %
Loss before Financial (53.4) (56.1) 2.7 5 %
Charges
NET FINANCIAL CHARGES First Half 2005 First Half 2004 Variance
(unaudited, Euro in millions) Amount %
Financial income 1.7 1.3 0.4 31 %
Financial expense (45.9) (54.4) 8.5 16 %
Net Financial Charges (44.2) (53.1) 8.9 17 %
The Euro 8.9 million decrease in net financial charges reflects the conversion of
debt owed by EDA S.C.A. to subsidiaries of The Walt Disney Company ("TWDC")
into equity of EDA S.C.A., forgiveness of interest charges on certain debt
resulting from the Company's legal and financial restructuring, lower effective
interest rates, partially offset by an increase in the interest rate margin on
certain of the restructured debt.
EXCEPTIONAL LOSS, NET AND INCOME TAX Exceptional Loss, Net decreased from Euro 3.3 million to Euro 0.5 million, reflecting
a Euro 10.0 million gain relating to the portion of the line of credit from TWDC
that was forgiven as part of the Company's legal and financial restructuring,
partially offset by costs associated with the restructuring of the Company's
debt.
Income tax expense reflects non-recurring taxes that will be due in fiscal year
2005 as a result of changes in the Group's tax consolidation linked to the
legal restructuring. The Group's unused tax loss carry-forwards of
approximately Euro 900.0 million at September 30, 2004, remain available to be
carried forward indefinitely.
MINORITY INTERESTS As a result of the Company's legal and financial restructuring, substantially
all of the Company's assets and liabilities were contributed to an 82% owned
subsidiary, EDA S.C.A. Subsidiaries of TWDC own the remaining 18% of EDA
S.C.A. The restructuring was made effective October 1, 2004 in the Company's
consolidated accounts. Accordingly, the income statement reflects an
allocation of 18% of the losses from EDA S.C.A.'s consolidated net results for
the First Half 2005 to TWDC subsidiaries as the minority interests of EDA
S.C.A. NET LOSS The First Half 2005 net loss totalled Euro 80.9 million compared to a net loss of
Euro 108.9 million in the prior year, reflecting a 26% improvement (Euro 28.0
million). The improved net loss reflects the effects of the Company's legal
and financial restructuring on the Group's minority interests, net financial
charges and exceptional items, as well as the Company's increased revenues and
labour costs.
Cash Flows and Liquidity: As of March 31, 2005, cash and cash equivalents totalled Euro 221.0 million, an
increase of Euro 89.7 million from the September 30, 2004 balance.
Cash flows used in operating activities totalled Euro 97.0 million compared to the
prior year cash generation of Euro 24.9 million, reflecting the payment of fiscal
year 2004 royalties and management fees, increased interest payments and
changes in other working capital items.
Cash flows used in investing activities totalled Euro 18.6 million, a Euro 6.3
million increase over the prior year, driven primarily by spending on the
Company's new investment program and recurring capital investment expenditures
related to various improvements to the existing asset base.
Cash flows from financing activities totalled Euro 205.3 million reflecting Euro
253.3 million of gross proceeds from the Company's equity rights offering, net
of Euro 15.7 million of commissions and other equity raising costs paid to
third-party financial institutions and advisors. Additionally, the Company
paid Euro 114.8 million in debt repayments, including Euro 100.6 million paid through
the transfer of debt security deposits held by the Company's lenders and Euro 5.0
million paid on the Company's previous line of credit with TWDC.
At the end of the First Half 2005, the Company had cash and cash equivalents
of Euro 221.0 million, including Euro 49.4 million belonging to the consolidated
financing companies. Based on existing cash, liquidity from the Company's Euro
150.0 million line of credit from TWDC, and provisions for the unconditional
and conditional deferral of certain royalties and management fees and interest
charges pursuant to the Company's legal and financial restructuring, the
Company believes it has adequate cash and liquidity for the foreseeable future.
Adoption of International Financial Reporting Standards: The Company will be adopting International Financial Reporting Standards
("IFRS") at the beginning of fiscal year 2006. Upon adoption, the Company will
prepare an opening balance sheet under IFRS prepared as if the Company had
adopted IFRS at the beginning of fiscal year 2005. The Company is currently
evaluating the impact of IFRS on the Company's financial statements. Based on the Company's analysis to date, the Company anticipates that IFRS will
change certain line item classifications and disclosures in the Company's
financial statements. Additionally, the depreciation method for fixed assets
will be changed to reflect the depreciable lives of predefined components. The
Company will cease to accrue and expense the costs of major renovations in
advance, but will instead recognize the capitalisable fixed asset components
and non-capitalisable expenses of major renovations when incurred.
New Investment Program: Beginning last year with The Legend of the Lion King Show, the Company launched
a program to increase its product offer at both the Disneyland and Walt Disney
Studios parks. For the Second Half 2005, the Company opened Space Mountain:
Mission 2, an exciting new experience to celebrate the 10th anniversary of one
of Disneyland Park's most popular attractions. Additionally, this summer, the
resort will be celebrating with Disney resorts worldwide the 50th Anniversary
of Disneyland Park in California. This celebration will be accompanied by a
fantastic new fireworks show, "Wishes".
For fiscal year 2006, the Company plans on opening Buzz Lightyear's Laser Blast
in Disneyland Park. In fiscal year 2007, an exciting new land, Toon Studios,
is scheduled to open in Walt Disney Studios, followed by the extremely popular
and iconic Tower of Terror in 2008. These attractions are designed to increase
the appeal and capacity of the parks, thereby driving attendance and occupancy
growth as well as increases in guest spending.
Total investment spending for the fiscal year 2005 through 2009 program is
budgeted at approximately Euro 240 million, of which approximately Euro 12 million
has been incurred through the end of the First Half 2005.
Outlook for Fiscal Year 2005: The First Half historically represents the resort segment's low season. For
the remainder of fiscal year 2005, assuming stable economic and operating
conditions, the Company is targeting continued revenue growth and a stable
year-over-year EBITDA as a percentage of revenues, reflecting the effect of
increased revenues, partially offset by increased labour costs. For the third
quarter, the Company is expecting revenues in comparison with the prior year to
be adversely affected by the early Easter and vacation calendar shift into the
second quarter.
For the real estate segment, the Company expects continued growth for the
remainder of fiscal year 2005.
André Lacroix, Chairman and Chief Executive Officer of Euro Disney S.A.S.,
said: "We are pleased with our First Half 2005 revenue growth of 5%, reflecting the
third consecutive quarter of revenue growth for our Resort.
With our financial restructuring complete, we can now pursue the execution of
our long-term strategy aimed at growing revenues and EBITDA, while providing
the highest quality experience for our guests.
Disneyland Resort Paris, Europe's number one tourist destination, has an
exciting future as it begins to implement a multi-year attraction program to
enhance its family entertainment offering." Corporate Communication Investor Relations
Pieter Boterman Fiona Lord Duarte
Tel: +331 64 74 59 50 Tel: +331 64 74 58 55
Fax: +331 64 74 59 69 Fax: +331 64 74 56 36
e-mail: pieter.boterman@disney.com e-mail: fiona.lord.duarte@disney.com
Next Scheduled Release: Third Quarter Revenues in mid-July 2005 Additional Financial Information can be found on the internet at
www.eurodisney.com Code ISIN: FR0000125874 Code Reuters: EDL.PA
Sicovam: 12 587 Code Bloomberg: EDL FP
Euro Disney S.C.A. and its subsidiaries operate the Disneyland Resort Paris
which includes: Disneyland Park, Walt Disney Studios Park, seven themed hotels
with approximately 5,800 rooms (excluding 2,033 additional third-party rooms
located on the site), two convention centres, Disney Village, a dining,
shopping and entertainment centre, and a 27-hole golf facility. The Group's
operating activities also include the management and development of the
2,000-hectare site, which currently includes approximately 1,000 hectares of
undeveloped land. Euro Disney's shares trade in Paris (SRD), London and
Brussels. Attachments: Exhibit 1 - Summary Consolidated Balance Sheets
Exhibit 2 - Summary Consolidated Statements of Cash
Flows Exhibit 3 - Reconciliation of Shareholders' Equity and
Minority Interests Exhibit 4 - Reconciliation of Borrowings Management believes certain statements in this press release may constitute
"forward-looking statements" within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. These statements are made on the basis of
management's views and assumptions regarding future events and business
performance as of the time the statements are made. Actual results may differ
materially from those expressed or implied. Such differences may result from
actions taken by the Company, as well as from developments beyond the Company's
control, including changes in political or economic conditions. Other factors
that may affect results are identified in the Company's documents filed with
the U.S. Securities and Exchange Commission.
EXHIBIT 1 EURO DISNEY S.C.A. GROUP
First Half 2005 Results Announcement
Six Months Ended March 31, 2005 Summary Consolidated Balance Sheets March September Variance
(unaudited, Euro in millions) 2005 2004 Amount
Tangible and Intangible assets 2,350.1 2,396.3 (46.2)
Financial Assets 20.4 115.3 (94.9)
Cash and Short-term Investments 221.3 131.4 89.9
Other Assets 190.4 174.0 16.4
Deferred Charges 51.5 59.6 (8.1)
Total Assets 2,833.7 2,876.6 (42.9)
Share Capital and Share Premium 1,480.7 1,246.5 234.2
Accumulated Deficit (1,171.8) (1,306.4) 134.6
Shareholders' Equity (Deficit) 308.9 (59.9) 368.8
Minority Interests 107.7 339.6 (231.9)
Provisions for Risks and Charges 105.1 98.2 6.9
Borrowings 1,931.4 2,052.8 (121.4)
Current Liabilities and Deferred 380.6 445.9 (65.3)
Revenues
Total Shareholders' Equity and 2,833.7 2,876.6 (42.9)
Liabilities
EXHIBIT 2 EURO DISNEY S.C.A. GROUP
First Half 2005 Results Announcement
Six Months Ended March 31, 2005 Summary Consolidated Statements of Cash Flows
First First
Half Half
(unaudited, Euro in millions) 2005 2004
Net Loss (80.9) (108.9)
Items Not Requiring Cash Outlays:
Depreciation and amortisation 71.8 73.7
Changes in working capital items (71.6) 58.9
Minority interests (17.7) (3.6)
Other 1.4 4.8
Cash Flows from (used in) Operating Activities (97.0) 24.9
Capital expenditures for tangible and intangible assets (18.7) (12.2)
Other 0.1 (0.1)
Cash Flows used in Investing Activities (18.6) (12.3)
Gross proceeds from equity offering 253.3 -
Payment of equity issuance costs (15.7) -
Proceeds from new borrowings - 7.5
Repayments of borrowings (114.8) (40.0)
Decrease in debt security and other deposits 94.9 29.9
Debt restructuring costs (12.4) (3.1)
Cash Flows from (used in) Financing Activities 205.3 (5.7)
Change in cash and cash equivalents 89.7 6.9
Cash and cash equivalents, beginning of period 131.3 94.6
Cash and Cash Equivalents, end of period 221.0 101.5
Supplemental Cash Flow Information:
Interest paid 62.6 42.0
Non-Cash Financing and Investing Transactions:
Deferral into borrowings of previous TWDC line of credit 110.0 -
Deferral into borrowings of accrued interest under CDC 59.8 -
subordinated loans
Unconditional deferral into borrowings of fiscal year 2005 25.0 -
royalties and management fees
March March
31, 31,
(unaudited, Euro in millions) 2005 2004
Cash 11.8 14.9
Short-term investments 209.5 86.7
Bank Overdrafts (recorded in accounts payable and (0.3) (0.1)
accruals)
Cash and Cash Equivalents, end of period 221.0(1) 101.5(1)
(1) Includes Euro 49.4 million and Euro 49.2 million of cash and short-term
investments of the consolidated financing Companies as of March 31, 2005 and
March 31, 2004, respectively.
EXHIBIT 3 EURO DISNEY S.C.A. GROUP
First Half 2005 Results Announcement
Six Months Ended March 31, 2005 Reconciliation of Shareholders' Equity AND MINORITY INTERESTS (unaudited, Euro in millions) Share Total
Capital Accumulated
Premium Deficit Shareholders' Minority
Equity Interests
Balances at September 30, 2004 1,246.5 (1,306.4) (59.9) 339.6
Reclassification between - 215.5 215.5 (215.5)
accumulated deficit and
minority interests in EDA
S.C.A. based upon 82%/18%
ownership split
Proceeds from Equity Rights 234.2 - 234.2 -
Offering, net of Euro 19.1
million in underwriting and
issuance costs
Net Loss First Half 2005 - (80.9) (80.9) (17.7)
Other - - - 1.3
Balances at March 31, 2005 1,480.7 (1,171.8) 308.9 107.7
EXHIBIT 4 Reconciliation of Borrowings March First Half 2005 September
(unaudited, Euro in millions) 2005 Increases Decreases 2004
CDC Senior Loans 117.5 - (10.0) 127.5
CDC Subordinated Loans 843.6 59.8 - 783.8
Credit Facility - Phase IA 273.5 - (66.6) 340.1
Credit Facility - Phase IB 121.0 - (29.5) 150.5
Partner Advances - Phase IA 304.9 - - 304.9
Partner Advances - Phase IB 93.2 - (3.7) 96.9
TWDC Loans 152.3 135.0 - 17.3
TWDC Lines of Credit - - (125.0) 125.0
Sub-Total 1,906.0 194.8 (234.8) 1,946.0
Accrued Interest 25.4 41.6 (123.0) 106.8
Total Borrowings 1,931.4 236.4 (357.8) 2,052.8
END
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