Compagnie des Alpes annual results for FY 2008-2009 Blooloop

Net attributable income: +11% – Free cash flow: a record €57 million – Strong reduction in net debt: – €100 million

For the fiscal year closed September 30, 2009, the Compagnie des Alpes Group showed strongly improving performances.

Dominique Marcel, Chairman – Chief Executive Officer, stated that "the 2009 results for Compagnie des Alpes were excellent. Sales grew, margins were maintained at a high level, and net income rose by more than 10%, all in an unfavorable context for the leisure sector. Above all, the Group generated a record-high level of free cash flow. In addition, we have managed to achieve the strategic change that I announced a year ago: restructuring the Group to be better integrated, tighter and more responsive; asset disposals that significantly lowered our debt; and an acquisition made with several financial partners (Deux Alpes Loisirs).

Despite these excellent performances, which illustrate CDA’s solid business model as well as its adaptability, the outlook for 2010 is at present difficult to interpret for our two business lines. The Group is nonetheless prepared to take the appropriate measures should business slump during the year."

Record business, especially for leisure parks

Group consolidated sales for the 2008-2009 fiscal year came to 576 million, an increase of 2.6%.

Sales of ski areas (57% of total Group sales) rose 0.6%. This increase results from sales growth of 2.5% in lifts, which was diluted by the expected decline in land-sales transactions over the financial year (4.9 million, down from 10.3 million in 2007-2008).

While abundant snow was more favorable for mid- and low-altitude sites, and the economy affected the British clientele (20% of CDA ski customers), Group ski areas recorded 12.9 million skier-days, a decline of only 2% from the record-breaking (in terms of visitor numbers) 2007-2008 season.

Daily revenue rose 4.6%, boosted by the resuming of operations at the Paradiski ski area following the reopening of the Vanoise Express. Average spending per capita continues to advance, showing how well skiing holds up in what is otherwise a difficult economic environment.

Sales at leisure parks (43% of total Group sales) rose 6.0%, their best like-for-like performance since 2002.

Annual visitor numbers grew 2.6%, to 9.9 million. This increase was obtained in an economic downturn that, in part, brought business to local leisure activities, as represented by most Group parks that are solidly established in their regional markets and that appeal to families in search of nearby leisure pursuits. The public’s enthusiasm for our acquisitions also illustrates the dynamic energy of Group parks, which won over their customer base through innovative events and prices adapted to different visitor profiles.

Visitor spending rose 3.3%, despite the depressed economic climate. This performance is the result of a significant rise in spending in boutiques, particularly following expenditures for renovation, and of careful management of distribution channels and sales policies.

Solid financial performances

EBITDA came to €166.6 million, an increase of 0.4%. The EBITDA/sales ratio was 28.9%, compared with 29.5% in 2007-2008.

Ski-areas EBITDA fell 3.3% because of a strong decline in land-sales transactions. Adjusted for these factors, EBITDA of ski lifts rose 1.6% to €2 million, up from the record year 2007-2008, thanks to extremely rigorous cost management.

Leisure park EBITDA rose twice as fast as sales: +12.9%. This change was due not only to consistent business performance but also to the management of operating costs, which rose only because ofincreased activity.

Operating income remained stable at €83 million, despite an exceptional provision taken of €3million.

Better interest rates and aggressive debt reduction carried out during the fiscal year allowed for a strong decline in the cost of net debt, which improved by €6.5 million (-25.5%).

Net attributable income reached €40.2 million, a rise of 11%.

Group operating cash flow rose 8%. Free cash flow was multiplied by 2.8x to €57 million, a record.

This accelerated the trend that this indicator began four years ago.

A dividend of €1 per share will be submitted at the Annual Shareholders’ Meeting on March 18, 2010. This would maintain a high payout ratio of 44% of attributable net income. An alternative sharebased dividend payment will also be submitted to shareholders.

Financial structure

Thanks to performances in free cash flow and to the effects of selling nonstrategic shareholdings (Téléverbier, SMVP, and Saas Fee Bergbahnen, whose disposal came after the close but whose debt has been adjusted for in the balance sheet at September 30, 2009)1, Group net debt fell by more than €100 million. The net debt/shareholders’ equity ratio improved from 22%, to 0.78. The net debt/EBITDA ratio improved from 3.25 to 2.77, with all banking covenants respected.

2009-2010 outlook

The following items should impact the 2009-2010 financial year:

Ski areas:

Full consolidation of Deux Alpes Loisirs, acquired on December 8, 2009, in the framework of a consortium of which CDA holds 60% of the capital, with the rest held by Caisse des Dépôts et Consignations (19%), Banque Populaire des Alpes (12.6%), and Caisse d’Epargne Rhône Alpes (8.4%). 2008-2009 sales of this company came to around €40 million, for 1.3 million skier-days.

Visitor numbers for the season are not easy to forecast because of changes in accommodation reservations (last-minute reservations and erratic trends). The level of inventory as of mid-November is tending to drop off, especially with Christmas approaching.

Satisfactory snow conditions at the beginning of the season and good production of snow.

An expected standard price effect of between 2.5% and 3%.

Leisure parks:

The season began with the major success of the Toussaint/Halloween festivities.

Continued optimization and management of distribution channels in order to maintain average prices.

Research in innovation, both in marketing and events, with the aim of fixing seasonal events to develop visitor numbers outside the summer months and to improve visitor satisfaction.

Changes in corporate governance

Last March 19, CDA shareholders approved changes in the methods of governing and managing the company. Since then the Group has been administered by a 12-member Board of Directors, chaired by the Chief Executive Officer. This change aims to bring management to the Group that is more
integrated, more responsive, and better able to bring about the needed modification of the Group’s economic model.

(1 The associated debt reduction effect was around €25 million for the fiscal year 2008/2009. Disposal income (around €10.5 million) and related gains (around €1.5 million) will impact results of fiscal year 2009-2010.)

In this framework, the Group established on October 1 a new organizational structure to encourage full expression of the expertise and skills that exist in the Group. The Group also took pains to implement internal industrial synergies. To accelerate the Group’s strategic, financial, and organizational transformation, a position of Deputy Managing Director was created, and Franck Silvent assumed this role on October 1, 2009.

On December 15, 2009, the Board of Directors appointed Rachel Picard and Georgio Frasca as directors, replacing Compagnie Européenne des Loisirs and Philippe Nguyen, who resigned from their terms of office following the sale by Compagnie Européenne des Loisirs of its stake in the Company at end-September 2009. The ratifications of these appointments will be submitted to the Shareholders’ Meeting of March 18, 2010.

With the appointment of Mrs. Picard and Mr. Frasca, the number of independent directors has risen significantly, both on the Board, where henceforth there will be four, but also on specialized committees. There will be three independent directors (out of six directors) on the Strategy Committee. There will be a majority on the Appointments and Remunerations Committee, with three directors out of four, including the Chairman of said committee.

Rachel Picard, 42 years old, has been President of Voyages-sncf.com since 2004, having served previously as Vice-President in charge of marketing, sales, and corporate operations. She has worked in various managerial positions in the tour operating sector, particularly at Frantour. She began her career as Head of Sales at the ski resort of Valle Nevado in Chile, before moving to Euro Disney.

Georgio Frasca, 68 years old, was trained as a lawyer. In November 2006 he was appointed Vice-Chairman of Lazard International in the Lazard Frères bank. Much of his career was spent at Fiat in the United States. He was appointed Chief Executive of Fiat France in 1981. In 1985 he was named
Head of International Activities for the group. Throughout this time he contributed to significant strategic operations in different sectors, especially for the Agnelli Goup.

Important dates:

Q1 sales: January 21, 2010
General Meeting of Shareholders on March 18, 2010 at 3:00 p.m.

About Compagnie des Alpes

Compagnie des Alpes is a major player in the field of leisure production in Europe. The company operates 37 leisure sites, including 16 leading ski areas in the Alps (including Tignes, Val d’Isère, Les Arcs, La Plagne, Les Menuires, Méribel, and Chamonix) and 21 leisure parks (including Parc Astérix, Grévin, Walibi, etc.) in seven European countries: France, Italy, Switzerland, the Netherlands, Belgium, Germany, and the UK. Consolidated sales were €576 million (23 million visitors) for the financial year ending September 30, 2009.