Theme Parks: A look at EuroDisney's 2010 results Blooloop

In the year to 30 September 2010 EuroDisney is reporting improved operating results:

• Revenues up 4% to €1, 276 million, driven by an increase in average spend per guest to €45.3 from €44.22 in 2009, offset by declining attendance (15.0 million visitors in 2010 compared to 15.4 million in 2009).

• Operating costs and expenses increased 3% to €1, 242 million largely due to increased labour costs.

• EBITDA increased 8% to €202 million and EBIDTA as a percentage of revenue increased from 15.2% in 2009 to 15.8%, still significantly down on the 18.8% recorded in 2008.

The results also show a significant improvement in cashflow generated from operating activities: €237million for 2010 compared to €124 million in the previous year. However, this increase is achieved after transferring a significant chunk of royalties, management fees and interest from working capital into long term debt ( €70 million relating to 2009 and €25 million attributable to 2008). EuroDisney is limited on the amount that can be deferred each year by the terms of its loans. The €45.2 million deferrals with respect to 2010 take it up to its maximum position and as such the lenders now get a say in the investment budget:

“As a result of utilizing the entire EUR 45.2 million of deferrals available to the Group with respect to the Fiscal Year, the Group must agree with the agent banks of the Group’s lenders on the method to calculate the recurring annual investment budget for fiscal year 2011 and thereafter. If no agreement is reached, the recurring annual investment budget will be reduced, principally from 5% to 3% of the prior fiscal year’s adjusted consolidated revenues. For fiscal year 2011, the impact of using this different method would lower the Group’s recurring investment budget by approximately EUR 25 million.”

Cash and cash equivalents at the end of the year are €400m and scheduled debt repayments for 2011 are €123million. In October EuroDisney announced its intention to pay back 25% of its €2billion debt by 2013 as well as continuing with the development plans set out in the amendment to the existing partnership agreement with the French State revealed in September. The 2010 results do show modest improvements in operating performance, although the Group did not meet its annual performance objectives. Given his ambitious plans to reduce debt at the same time as embarking on an expansion programme, Philippe Gas, Chief Executive Officer of Euro Disney S.A.S, would appear to have his work cut out for him.

Commenting on the results, Gas said:

"In a year marked by the difficult economic context and challenging travel conditions, we achieved 15 million in attendance at our parks and 85% occupancy in our hotels, remaining Europe’s number one tourist destination. Resort revenues were stable versus the prior-year, as an increase in guest spending offset lower attendance and occupancy. Total revenues ended the year up 4%, reflecting increased real estate revenues from a property sale in Val d’Europe.

During our second semester, we launched Disney’s New Generation Festival and saw a marked improvement in both attendance and hotel occupancy, while growing guest spending. In August, we opened Toy Story Playland, with three new attractions in the Walt Disney Studios Park, bringing the magic of these popular Toy Story films to life. Iconic Disney-themed attractions and entertainment, together with great guest service delivered by our Cast Members, continue to create magical moments for our guests.

On September 14, we signed an important amendment to our existing partnership agreement with the State and other public parties, which outlines the future development of Disneyland Paris and the town of Val d’Europe. This amendment marks a significant milestone in the history of our company, and enhances our ability to further develop the Resort and surrounding area over the next twenty years."