Consolidated Financial Results Fiscal Year 2003 EURO DISNEY S.C.A.

Transcription

1 Consolidated Financial Results Fiscal Year 2003 EURO DISNEY S.C.A. November 17, 2003

2 André Lacroix Chairman and CEO Euro Disney

3 2003 Situation Strategic analysis and new management methodology New 2004 actions

4 Disneyland Resort Paris / Theme Park Leader Leading European Theme Parks (2002*) Attendance ('000 guests) * FY 03 figures 0 DLRP Park 1 Park 2 Park 3 Park 4 Park 5 Park 6 Park 7 Source: Revenue Development and Consumer Knowledge, FY 03 except for type of Park ticket (October FY 04)

5 High Guest Satisfaction Intent to recommend / revisit has also reached high rates Intention to recommend Intention to revisit No No Probably 1 % 6 % Probably yes yes 9 % 27 % Definitely yes 90 % Definitely yes 67% Source : Consumer Knowledge, FY 02 and FY 03 Guest Satisfaction Barometer

6 2003 Situation Strategic analysis and new management methodology New 2004 actions

7 Jeffrey R. SPEED Senior Vice President and Chief Financial Officer Euro Disney S.C.A.

8 Business Context Fiscal Year 2003 Financial Results Liquidity Outlook

9 Business Context: General Challenging macro-economic and geo-political environment Difficult year for the entire travel and tourism industry Visibility with respect to bookings remains somewhat clouded Price discounting across the industry

10 Business Context: Euro Disney First Semester Increase in top line revenues, primarily in first quarter => Revenues increase 8% Increased costs and expenses linked to the new two-park Resort => Decreased EBITDA Margin* As % of revenues: 12% vs 19% in FY 02 *Before royalties and management fees

11 Business Context: Euro Disney Second Semester Decline in volume during second semester => Revenues down 9% Prudent yield management to preserve pricing Management implemented proactive cost control measures => Stable EBITDA Margin* As % of revenues: 29% vs 30% in FY 02 *Before royalties and management fees

12 Business Context Fiscal Year 2003 Financial Results Liquidity Outlook

13 2003: Consolidated Statement of Income - As Reported (in millions of euros) 2003 As reported 2002 Variation % Revenues (22.9) (2.1)% Costs and Expenses (920.7) (900.3) (20.4) 2.3% Income before Lease & Financial Charges (43.3) (24.6)% Lease and Net Financial Charges (200.3) (170.8) (29.5) 17.3% Exceptional income (loss) 11.9 (38.0) Net Loss (56.0) (33.1) (22.9) 69.2%

14 Fiscal Year 2003 Results: Basis of Presentation As-reported results reflect adoption of required change in accounting principle To enhance comparability between fiscal periods, we will present FY 03 before taking into account the accounting change Impact of accounting change is a decrease of 11 million in Net Income ( 20 million decrease in EBITDA offset by 9 million decrease in Depreciation and Amortisation) In addition, due to the waiver on Royalties and Management Fees for the last three quarters of FY 03 (a reduction of 27 million), we will focus our discussion on EBITDA before Royalties and Management Fees

15 2003: Key Financial Results 2003* 2002 Variation (in millions of euros) % Revenues (22.9) (2.1)% EBITDA before Royalties and Management Fees (49.2) (17.9)% As % of revenues 22% 26% (4) ppt *Before accounting change

16 The Resort Segment (in millions of euros) 2003* 2002 Variation % Revenues (19.2) (1.8)% EBITDA Before Royalties and Management Fees (47.4) (18.0)% As % of revenues 21% 25% (4) ppt *Before accounting change

17 The Resort Segment: Focus on Theme Parks Theme Parks Variation % Revenues (in millions of euros) (17.5) (3.3)% Attendance (in millions) (0.7) (5.3)% Average guest spending % (in euros, excluding V.A.T)

18 The Resort Segment: Focus on Hotels Hotels and Disney Village Variation % Revenues (in millions of euros) % Occupancy 85.1% 88.2% (3.1)ppt Average spending per room % (in euros, excluding V.A.T)

19 Real Estate Development Segment Variation (in millions of euros) % Revenues (3.7) (13.6)% EBITDA before Royalties and Management Fees (1.8) (14.5)% As % of revenues 45% 45% -

20 Operating Costs Evolution (in millions of euros) 2003* 2002 Variation % Direct operating costs % Marketing and Sales costs % General and Administrative costs % Sub Total Operating Costs % Royalties and Management fees (27.4) (77.2)% Depreciation and amortisation % Operating Costs % *Before accounting change

21 Increase in Lease and Financial Charges in Line with Expectations Variation (in millions of euros) % Lease and Financial Charges % Increase mainly due to: - Increase in principal reimbursement by the financing companies (incl. in lease) Increased interest charges Other +1.8

22 Exceptional Items (in millions of euros) 2003* 2002 Variation Income (Loss) before Exceptional Items (57.3) 4.9 (62.2) - Exceptional income (loss) 11.9 (38.0) % % Net Loss (45.4) (33.1) (12.3) 37.2% *Before accounting change

23 Cash Balances (in millions of euros) Variation Beginning Cash Equivalent Balance (527.1) Cash flow from Operating Activities Proceeds from Fixed Assets Sales Capital Expenditures and Other (74.2) (271.1) Cash flow used in Investing Activities (28.8) (269.7) Cash Flow used in Financing Activities (34.6) (306.1) Ending Cash Equivalent Balance

24 Business Context Fiscal Year 2003 Financial Results Liquidity Outlook

25 Modification of Royalties and Management Fee Payments on March 28, 2003 Royalties and Management Fees for the last three quarters of fiscal year 2003 were waived Modification of payment terms for fiscal year 2004 (fiscal year-end payment rather than quarterly) The waived amounts relating to fiscal year 2003, may become due to the extent that EBITDA exceeds 450 million in any fiscal year from 2004 to 2008

26 Additional Liquidity Efforts Limited programme of asset sales with gross proceeds of 45 million Debt Security Deposit reduction until March 31, million subordinated credit line from The Walt Disney Company

27 Conclusion: First Semester FY 04 Outlook Our current forecasts do not assume a recovery until second semester FY 04. Barring any unforeseen events, sufficient liquidity until March 31, Between now and March 31, 2004, we will work with our various stakeholders to find a long-term resolution to our financial challenges. At the same time, we will remain focused on managing and relaunching the business.

28 2003 Situation Strategic analysis and new management methodology New 2004 actions

29 Opportunity for Growth Linked to Penetration Rates Total European Population* DLRP European Core Target ** 16 % Visitors (52M) 25 % Visitors (30M) Non visitors Non visitors Total Population: 329 M Total Core Target: 122 M * Includes France, UK, Germany, Benelux, Italy and Spain ** Core target: families with children (3 to 15) + young adults (20 to 35) - rejecters + kids core target + income qualifier- Source: Advancy Consulting, LabLB May 2001

30 Growth Opportunity for Parks Attendance In Mil Guests U.S. CAGR U.S. 3.4% EMEA 4.1% EMEA FY'98 FY'99 FY'00 FY'01 FY'02 FY'03 FY'04 FY'05 FY'06 FY'07 N.B.: data related to leisure and theme parks and taking into account the free-entrance Parks in which the rides are not free. *Includes the Middle East nd Africa **based Population of 14 European Union countries (not including Greece and Switzerland) Source: PricewaterhouseCoopers

31 2003 Situation Strategic analysis and new management methodology New 2004 actions

32 2003 Situation Strategic analysis and new management methodology New 2004 actions

33 2003 Situation Strategic analysis and new management methodology New 2004 actions

34 New 2004 actions A new marketing strategy A new management team A new capital structure

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37 New 2004 actions A new marketing strategy A new management team A new capital structure

38 New 2004 actions A new marketing strategy A new management team A new capital structure

39 New 2004 actions A new marketing strategy A new management team A new capital structure

40 Our Four Strategic Assets The Disney brand A complete tourist destination in the heart of Europe Unique know-how to bring legends and fantasy to life and provide unforgettable memories Cast Members who are devoted to their work

41 Consolidated Financial Results Fiscal Year 2003 EURO DISNEY S.C.A. November 17, 2003