Without further delay, here are main points:
‘¢ Revenues increased 12% to € 1,220 million, reflecting volume growth in theme parks
attendance and hotel occupancy
‘¢ Operating margin at € 51 million, against a prior year loss of € 2 million
‘¢ Net loss reduced by over 50% to € 42 million
‘¢ Attendance increased 13.3% to 14.5 million, against a prior year figure of 12.8 million
‘¢ Hotel occupancy increased 5.8ppt to 89.3%
So, as widely expected, they didn’t hit a profit just yet, but future is certainly looking bright. With overall revenues increasing by a massive 12%, reflecting the growth in park attendance and hotel occupancy, the group can claim individual revenue increases of 14% for the theme parks division and no less than 17% for hotels.
Bringing the total revenues to € 1,220.3 million, this leaves a nice operating margin of €51 million between revenues and costs & expenses, swallowed, unfortunately, by the € 92.2 million of financial charges. Before depreciation and amortization (what we can basically read as “dealings to do with that whole load of debt they’ve got”), this operating margin was in fact even higher at € 205.7 million.
Always the most interesting section for fans of the resort, this year the stats give real reason to celebrate. The resort’s previous attendance record for its two parks stood at 13.1 million guests, for the opening year of Walt Disney Studios Park in 2002. Last year they reached a second-place high of 12.8 million.
Between November 2006 and October 2007? 14.5 million guests. Read it again, 14.5 million! That’s an increase of 1.7 million over the previous year and 1.4 million higher than the Studios’ opening year.
Driven mainly be an increase in guests from Spain (as we’re sure you noticed…), France and Italy, numbers like these are fantastic news on their own. When we now consider the resort has yet to open the big-hitter E-Ticket that is The Twilight Zone Tower of Terror (and its exceptional advertising campaign), unveil the full Hollywood placemaking transformation at the park and introduce the massively popular “Living Character” concept to Europe with Stitch Live… next year’s results might be an even bigger surprise.
Over at the hotels, things are just as good — if not better. Following a slump in occupancy from 2001 onwards, the hotels grew their room-filling figures from 83.5% to a touching-on-spectacular 89.3%, equivalent to 123,000 extra room nights across the year.
Disneyland Resort Paris isn’t completely in the clear, though. Guest spending in the parks continues to be rather stagnant, from the looks of the figures driven only by the regular annual ticket price increases. At the hotels, spending per room increased 10% mainly thanks to price increases at certain hotels.
Of course, you can’t deny the fact that still having a € 40 million loss with guest numbers reaching 14.5 million is worrying. Regarding some of the exceptional costs relating to the 15th Anniversary celebration, however, it could be a loss worth… losing. The quality of the “Disney experience” here has never been higher, giving guests more reason to return, and special offers such as “Kids Under 7 Stay & Play Free” have clearly been a huge success in attracting new visitors.
Clearly, with a € 50 million operating margin, the resort is — or rather, could be — a profitable enterprise. The burden of its immense debt, however, continues to drain…
However, if there’s one person determined to squeeze a real profit from the resort, it’s Karl Holz, Chairman and Chief Executive Officer of Euro Disney S.A.S.. It’s remarkable that this CEO hasn’t gained the cult following of say, Disneyland Resort (California)’s Matt Ouimet, considering the vast changes the resort has seen since his arrival as Chief Operating Officer, and subsequently CEO.
His message for the report reads as follows, again thanking the cast members themselves and speaking of the “experiences with only Disney can provide”, a favourite expression:
“This year’s results, marked by a positive operating margin, were driven by volume growth in parks attendance and hotel occupancy and an increase in average spending per room. In 2007, we kicked off the 15th anniversary celebration by introducing a fantastic new parade and compelling new attractions.
This year’s solid performance was made possible through the continued dedication and commitment of all our cast members, many of which celebrated their personal 15th anniversary with the Company this year.
We look forward to continuing the celebration in fiscal year 2008 with the introduction of The Twilight Zone Tower of Terror attraction and Stitch Live; new experiences which only Disney can provide.
In 2008, we will continue to execute our growth strategy and remain focused on driving this business toward profitability.”
Mr Holz, we’re behind you every step of the way.
— You can read the Annual Report in full here (PDF, new window).