Compagnie Des Alpes - 1st Half 2019-2020 Sales Hit By The First Fallout From Covid-19
As indicated on March 13thand 15thof this year, Compagnie des Alpes was forced to close all of its ski resorts prematurely, as well as those of its leisure parks that were already open, in compliance with the decisions made by public authorities in the countries where the Group operates, in order to fight against the spread of Covid-19. These closures had a significant impact on sales for the second quarter of 2019/2020, which ended March 31, 2020.
Despite a good first quarter and a solid level of sales up to the dates on which the affected sites closed, consolidated sales through the first six months of FY 2019/2020 for Compagnie des Alpes reached €470.5 million, a contraction of 5.6% (-6.2% on a comparable scope basis) compared with the first half of the previous financial year.
Consolidated sales, October 1, 2019 through March 31, 2020
|
Unaudited data |
1sthalf |
1sthalf |
Change |
Change |
|
2019/2020 |
2018/2019 |
Comparable |
||
|
(In thousands of €) |
scope(1) |
|||
|
Ski Areas |
350 183 |
384 660 |
-9.0% |
-9.0% |
|
Leisure Parks |
103 167 |
93 131 |
+10.8% |
+7.2% |
|
Holdings & Support |
17 152 |
20 401 |
-15.9% |
-15.9% |
|
Total |
470 502 |
498 192 |
-5.6% |
-6.2% |
(1): The change on a comparable scope basis excludes Familypark sales (Leisure Parks), consolidated as of April 1, 2019.
SKI AREAS:A SATISFACTORY SEASON UNTIL THE EARLY CLOSURE OF RESORTS
Ski Area sales for the first six months of FY 2019/2020 reached €350.2 million which, due to the early closure of ski resorts on March 14, 2020, is a sharp decline of 9.0% versus the first six months of the preceding year. Lift ticket sales alone fell by 9.2%. Accordingly, neither the number of skier days (-11.4%) nor the average revenue per skier day (+2.2%) constitute indicators that are representative of sales for the period under review.
After a dynamic start to the season, notably during the second week of Christmas vacation, sales remained satisfactory until March 14, 2020. On this date, which was the date on which all of the Group's ski resorts were forced to close, the increase in sales since the beginning of the season was around 2.5%.
The early closure of ski resorts thus eliminated sales for the second quarter during a two-and-a-half-week period that usually makes a strong contribution to revenue. Sales for the second quarter thus declined by €39.9 million, or -12.1% compared with the same period one year prior.
LEISURE PARKS:A GOOD FIRST HALF BUT THE REMAINDER OF THE SEASON IS IN DOUBT
Leisure Park sales for the first six months of FY 2019/2020 were up by a substantial +7.2%, on a comparable scope basis versus the same period last year. Factoring in the acquisition of Familypark, sales totaled €103.2 million, an increase of +10.8% that was driven by the 7.4% increase in attendance, in addition to a 3.4% rise in spend per visitor.
Business was particularly dynamic over the course of the first quarter (+16.1%) thanks to the strategic initiatives deployed by the Group, particularly during the Halloween period and at the end of the year, with the successful opening to the general public of Parc Astérix for the first time ever during the Christmas school holiday season. Sales growth was also driven by the Bellewaerde Aquapark, which is still in its first year of operation, as well as the increased hotel capacity at Parc Astérix and the acquisition of Familypark.
For the six facilities that were open, this solid dynamic continued over the course of the second quarter, most notably at Futuroscope, until mid-March, when the Group had to shut them down in compliance with official orders from governments in France, Belgium, Switzerland, and Canada, for the purpose of fighting the spread of Covid-19. As a result, despite the elimination of two-and-a-half weeks of operation, sales for the second quarter reached €22.7 million, which is slightly lower than the level seen for the same period one year earlier.
In total, from the start of the season through mid-March the Leisure Parks division posted growth of 12.1% on a comparable scope basis and 15.9% on a reported basis.
HOLDINGS & SUPPORT:SALES ALSO MARKED BY COVID-19
Over the course of the first six months of financial year 2019/2020, sales for the Holdings & Support division fell by 15.9%, to €17.2 million. The confinement order in force in France and across Europe had an adverse impact on Travelfactory and the real estate agencies toward the end of the period.
The consulting business was penalized by the timing of contracts compared with the first six months of the previous financial year.
THE REST OF THE FINANCIAL YEAR AND MEASURES RELATED TO COVID-19
- Ski Areas
The winter ski season ended definitively on March 14, 2020. At this time, there is no guarantee that the ski resorts will reopen for the summer season but, as a reminder, the 4thquarter represents less than 2% of annual sales for this division. Accordingly, despite the good performances recorded up to the date of the closure, the Group confirms that it expects annual sales from Ski Areas to be down by around 20% compared with the preceding financial year, a decline of €85 million to €90 million.
- Leisure Parks
Today, all Compagnie des Alpes parks are closed. They will be reopened on a case-by-case basis, in accordance with the recommendations of the public authorities in the countries or regions where they are located and in compliance with the preferred scenarios pertaining to ending confinement. Compagnie des Alpes teams thus remain fully mobilized and prepared to be operational so that parks can be reopened quickly when the time comes while complying with all relevant public health and safety guidelines imposed. Whatever the operating conditions under which the parks will be allowed to operate after they are reopened, the Group's top priority remains ensuring the health of its employees, customers, and all the people with whom the Group interacts, in a spirit of responsibility aimed at continuing to fight the spread of Covid-19.
As a reminder, sales for this division in the 3rdquarter of 2018/2019 amounted to €117 million.
- Cost adjustment plan
As Compagnie des Alpes indicated in its March 30threlease, given the lack of visibility, linked mainly to the uncertainty of the dates for the reopening of leisure parks, it remains premature to estimate the impact of the situation on 2019/2020 results. As a reminder, the Group has also suspended the 2019/2020 EBITDA margin targets that it communicated for each of its two divisions last December.
The day after the closure of its sites, the Group launched a major cost adjustment plan. Compagnie des Alpes has nearly 5,000 FTEs (full-time equivalent employees), of which almost 60% are seasonal workers. The part-time work measures concern both permanent and seasonal employees, encompassing 90% of the workforce. The workforce has been adjusted to ensure the upkeep, maintenance and security of the sites. Hires for the summer period will be based on reopening dates. The other items in this plan relate to energy savings, variable costs, and reductions in or postponements of other operating costs.
The Group thus confirms the estimate communicated on March 30th, according to which the loss of revenue during the periods of closure of its sites could be offset, for a little more than 40%, by this plan to reduce operating costs, both for ski areas and for leisure parks.
- Investments
In order to limit its cash outflows and protect its financial situation, the Group has decided to adjust, insofar as possible and in compliance with its contractual commitments, its investment plans for the end of the 2019/2020 financial year. The situation is, however, very different for its two divisions.
For Leisure Parks, almost all of the investments planned for the financial year have already been made or are committed. Flagship projects such as the third hotel at Parc Astérix and the major attractions to be inaugurated at Futuroscope and Bellewaerde are therefore not called into question and will open as soon as possible.
Most of the adjustments that the Group will be able to carry out this year will therefore concern the Ski Areas, with spring traditionally corresponding to a major investment phase. The Group has decided to postpone until next season certain expenditures not yet committed.
In total, the Group estimates that it will be able to reduce its investment budget for the 2019/2020 financial year by around €30 million. It has also already planned to seek ways to reduce its investment spending during the next financial year, 2020/2021, in particular with regard to Leisure Parks, with the aim of enhancing the attractiveness of its sites.
- The Group's liquidity position
As of March 31, 2020, the Group's net debt amounted to € 465.3 million. At the same date, it had nearly
- 300 million in cash, undrawn lines of credit and overdraft. Finally, the Group has no significant debt maturities by the end of the year. Given itslong-term financing structure, the adjustment measures adopted, and the possibility of using additional credit lines, the Group remains confident in its ability to cover its liquidity needs until the end of the year, including under a deteriorated scenario.
- Measures pertaining to executive pay
In the challenging context that the Group is going through, the Chairman and Chief Executive Officer has decided to lower his fixed compensation by 20%, while the other members of the Executive Committee as well as site managers have decided on 15 % and 10% decreases in their pay, respectively. Lastly, the members of the Board of Directors have decided to waive their directors' fees. These measures are applicable for the duration of the confinement period.
|
Upcoming events: |
||
|
• |
Half-year 2019/2020 results: |
Tuesday, May 26, 2020, after stock market closes |
|
• |
3rdquarter 2019/2020 sales: |
Thursday, July 23, 2020, after stock market closes |
|
•4thquarter 2019/2020 sales: |
Thursday, October 22, 2020, after stock market closes |
ADDITIONAL INFORMATION
Consolidated sales, October 1, 2019 through March 31, 2020
|
Actual scope |
Comparable scope |
|||||
|
(In thousands of) |
FY |
FY |
Change |
FY |
FY |
Change |
|
2019/2020 |
2018/2019 |
2019/2020 |
2018/2019 |
|||
|
1stquarter: |
||||||
|
Ski Areas |
60 050 |
54 608 |
+10.0% |
60 050 |
54 608 |
+10.0% |
|
Leisure Parks |
80 459 |
69 309 |
+16.1% |
77 744 |
69 309 |
+12.2% |
|
Holdings & Support |
3 050 |
2 902 |
+5.1% |
3 050 |
2 902 |
+5.1% |
|
Q1 Sales |
143 559 |
126 819 |
+13,2% |
140 844 |
126 819 |
+11.1% |
|
2ndquarter: |
||||||
|
Ski Areas |
290 133 |
330 052 |
-12.1% |
290 133 |
330 052 |
-12.1% |
|
Leisure Parks |
22 707 |
23 821 |
-4.7% |
22 123 |
23 821 |
-7.1% |
|
Holdings &Support |
14 102 |
17 499 |
-19.4% |
14 102 |
17 499 |
-19.4% |
|
Q2 Sales |
326 943 |
371 372 |
-12.0% |
326 359 |
371 372 |
-12.1% |
|
1sthalf: |
||||||
|
Ski Areas |
350 183 |
384 660 |
-9.0% |
350 183 |
384 660 |
-9.0% |
|
Leisure Parks |
103 167 |
93 131 |
+10.8% |
99 868 |
93 131 |
+7.2% |
|
Holdings & Support |
17 152 |
20 401 |
-15.9% |
17 152 |
20 401 |
-15.9% |
|
H1 Sales |
470 502 |
498 192 |
-5.6% |
467 203 |
498 192 |
-6.2% |
1: The change on a comparable scope basis excludes Familypark sales (Leisure Parks), consolidated as of April 1, 2019.
