The French daily Le Parisien revealed that the net loss of EuroDisney SCA may widen from 33.1 million Euro in 2001/2002 to 58 million Euro in 2002/2003 with guest numbers actually decreasing by 600,000 to 12.5 million. EuroDisney SCA has conceded that the company faces major obstacles but declined further comment pointing out that the official numbers won't be released prior to mid-November. Le Parisien had obtained his information from a "source in the know" which it did not identify prompting investigation by EuroDisney SCA as it was pouinted out that the report of Le Parisien was based on non-audited numbers avialable in an internal paper only that was supposed to be confidental. Le Parisien went on to state that the operating costs actually exceed the income of the company.
This major leak brought at least one good result: Prince Alwaleed bin Talal increased ints efforts to help the company refinance its 2.2 billion Euro debt. The prince, a major shareholder since the first financial crises who had been forced to reduce its holdings in the company during the issuing of new shares to finance the second gate, already started talks with the banks and the company when EuroDisney SCA earlier this revealed its problematic financial situation originally. The shares quickly regained their old value from before the news release after an initial 6.5 percent drop.

Die französische Tageszeitung Le Parisien hat gemeldet, dass EuroDisney SCA seinen Verlust von 33,1 Millionen Euro 2001/2002 auf 58 Millionen Euro 2002/2003 "gesteigert" hat, während die Zahl der Gäste um 600.000 auf 12,5 Millionen gefallen sei. EuroDisney SCA hat eingestanden vor erheblichen Problemen zu stehen, wollte die Meldung aber nicht weiter kommentieren, da sie auf Zahlen aus einem vertraulichen internen, noch nicht abschließenden Papier beruhe. Stattdessen wurden Untersuchungen zur Quelle der Indiskretion eingeleitet. Le Parisien meldete des Weiteren, dass die Einnahmen in diesem Geschäftsjahr geringer als die Betriebskosten ausgefallen seien. Genaueres wird wohl aber erst die Bekanntgabe des Jahresergebnisses Mitte November enthüllen.
Etwas gutes hat die Meldung jedoch auch gebracht: Prinz Alwaleed bin Talal hat seine Bemühungen verschärft, der Gesellschaft bei der Refinanzierung ihrer Belastungen von 2,2 Milliarden Euro zu helfen. Der Prinz, selbst einer der führenden Aktionäre seit der ersten Krise der Gesellschaft, der allerdings im Rahmen der Ausgabe neuer Aktien zur Finanzierung des zweiten Parks gezwungen war, seinen Anteil zu reduzieren, hatte bereits früher dieses Jahr, als erstmals die prekäre finanzielle Lage der Gesellschaft bekannt wurde, Gespräche mit dieser und diversen Banken aufgenommen, die nun intensiviert wurden. Die Aktien von EuroDisney SCA erholten sich übrigens schnell wieder von einem ersten Verlust von 6,5 Prozent.

September / October is the time frame for the eagerly awaited announcement of the new strategy for the resort by its CEO André Lacroix, which is supposed to signal the beginning of a new era. With his revelation of the long rumoured but financial crises in the wake of the under performing second theme park earlier this summer - perfectly timed to coincide with the release of positive financial results of the Walt Disney Company – André Lacroix has given himself the opportunity to take drastic steps to save Euro Disney S.C.A. once again. And now first titbits of the new strategy are leaking out … at the center of the whole strategy seems to stand the ultimate theme “Return to the Roots”, “Concentration on the Core Product”. In the case of the Disneyland Resort Paris André Lacroix wants the whole company to concentrate once again on its main assets, the theme parks with their attractions and the Disney Hotels. The later are supposed to be up for some major, substantial refurbishments to return them to their original level of quality after years of wear and tear with only minor rehabs that have started to damage the reputation of the hotels. In the meantime especially the Walt Disney Studios are supposed to be expanded as the new CEO repeatedly pointed out, that the park is not yet a true one-day-experience, which it needs to be to satisfy the guests. Certainly the financial restraints force some cut backs to finance these two major projects. If André Lacorix is not convinced otherwise minor events and festivals that create huge bills for only temporary makeovers and decoration without any major impact on guest attendance will get scaled back or totally cancelled. This is not meant to include major guest magnets like the Halloween Festival or the Christmas Season but e.g. the Princess Week. But then these are only the first rumored elements of the strategy that hopefully promises a whole new world...

EuroDisney S.C.A. is not yet sending their managers out to beg guests like that but the company behind the Disneyland Resort Paris is facing a rather dire financial future as it had to admit Thursday the 31st of July when it released the revenues for the first nine months of the fiscal year 2003. In fact the message was so bad that brokers issued warnings in such stern ways that a pre-opening drop of 15% at the bourse of Paris delayed the opening of trading of Euro Disney S.C.A. shares on Friday which ultimately opened without the share being able to regain much. What had happened late on Thursday?
With the release of the revenues for the first nine month of the current fiscal year the company had not only to admit that it had fallen way behind its own forecasts and would not achieve its own goals but also that based on these numbers and revised forecasts the company is expecting not to be able to meet its debt agreements “beginning with the June 2004 maturity of its 167.7 million-euro credit line with the Walt Disney Co., or sooner, if the company's lenders were to accelerate (...) the maturity of approximately 1.7 billion euros worth of debt”. The dire financial situation was not blamed on the rather weak reception of the second theme park opened last spring - which has been sited by fans and experts repeatedly when rumours about financial troubles first appeared – but a general down-turn in the tourism sector due to the overall state of the economy and security fears (called a “sustained and significant slowdown in European travel”), plus the negative impact of the numerous strikes that hit France earlier this year. This seemed a rather weak point as EuroDisney S.C.A. also pointed out that it won’t be able to meet its own forecasts for attendance in 2003 and(!) 2004, neither in the two theme parks nor at the hotels, even so statements as late as this spring emphasized the need of adding additional hotels to satisfy the demand. The number of 16 million guests at the two theme parks combined which had been expected for this fiscal year, the first full fiscal year in which the second gate is open is now only forecasted to be reached “in time”, but “it won't be this year” as a spokesperson explained.
The statement of EuroDisney S.C.A. went to length to assure that the future of the company would not be endangered as talks with the lender banks and the Walt Disney Company had already been opened to renegotiate the debt agreements, revamp the credit, “secure the necessary bank covenant waivers or modifications and supplemental financing”. Even so the analysts mostly issued “stay away” statements, there seems to be no imminent danger of the company’s collapse, as analyst Aurel Leven of Tristan d'Aboville explained to Reuters, "given Euro Disney's strong ties with local authorities that will continue to support the group - but the situation of Euro Disney is a big worry". This mostly refers to the state owned CDC Bank which is backing the company due to its important role in the regional development. The Walt Disney Company already agreed earlier this year to defer the payment of royalties and fees for fiscal year 2004 to the first quarter of fiscal year 2005 and waive them completely for the second, third and fourth quarter of this fiscal year. EuroDisney S.C.A. also emphasized that a good August and Summer might translate in a better fourth quarter as average guest spending per room at the hotels had increased significantly compared to the fiscal year 2002, even so this was offset due to third-quarter theme park attendance and hotel occupancy below prior-year levels.
The hard numbers: while overall revenues for the first nine months were up 2% the third quarter revenues were down 7% compared to the prior year. The total revenues clocked in at 748.2 million Euro of which 352.6 million Euro stemmed from the theme parks which generated only an increase of 1% compared to 6% at the Disney Hotels and the Disney Village (total: 307.1 million Euro). These gains were offset by a reduction of 5 million Euro (6%) in the other segments of the resort business and decrease by 18% in the real estate development segment in line with expectations. Interestingly the 1% gain in the theme parks segment is credited to an increase of guest numbers due to the fact that the WDS opened only during the comparison period of time in 2002 but that increase was offset itself anyway at least partially due to lower average spending per guests that sharply differs from the “strong increases” of average spending per room at the Disney Hotels which boosted a “stable occupancy” over the nine month period till the 30th of June. The revenue increase by 8% at the Disney Village is credited to the higher guest numbers due to the Walt Disney Studios. The numbers of the third quarter (April, May, June) reflect an impact of a slowdown of European travel and general economic problems to a greater extent than anticipated. Translation: total revenues down 7% to 275.6 million Euro mostly due to a terrible performance of the resort segment which lost 9% to 268.8 million Euro, even so EuroDisney S.C.A. pointed out that the Grand Opening of the WDS last year resulted in an unusual strong performance in this quarter. These numbers reflect the lower attendance level and occupancy both at the theme parks and the hotels compared to the third quarter 2002. The smaller decrease of the total revenue compared to the resort segment revenues was due to an increase in real estate development revenues in the third quarter by 50% to 6.8 million Euro.
To help ease the situation at least EuroDisney S.C.A. according to internal sources is currently taking a close look at all expenses. Therefore the new financial management around the recently appointed Chief Financial Officer Jeffrey Speed is ordering all departments do deliver complete sets of data including detailed overviews of all(!) expenses directly to the central management to help the search for further opportunities for cost reduction. Any rumoured announcement for future expansion in September will therefore not only depend on the results of the talk with the Walt Disney Company and lender banks but also the results of this internal process.

Even so Fans couldn't wait for the premiere of Disney's Fantillusion and greeted it with unbelievable enthusiasm (even so complaining about a lack of merchandise) it now seems Fantillusion was too little too late to save this year's summer attendance at the Resort adding even more to the bulk of work that awaited the new CEO André Lacroix. According to numerous sources who talked to DLP.info insisting on staying anonymous the total attendance of both parks and the hotels added up is (depending on the source) 20% to 30% below expectations. Reports of guests who were able to reserve rooms for all Disney Hotels but Disney's Santa Fe and Disney's Hotel Cheyenne on short notice during July and then encounter queue lines inside the Disneyland Park to be noticeable shorter than during weekends in the spring time seem to confirm this news. With André Lacroix only starting in his job on the 1st of July (which also meant that he did miss the press and VIP premiere of Fantillusion) so far only short term cosmetics have found their way down to the guests, some like the extra free nights and extra park hopper days for the prolongation day for arrivals on Thursday and Sundays in July and August already put in place in late spring. The latest special offers trying to bolster the attendance include the return of the Starnight Ticket for the Disneyland Park valid as of 6.00 pm (except Saturdays and Sundays) and the introduction of a 2-day-Park-Hopper-passport available online for UK-residents but according to guest reports also at the ticket booths replacing the limited offer of a 1-day-Park-Hopper-passport earlier this year. Also new is the return of the 2 days / 1 night classic package for the seven Disney Hotels under the new name "Découverte", since it had been taken out of the offerings with the grand opening of the Walt Disney Studios to further emphasize the fact that two days are not enought to see both parks.
On the long therm internal sources point out that the resort is dreading a really slow September which may also - according to some sources - may be the month a decision about the next major attraction to be added to the theme parks is made official at least internally to CMs and their representatives. But then THIS is not confirmed yet.

Al Lutz published an internal memo from Walt Disney Imagineering in his latest column on MiceAge revealing that John Lund would leave EuroDisney S.C.A. in the coming months to become "Vice President, Process Improvement and Sustainability" at WDI, a position newly created for him. According to this memo John Lund was most recently serving as Vice President, Chief of Staff at the Disneyland Resort Paris after joining EuroDisney S.C.A. already in 1992 and among other positions most notably being the Director, Operational Labor Management. He is credited in the memo with improving the productivity, manage critical corporate issues by assisting Jay Rasulo and guiding "critical technology projects", with the resorts website being used as outstanding example. Needs to be seen wether this is an exceptional occurrence or wether we will witness more members of Jay Rasulo's management following him to toward the USA.

Hopes were high for the Annual General Meeting of EuroDisney S.C.A. shareholders on Monday the 6th of May - even so the results of the first half of the fiscal year ending 31st of March, which is historically the weaker part of the year, were disappointing with an revenue increase of only 8% and therefore below expectations (blamed on a general slow-down in tourism due to the world economy and security concerns), a decreased operational margin (due to increased marketing in anticipation of the summer season) and especially increased lease and credit payments which then resulted in an increased loss compared to the first half of the fiscal year 2002.
But still numerous shareholders and fans came to the AGM expecting the announcement of a new attraction or attractions, especially for the Walt Disney Studios which continue to disappoint with far lower than expected guest numbers which EuroDisney S.C.A. claims will turn around once the increased hotel capacity is available. Recent weeks had seen a strengthening of rumours that the Tower of Terror would be announced during the AGM for the Walt Disney Studios (as depicted above and below in a photomontage by DLP.info and Clickmagique) ... unfortunately no new attraction was announced at the AGM at all, even so behind the scenes the management did point out repeatedly that several new attractions are under preparation in early stages for both parks - but no decision has been made so far. According to these sources an announcement could be expected in late fall or early winter if the summer season exceeds current expectations and turns the company around. Still at least two announcements were actually made both regarding the Disney Village: guests can expect the opening of the IMAX in June or July 2004. In a second construction project a new parking structure will be added soon too.
On the business side the company had to answer questions by shareholders asking for a dividend, which was turned down as the company wants to concentrate on paying off its 2 billion Euro debt. To do this it is planning to concentrate on improving productivity for which according to president Yann Caillere a new system for the allocation of revenues has been put in place which strongly favors productivity improvements. This translates to fans as a further cut-back of all non essential budgets, which unfortunately seem to include development of attractions. Also according to Reuters the company has hinted that it is interested in selling non-strategic assets before the end of the next fiscal year – to reduce costs and generate a short-term income - but no details have been given so far.
President Yann Caillere declined detailed comment on an article by the French daily Les Echos that EuroDisney S.C.A. was entering into a partnership with Pierre & Vacances for construction and operation of a holiday-complex including a water park on 562 hectares next to the Disney theme parks. All he said was that a partnership has been established and will be announced with further details on the 19th of May as the project is currently in a phase of preliminary studies which will be followed by further studies of feasibility.
The second year in a row the shareholders were upset before the opening of the AGM already due to a short term rescheduling of the AGM – but it also prevented many outspoken fans from visiting the AGM and voicing their concerns regarding the failing policy of the current and past management team resulting in a surprisingly friendly atmosphere and a near total lack of any critical questions from the shareholders. Still the results of the AGM must be labelled as disappointing as the management still seems to lack a coherent strategy or at least is unwilling to reveal it to its shareholders while it continues to miss the need for an expansion of the theme parks in the wake of increased competition through numerous theme and amusement parks all over Europe adding attractions nearly on a yearly basis. Even the screening of some impressive footage of the new night time parade Disney’s Fantillusion couldn’t paper over these problems during the AGM - at least for the fans who attended the event.

EuroDisney S.C.A. has finally set the new date for the Annual General Meeting of Shareholders - it will take place on the 5th of May at 2pm at the Convention Center of Disney's Newport Bay Club. Which means the company is breaking with the tradition of holding the AGM in the early morning to allow attending shareholders to visit the theme parks after the conclusion of the meeting. So far most shareholders still have to receive an official invitation but the new date can be found on the company's website which also includes the updated resolutions. These are identical with the resolutions proposed for the original date (26th of March) with the exception that a new resolution number 7 has been added to appoint Jay Rasulo who resigns as CEO, Chariman and member of the Board of Directors with the closure of the AGM for three years as a member of the Supervisory Board of the company. Interestingly there is no resoultion which would allow the shareholders to vote upon the newly nominated CEO and president André Lacroix.
Photo Copyright: Burger King

EuroDisney S.C.A. has confirmed earlier reports by several French media-outlets in an official press-release on Friday the 28th that André Lacroix will be nominated as the companies chosen candidate to be come Jay Rasulo's successor as CEO and president of EuroDisney S.C.A. The nomination was announced by Jay Rasulo who also pointed out that André Lacroix will be presented to the shareholders at the annual meeting during which they will have to vote upon him. The statement also included the new information that the annual meeting is now planned to take place in early May.
The last position of the 43 years old French native André Lacroix, who speaks French, Spanish, Dutch, German and English fluent, is curently living as a single in Munich and graduated from Ecole de Commerce de Paris, was with Burger King International as its president since 2001 where he was responsible for the brand's management and expansion outside North America. He joined Burger King originally in 1996 as General Manager for Germany where he was able to initiate a turn-around of the local franchises who had been constantely loosing ground against McDonald's. This led to his promotion to president for Europe, Middle East, Africa and Asia-Pacific in 1999. A function in which he moved the brand into several new markets including Italy. Prior to this he was with Pepsi Cola Internation as of 1988 where he held the positions of an International Marketing Manager, Marketing Director, Operations Director and General Manager for various regions and brands.
The same press release also informed the public that Yann Caillère has been appointed as president and Chief Operating Officer of EuroDisney S.C.A., who is working for the company since 1995 and was responsible for streamlining operations in all sectors as Senior Vice President of Operations in the recent past.
Photo Copyright: Burger King