EuroBusiness Media (EBM): Euro Disney, the number one tourist destination in Europe, reports first half results for 2013. Mark Stead, welcome, you are the Chief Financial Officer of Euro Disney. To begin, what are your comments on these first half results?
Mark Stead: In think what you see in our first half results is definitely the result of our long term strategy, which is continuing to invest in the guest experience and improving what we’re doing at Euro Disney. A couple of numbers to illustrate that: Revenues for the first half are up 3% compared to the prior year period in what is obviously a difficult economic environment; guest spending in our parks is up 2 euros versus the prior year. That’s getting to an all-time record and you’re definitely seeing the results of this increase of revenues coming down to our bottom line. Our EBITDA for the first half is almost double, at just over €3 million. So I’d say we are moving forward in a difficult economic context. These are good results and very encouraging for the future.
EBM: Do you feel the impact of the continued crisis in Europe?
Mark Stead: Yes, of course. I think us, like many other companies in the leisure industry, are feeling the impact of the crisis. People are closer to their money. People are looking for a good experience. And that’s exactly what we’ve been trying to do. Since 2010, we’ve moved our strategy more from encouraging a lot of people to come to the Park, and more and more people, to focusing a little bit more on the guest experience. So what are you getting for your money? And I think you’re really seeing that at the moment. Guests are spending more in the park. They are spending more in the hotels as well. If I can give you just one example that I think for me best illustrates this movement in this economic crisis, it’s the renovation of one of our big hotels, the Disney’s Sequoia Lodge. It’s a hotel that has a thousand rooms. If you look at pre-renovation to post-renovation, we’re improving spending in our hotel by 22%. At the same time guest satisfaction has increased 11% and the value-for-money perception that our guests see in this hotel has remained stable. That’s a great return on investment in a difficult economic environment.
EBM: What does the recent refinancing of your debt do for you?
Mark Stead: I think a lot of things. Firstly, what we are seeing with the refinancing is a decrease in our average rate of our debt by about 1%. This has several consequences. The first consequence is obviously a reduction in our interest charges this year. We are expecting about €13 million of reduced financial charges this year. And as well, over the next five years, you’re going to see about €45 million of savings of interest charges. That’s the first point. The second point is that through the refinancing we were able to negotiate a better repayment schedule for our debt. So we’re saving about €225 million of debt repayments over the next five years, which is going to give us a greater access to liquidity to continue to invest in our Resort.
EBM: What are your key priorities and your outlook for the years to come?
Mark Stead: I think our key priorities and outlook are definitely to continue doing what we’re doing. I think we’re delivering results. Investing in the guest experience and in our product is driving better financial results, and I think it’s the right way to go over the long term. I think what we’re going to see coming up in the next few months is again a continuation of improving guest spending, improved guest satisfaction. We are looking to open a new attraction next year, which I think is going to be a great addition to our Walt Disney Studios Park. And again, we’re finishing this year the renovation of our second largest hotel, the Disney’s Santa Fe, and we’re going to be starting in the second half of the year the renovation of the Disney’s Newport Bay Club, which is one of our biggest hotels on the site. So we’re definitely continuing down the road of improving the guest experience, improving guest spend, and on that road to long term profitability.
EBM: Mark Stead, CFO of Euro Disney, thank you very much.
Mark Stead: Thank you.
