Euro Disney S.C.A. Annual General Meeting - February 11, 2009 Speech of Philippe Gas, Chief Executive Officer of Euro Disney S.A.S.
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1 Euro Disney S.C.A. Annual General Meeting - February 11, 2009 Speech of Philippe Gas, Chief Executive Officer of Euro Disney S.A.S. Dear Shareholders, good morning and welcome. I am happy to welcome you here today to the CineMagique theater. I wanted to hold this year s meeting at the Walt Disney Studios Park so that you can see for yourselves the concrete results of the investment plan that we have implemented these past few years, thanks to your support. Together, we have achieved a real transformation here: The addition of a new land, Toon Studio, with Cars Race Rally and Crush s Coaster 1. The arrival of little Stitch, and with him a new kind of interactive attraction that showcases the best of Disney s savoir-faire. Finally, The Twilight Zone Tower of Terror 2 and the incredible sets and sense of place around this already iconic attraction. The Studios have really taken on a new dimension. Due to these new attractions, the ambiance of the Park has been completely transformed. You only need to see the scores of children every morning at park opening to understand the strength of Disney dreams. They come from all corners of Europe to live the Disney experience. This uniqueness is due to our creativity and our ability to maintain a long-term vision which is a major asset that will bring our company towards a well-earned and sustainable growth. Now, beyond providing you a virtual tour of the Studios, this Shareholder Meeting is an opportunity to present the major achievements that have marked 2008 and to talk about the upcoming year. But, first, I would like to share with you what I think is a major strength of our company: this strong emotional connection, a universal connection, that everyone has with the Disney brand. It is a connection: With our Guests, who visit us each day With our Cast Members, whose professionalism and passion remain exceptional And also with you, our shareholders, the majority of whom have given your support since the beginning. These strong connections, that s our «Disney Difference.» 1 Respectively inspired by Disney/Pixar s Cars and Finding Nemo. 2 Inspired by The Twilight Zone, a registered trademark of CBS, Inc. All Rights Reserved. Speech of Philippe Gas 1/6
2 Perhaps you already know, but I had the privilege of welcoming our 200 millionth visitor this summer. Today, when we think tourist destination in France, we think of Paris, the Eiffel Tower, the Loire castles, but we also immediately think of Disneyland Resort Paris. It is the quality of our service, coupled with the strength of the Disney brand, that makes us a destination that is deeply-rooted in the European tourism landscape and, as you know, the #1 tourist destination in Europe. Now, in terms of performance, 2008 was an important milestone. We have achieved record revenue driven by record attendance, record spending per visitor and, finally, record hotel occupancy. All this in a difficult economic context which, as you are all aware, affects all industries is our third consecutive year of growth, with an additional 3 million visits in three years. In other words, for three years, we have constantly improved our penetration rates in different European market segments and constantly increased our attendance as well as revenue. We have capitalized on new trends in leisure and tourism, in terms of shorter break vacations. This is why we opened a second park in 2002: so that Disneyland would become, for Europeans, the place to spend several days with the family, with activities for everyone. This strategy has paid off again this year. Even in the difficult economic environment that 2009 will represent, we will capitalize on the solid results that we have achieved while focusing on the following objectives: -- Investment in new attractions and high-quality entertainment -- Targeted marketing and offers -- Optimization of service quality and the experience provided by our Cast Members. As for investments, in 2008 we remained focused on our development strategy, which has allowed the opening of five new major attractions in two years. The Twilight Zone Tower of Terror 3 and Stitch Live! are the most recent of these promises to be another exciting year with new attractions and entertainment. In April, we are launching Mickey s Magical Party, a theme that will come to life with yearlong festivities in both parks: - With two new shows in the Disneyland Park: It s Dance Time in Discoveryland with D.J. Stitch and his explosive music mix and It s Party Time with Mickey and Friends onstage in a completely transformed Central Plaza. 3 Inspired by The Twilight Zone, a registered trademark of CBS, Inc. All Rights Reserved. Speech of Philippe Gas 2/6
3 - A new show in the Walt Disney Studios Park: Disney s Stars n Cars, a four-to-the-floor motorcade of glamorous Disney stars: a moment of motorized festivity, Disney style! - Finally, our youngest fans will get their chance to enjoy seeing their favorite Disney Channel friends bring the giant storybook stage to life and prepare the best birthday party ever in the new attraction Playhouse Disney Live on Stage! Later, we will share with you a video of all upcoming events for These new attractions demonstrate Disney s creativity and innovation: plunging Guests into dream worlds today and envisioning the entertainment of tomorrow. They can count on us to continue to exceed their expectations. In terms of marketing and sales, our investment in high quality Guest experience is supported by targeted strategies that are pertinent to each of our market segments. We have therefore continued to adapt our package offers and consumer communications tailored to each market segment, while particularly focusing on any existing barriers to visitation. During the holidays, while consumers were increasingly watchful of spending, the pro-activity of our marketing and sales network was impressive. We proposed attractive offers, such as the 109 package offer for adults. And in the first quarter of fiscal year 2009, we achieved a solid performance while addressing consumers constrained purchasing power. All our new attractions and entertainment for 2009 will be supported by targeted sales offers such as the Kids under 7 Stay AND Travel for Free offer, which will be launched starting in April for Mickey s Magical Party. Of course, we are not immune to a sustained economic downturn. I believe that no one is at this time. But we will continue to focus on strategies that have proven effective in the past few years, strategies that are, more than ever, relevant today. We are confident in the potential of our tourist destination, in part, because of the mid-term opportunities available in the European tourism market, but also because of our tremendous assets. Before returning to this potential, our Chief Financial Officer, Ignace Lahoud, will present the detailed results of 2008, as well as the first trimester. Ignace Speech of Philippe Gas 3/6
4 As Ignace has emphasized, we must continue our efforts toward achieving our growth objectives and working on investor confidence in our Company s potential. So, what is this potential when we are already the number one tourist destination in Europe? We will leverage our strengths to drive long-term growth. Our main asset is the strength of the Disney brand. Going to Disneyland, is an experience like no other. Above all, we are storytellers of tales that cross borders and generations. We all have our own favorite Disney story to cherish and share. Who could reinvent Notre Dame de Paris? Disney, of course! How many of us carry around in our wallets a time-worn photo of our starry-eyed children, taken the day they first went to Disneyland? A proud grandfather recently told me: Only Disney can do that! What child isn t familiar with Zack and Gabriella? Well, we have brought High School Musical to the Studios! Disney Channel s Playhouse Disney is a hit with small children? It comes to our Resort live in April! That s what makes Disneyland so unique: it s the place that makes all these stories come alive through attractions and entertainment. Interacting with Disney characters has always been one of the reasons if not THE reason Europeans come to visit us. The great classic characters and Disney Princesses join forces with today s heros: Ratatouille, Jack Sparrow, and so many others we are the short-break destination in Europe where the magic of Disney comes to life and where life-long memories are created. Europe will be the engine of our growth in the years ahead. A few numbers illustrate this fact: our market share, as measured as a percentage of attendance at the 50 largest European theme parks, is increasing. It has progressed from 14.1% in 2000 to 16.8% in The European leisure and tourism market is worth 300 billion and comprises 500 million tourists per year. This represents for us significant long-term growth potential. Our Guests come from all over Europe and this diverse portfolio of countries is a strength we can leverage. But let s look farther out, beyond Europe. We have begun to examine emerging markets: Eastern Europe, Russia, the Middle East, where the affinity to the Disney brand is showing strong growth. And even if it will be a few years before we capture the full potential of these new markets, we have already begun to integrate ourselves into the leisure tourism market place in several of these countries. Speech of Philippe Gas 4/6
5 One challenge remains: how to better respond to new consumer expectations. - Our Guests want more customization? We give them more flexibility with Tailor Made Dreams, a program that allows Guests to customize their trip reservations. - Our Guests face constraints on purchasing power? We have offers that allow them to better manage their vacation budget in advance. - Our Guests want us to be closer to them? We are where they buy, whether it be in a large supermarket chain like Carrefour in Paris in a travel agency network like Thomas Cook in London or over the Internet. We continue to invest in improving the experience of purchasing Disneyland packages, whether it be over the Internet or in our Reservation Call Center. We apply our creativity to optimize the Resort experience for each of our Guests down to the smallest details. We continue to innovate and perfect our operational strategies to offer a high-quality experience, while adapting to our Guests. For example, we know that the number of attractions a Guest visits in one day significantly affects satisfaction rates. Perhaps you are already familiar with Extra Magic Hours and Fast Passes, but less familiar with information systems in the parks that allow Guests to manage their parks visit, in real time. We will continue to work on these visitor information systems, fully leveraging new technology. This said, our success is largely due to the high quality service that we offer to our Guests. In nearly every Guest story of an unforgettable visit is an encounter with an exceptional Cast Member. This service quality comes from a tradition of excellence inherited from Walt Disney and from the ongoing commitment of our Cast Members to give the best of themselves. To achieve this high level of quality, we provide our Cast Members the opportunity to train and obtain a diploma that is recognized by the profession. Training here is a way to get a foot in the door of the tourism industry. We are even asked to share our expertise, such as in Destination France 2020, a recent government initiative exploring ways to promote tourism in France. Our savoir-faire is recognized all over the world, because Disney Service is simply like no other: it is based on the joy of creating magical memories. I see it every day, and I am sure you see it too when you visit our Resort. There are hundreds of examples: there is the attentive Cast Member who remembers children s names at the Auberge de Cendrillon Restaurant, surprising the children by calling them «Prince Mathieu» or «Princesse Magalie,» not to mention melting their parents hearts in the process. There is also the Cast Member who kneels down to tell a child that Mickey is coming. Speech of Philippe Gas 5/6
6 Again this year, satisfaction rates attest to our commitment : more than 7 out of 10 visitors say they are «very» or «totally» satisfied by their visit in the Resort and 94% intend to recommend the Resort to others. This is truly proof of the savoir-faire of our teams. Creativity and innovation are simply the foundation of everything we do and the creativity of our teams at Disneyland Resort Paris is simply never-ending. That is why I am confident in our potential for long-term growth. We will continue to explore ways to develop our tourist destination, by studying projects: - To develop our Parks by continuing to invest in attractions and entertainment, - To increase the hotel capacity of the Resort, - To continue to diversify the Resort responsibly: with convention facilities for business tourism; with further enhanced experiences in Disney Village; or with projects, such as Villages Nature and ecotourism, which leverage new trends in European tourism. In 2012, Disneyland Resort Paris will celebrate its 20th anniversary. We are already working on new ideas that will reinforce our attractiveness as the number one European tourist destination. Our company has now reached a maturity that allows us to know our strengths and the strategies that work, as well as to be a reference in entertainment for European families. In conclusion, we have taken our place as a major actor in the European tourism landscape, and this success commits us to going further. In order to create value for you, our Shareholders, we need to look beyond the economic crisis and, above all, continue to work on tomorrow s growth. The entire company and its Cast Members are united behind this objective: to continue to develop the tourist destination, increase our revenue, and ensure profitability over the long term. You understand as well as I: together, we can begin to imagine the future for Disneyland Resort Paris. I thank you for your support. Speech of Philippe Gas 6/6
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