case fourteen

Euro Disney: From Dream to Nightmare, 1987–94
Robert M. Grant
At the press conference announcing Euro Disneyland SCA’s financial results for the year ended September 30, 1994, CEO Philippe Bourguignon summed up the year in succinct terms: “The best thing about 1994 is that it’s over.” In fact, the results for the year were better than many of Euro Disneyland’s long-suffering shareholders had predicted. Although revenues were down 15 percent – the result of falling visitor numbers caused by widespread expectations that the park would be closed down – costs had been cut by 12 percent, resulting in a similar operating profit to that of the previous year. The bottom line still showed a substantial loss (net after-tax loss was FF 1.8bn); however, this was a big improvement on the previous year (FF 5.33bn loss). Tables 13.1 and 13.2 show details of the financial performance. Regarding the future, Bourguignon was decidedly upbeat. Following the FF 13bn restructuring agreed with creditor banks in June, Euro Disney was now on a much firmer financial footing. As a result of the restructuring, Euro Disneyland S.C.A was left with equity of about FF 5.5bn and total borrowings of FF 15.9bn – down by a quarter from the previous year. With the threat of closure lifted, Euro Disney was now in a much better position to attract visitors and corporate partners. Efforts to boost attendance figures included a new advertising campaign, a new FF 600m attraction (Space Mountain) which was due to open in June 1996, and changing the park’s name from Euro Disneyland to Disneyland Paris. In addition, Euro Disney had made large numbers of operational improvements. Mr Bourguignon reported that it had cut queuing times by 45 percent during the year through new attractions and the redesign of existing ones; hotel occupancy rates had risen from 55 percent in the previous year to 60 percent; and managers were to be given greater incentives. The net result, claimed Bourguignon, was

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