Regulatory News:
Pierre & Vacances-Center Parcs Group (Paris:VAC):
This press release presents consolidated financial results
established under IFRS accounting rules, currently being audited,
and closed by the Pierre et Vacances SA Board of Administration on
25 November 2019.
- Revenue1 from the tourism businesses up 7.2%,
- Robust growth in current operating profit1 to €30.9 million
(vs. €9.8 million in the previous year)
- Positive pre-tax earnings
- Net debt down and a high level of liquidity
maintained
- Strategic reflection underway to intensify and accelerate
the roll-out of the Group’s transformation plan
I. Highlights of 2018/2019
Governance
Since 2 September 2019, Yann Caillère, who boasts 40 years of
expertise at the very senior level of leading companies in the
tourism industry, has been CEO of the Pierre & Vacances-Center
Parcs Group. He has taken over from Olivier Brémond who has been
nominated Executive CEO of SITI, the top holding company of the
Pierre & Vacances-Center Parcs Group.
Strategic agreements in China
On 21 December 2018, S.I.T.I2 acquired the entire holding owned
by HNA Tourism Group in Pierre et Vacances S.A., or 10.00% of the
capital and 13.50% of the Company’s net voting rights3. This
acquisition put an end to all of the capital and commercial ties
linking HNA Tourism and Pierre & Vacances-Center Parcs.
In August 2019, Pierre & Vacances-Center Parcs signed
partnership agreements with two public groups that are leaders in
their sectors: an investment bank and a public works and
construction company, that subscribed to 44% and 12% respectively
of the Chinese joint venture supporting the Pierre &
Vacances-Center Parcs activities in China, with the Group owning
44%.
So far, the joint venture has signed contracts for 14 projects
inspired by the Center Parcs and Pierre & Vacances concepts,
for works management assistance and tourism management.
Opening of Center Parcs Allgau
After an opening period affected by a spate of bad weather, the
domain, in operation since October 2018, enjoyed a huge commercial
success over the year, with an occupancy rate of 90% in the fourth
quarter.
Acquisitions operations
On 16 January 2019, the Group announced the acquisition of the
business capital of French start-up RendezvousCheznous.com, a
marketplace launched in 2014 that connects holidaymakers with local
hosts for authentic experiences. This acquisition fits with the
strategy of the Pierre & Vacances brand to round out its offer
by proposing customers immersive and experiential holidays.
II. FY 2018/2019 revenue and results4 (1 October 2018
to 30 September 2019)
2.1. Revenue
As of 1 October 2018, the Group applies the new revenue
recognition standard “IFRS 15 - Revenue from Contracts with
Customers”. The result of applying this standard is a sharp
increase in 2018/2019 revenue, driven primarily by the signing of
renovation/disposal operations at Center Parcs, for which the Group
is considered as a “principle” under the terms of IFRS 15 (for
further details, see the appendix at the end of the press
release).
€ millions
2018/2019
according to operating
reporting
2017/2018
Pro-forma IFRS 15
according to operating
reporting
Change
Change excl. supply effects*
2017/2018 Reported (Before
IFRS15) according to operating reporting
Tourism
1,365.1
1,273.1
+7.2%
1,356.4
Pierre & Vacances Tourisme Europe
596.8
580.9
+2.7%
659.7
Center Parcs Europe**
768.2
692.2
+11.0%
696.8
o/w accommodation revenue
923.6
858.4
+7.6%
+4.5%
858.4
Pierre et Vacances Tourisme Europe
406.9
400.1
+1.7%
+3.6%
400.1
Center Parcs Europe**
516.6
458.2
+12.7%
+5.2%
458.2
Property development
307.7
196.6
+56.6%
166.5
Full-year total
1,672.8
1,469.6
+13.8%
1,523.0
* Adjusted for the impact of: - at PVTE, the net reduction in
the network operated (withdrawals from loss-making sites and the
non-renewal of leases), - at CPE, net growth in the network
operated prompted mainly by the opening of the Center Parcs Allgau
in October 2018. ** including Villages Nature Paris (revenue of
€29.1m in FY 2018/2019, of which €23.0m in accommodation
revenue).
- Revenue from the tourism activities rose 7.2% to €1,365.1
million compared with the previous year. - Accommodation
revenue rose +7.6%, driven by both net average letting rates
(+5.1%) and the number of nights sold (+2.4%). Occupancy rates
totalled 75% over the full year (vs. 73.6% over 2017/2018). On a
same-structure basis revenue rose 4.5%, ahead of the full-year
target of +4% set by the Ambition 2022 strategic plan. This growth
was driven by all destinations: +5.2% at Center Parcs Europe (+3.7%
for the Center Parcs domains and +45.7% for Villages Nature Paris),
+4.7% for the Adagio residences, +4.7% for the mountain resorts and
+ 2.2% for coastal resorts (mainland France, French West Indies and
Spain). - Supplementary income grew by 6.5%, with a rise of
7.5% for Center Parcs Europe and 5.1% for & Pierre &
Vacances Tourisme Europe.
- Revenue from property development totalled €307.7
million, compared with €196.6 million in 2017/2018, This was
driven primarily by the contribution from renovation operations at
Center Parcs domains (€158.1 million), and the Seniorales
residences (€76.5million). Property reservations recorded
over the year represent revenue of €688.3 million 5, ahead of the
level noted in the year-earlier period (€364.4 million).
2.2. Net profit (loss)
€ millions
2018/19
2017/18 proforma
Change
Revenue
1,672.8
1,469.6
*
203.2
EBIT
30.9
9.8
**
21.0
Tourism
29.6
20.1
9.5
Tourism - Villages Nature
Paris
-5.5
-11.6
6.1
Tourism excl. Villages Nature
Paris
35.1
31.7
3.4
Property development
1.3
-10.2
11.5
o/w Allgau surcharges
-13.7
-13.7
Other operating income and
expenses
-9.7
-4.7
-5.0
o/w costs related to the
reorganisation plan
-4.1
-1.3
-2.8
Financial expenses
-20.8
-19.2
**
-1.6
Share of profit (loss) of
equity-accounted investments
0.9
1.6
-0.6
PROFIT (LOSS) BEFORE TAX
1.3
-12.5
13.8
Tax
-34.4
-33.6
-0.8
o/w reversal of deferred tax
assets
-18.8
-19.0
0.2
NET PROFIT (LOSS) FOR THE
YEAR
-33.0
-46.0
**
13.0
Group share
-33.0
-46.0
13.0
Non-controlling interests
0.0
0.0
0.0
One-off items (Allgau
surcharges, reorganisation, reversal of DTA ).
-36.6
-20.3
-16.3
NET PROFIT (LOSS) BEFORE ONE-OFF
ITEMS
3.6
-25.7
29.3
* FY 2018 pro-forma IFRS 15
revenue
** This data is adjusted for the
impact of the interpretation of IAS23 published in December
2018.
> Current operating profit totalled
€30.9 million, up sharply relative to the level in the previous
year (€9.8 million)
- Current operating profit from the tourism businesses
came in at €29.6 million, an increase of 47% relative to
2017/2018. - Current operating profit excluding Villages Nature
Paris, totalled €35.1 million up 11%. It included growth in
revenue (+€13 million) and the first savings generated under the
framework of the Ambition 2022 plan (+€5 million). These gains more
than made up for inflation in costs (primarily wages, rents and
energy), estimated at €10 million, as well as the impact of
temporary closures at Center Parcs domains currently being
renovated (-€5 million). Adjusted for this temporary impact,
current operating profit totalled €40 million, up 25% relative to
the year-earlier period (€32 million). - The current operating
loss at Villages Nature Paris was reduced by half (-€5.5 million
vs. -€11.6 million in 2017/18). The domain showed an average
occupancy rate of 74% over the year (vs. 66% in 2017/18) and a net
average letting rate up more than 7%.
- The current operating profit in property development
stood at €1.3 million, vs. -€10.2 million in 2017/18. This
growth was primarily driven by: - The contribution from the
disposal-renovation programmes for Center Parcs in Belgium and the
Netherlands (+€26 million), - partly offset by additional costs for
the Allgau domain (-€14 million) following a spate of bad weather
as well as technical problems in starting operations at the domain
concerning the heat network and deployment of the fibre
optics.
> Other operating income and
expense include both site withdrawal costs, but also costs
related to the Group’s reorganisation (-€4.1 million) explaining
the majority of changes in this line item.
> Net financial expenses totalled
€20.8 million, an increase relative to 2017/2018 due in particular
to the annualisation of interest expenses on a Euro PP issued in
February 2018.
>> Over
2018/2019, the Group generated a pre-tax net profit of €1.3
million.
> Deferred taxes primarily concern
the reversal of tax receivables in France, with the increasing
international expansion of the Group’s business reducing the
capacity to use domestic deficits over the medium term (indeed the
Group has set a five year time-frame, even though tax deficits can
be carried over indefinitely).
>> The Group’s net loss narrowed to
€33.0 million vs. -€46 million in 2017/2018, or a 28% improvement.
Adjusted for exceptional items (Allgau surcharges,
reorganisation costs and adjustment for tax receivables), the
2018/2018 financial year would have delivered a net profit (€3.6
million).
2.3. Balance sheet items and net financial debt
Simplified balance sheet
(€ millions)
30/09/2019
30/09/2018*
Change
Goodwill
158.9
158.9
0.0
Net fixed assets
475.4
461.0
14.4
Total uses
634.3
619.9
14.4
Share capital
251.4
285.8
-34.4
Provisions for risks and
charges
76.2
56.6
19.6
Net financial debt
228.6
247.7
-19.1
WCR and others
78.1
29.8
48.3
Total resources
634.3
619.9
14.4
* This data is adjusted for the impact of the interpretation of
IAS23 published in December 2018.
Net financial debt
(€ millions)
30/09/2019
30/09/2018
Change
Gross debt
342.1
354.9
-12.8
Cash (net of overdrafts/drawn
revolving credit lines)
-113.5
-107.3
-6.3
Net financial debt
228.6
247.7
- 19.1
o/w net bank/bond debt
132.2
148.8
- 16.6
o/w rental commitments -
facilities at Ailette
96.4
98.9
- 2.5
Net financial debt on 30 September 2019 (€228.6
million), down €19.1 million relative to the previous year,
corresponded primarily to:
- the ORNANE bond issued in December 2017 for a nominal amount
of €100 million; - Euro PP bond loans issued respectively in July
2016 for a nominal amount of €60 million and in February 2018 for a
nominal amount of €76 million; - After deducting an amount of cash,
net of overdrafts/drawn revolving credit lines, of €113.5
million.
In addition to this debt of €132.2 million comes the amount of
financial debt related to the adjustment of financial leasing
contracts for €97.9 million, of which €96.4 million concerns the
central facilities of the Center Parcs domain at Lac d’Ailette.
On 30 September 2019, note that the Group had a revolving credit
line of €200 million contracted on 14 March 2016 (maturing in
2021), as well as four confirmed credit lines for a total amount of
€34 million.
On 30 September 2019, none of these lines had been used,
reflecting the high level of liquidity maintained.
III. Outlook
In view of the portfolio of reservations to date, the Group
expects growth in the tourism businesses in Q1 2019/2020.
Over 2018/2019, performances by the tourism businesses were in
line with Ambition 2022 targets. Programmes to renovate and upgrade
the tourism networks of the various brands are going ahead
according to the provisional schedule, and the first savings have
been generated (€5 million).
In order to step up the momentum seen in 2018/2019, strategic
reflection is underway to intensify and accelerate the roll-out of
the Group Transformation Plan targeting lasting profitability.
The strategic action plan is to be finalised in early 2020.
Appendix: Reconciliation table - IFRS income
statement
(€ millions)
FY 2019 operating
reporting
IFRS 11 adjustments
FY 2019
IFRS
Revenue
1,672.8
- 77.8
1,595.0
Current operating profit
30.9
-0.6
30.2
Other operating income and expense
- 9.7
+0.1
- 9.6
Financial items
- 20.8
+2.3
- 18.5
Equity associates
0.9
- 3.5
- 2.5
Income tax
- 34.4
+1.7
- 32.7
PROFIT (LOSS) FOR THE YEAR
- 33.0
0.0
- 33.0
(€ millions)
FY 2018 published operating
reporting
Adj.
IFRS 15
Adj.
IAS 23
FY 2018 proforma operating
reporting
Adj.
IFRS 15
Adj. IFRS 11
FY 2018
Proforma IFRS
Revenue
1,523.0
- 53.4
1,469.6
+53.4
-88.3
1,434.7
Current operating profit
9.1
+0.8
9.8
+7.8
17.7
Other operating income and expense
- 4.7
- 4.7
- 4.7
Financial items
- 18.3
-0.9
- 19.2
+2.2
- 17.0
Equity associates
1.6
1.6
-16.4
- 14.8
Income tax
-33.6
-33.6
+6.4
-27.2
PROFIT (LOSS) FOR THE YEAR
- 45.9
0.0
-0.1
- 46.0
0.0
0.0
- 46.0
For its operating reporting, the
Group continues to integrate joint operations under the
proportional integration method, considering that this presentation
is a better reflection of its performance. In contrast, joint
ventures are consolidated under equity associates in the
consolidated IFRS accounts.
As of 1 October 2018, the Group
applies the new revenue recognition standard “IFRS 15 - Revenue
from Contracts with Customers”. The main impacts on revenue are the
following:
- Tourism: in terms of its tourism
marketing mandates and various outsourcing contracts (catering,
events, ski lifts etc.), the Group acts mostly as an “agent” in the
wording of IFRS 15 and only its net remuneration must be recognised
in revenue.
Application of IFRS 15 therefore leads to a
decline in tourism revenue, which so far recorded the volume of
business generated by these activities, with no impact on the
Group’s net profit (loss) for the year.
- Property development: sales
operations on behalf of third parties are analysed on a case by
case basis in order to establish whether the Group acts as an
“agent” or a “principal”.
The outcome of this analysis is a sharp
increase in revenue over the full-year 2018/2019, driven primarily
by the signing of renovation/disposal operations at Center Parcs
during the first half, for which the Group is considered as a
“principle” under the terms of IFRS 15.
Following a decision by the IFRS
Interpretation Committee published in December 2018 and concerning
the IAS 23 rule, the Group no longer capitalises loan costs on its
property operations. Since this decision was applied retroactively,
the comparison period of 2017/2018 has been adjusted as indicated
in the above table.
1 The revenue and earnings items commented on this press release
stem from operating reporting, with the presentation of joint
ventures under proportional consolidation 2 Limited stock company
controlled by SITI “R”, itself controlled by Mr Gérard Brémond,
Chairman of the Pierre et Vacances S.A. Board of Directors. 3 Based
on 9,804,565 shares and 14,516,853 net voting rights in circulation
on 30 November 2018. 4 IFRS 11 "Joint Arrangements” implies the
consolidation of joint operations by the equity method and no
longer by proportional integration (Adagio and Villages Nature
partnerships primarily). For its operating reporting, the Group
continues to integrate joint operations under the proportional
integration method, considering that this presentation is a better
reflection of its performance. The income statement items and
commercial indicators commented on hereafter stem from operating
reporting. The reconciliation tables with IFRS income statements
are set out in appendix. 5 Including block reservations at Les
Senioriales, not included in reservation revenue mentioned in the
press release on full-year revenue of 15 October 2019.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191126005679/en/
Investor Relations and Strategic Operations Emeline Lauté
+33 (0) 1 58 21 54 76 info.fin@groupepvcp.com
Press Relations Valérie Lauthier +33 (0) 1 58 21 54 61
valerie.lauthier@groupepvcp.com
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