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Compagnie des Alpes and Grévin & Cie A Leisure Group unique in Europe

Compagnie des Alpes and Grévin & Cie A Leisure Group unique in Europe. May 27, 2002. CDA + Grévin & Cie. 1. Compagnie des Alpes 2. Grévin & Cie 3. The project 4. Strategic interest 5. The takeover bid 6. Conclusions . 1. Compagnie des Alpes. OPERATION PROPOSEE.

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Compagnie des Alpes and Grévin & Cie A Leisure Group unique in Europe

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  1. Compagnie des Alpes and Grévin & Cie A Leisure Group unique in Europe May 27, 2002

  2. CDA + Grévin & Cie 1. Compagnie des Alpes 2. Grévin & Cie 3. The project 4. Strategic interest 5. The takeover bid 6. Conclusions

  3. 1. Compagnie des Alpes OPERATION PROPOSEE • World leader in ski area management (14 resorts in France, Switzerland, Italy) 90% of Sales • Ski shops (44) 5% of Sales • Sale of developed land (4 resorts) 5% of Sales • A group with steady, solid growth 5 year averages 2000/01 • Sales + 11.5 % €221 million • Net income share of Group + 19.5% €20.5 million • A profitable group 5 year averages 2000/01 • Net margin 9 % 9.3% • ROE 12 % 14.9%

  4. La Compagnie des Alpes 2. Grévin & Cie

  5. Grévin et Cie OPERATION PROPOSEE Background: Created in 1985, opening of Parc Astérix in 1989 1 / Successful launch: 1.4 million visitors in 1991 2 / Competition with Euro Disney in 1992   1 million visitors  Financial restructuring  Return to 1.8 million in 1995  Stable visitor count since 3 / IPO in 1997  External growth needs 4 / “Consolidation” in France  in 1998, then in Europe

  6. Grévin & Cie • Today, Grévin & Cie is one of Europe’s “federators” for theme parks. • Grévin & Cie will receive 4.5 million visitors in 2002, 2% of the European market for family leisure activities: • Theme parks (Parc Astérix , Hellendoorn Avonturenpark (NL), Fort Fun (D)) • Animal parks (Bagatelle, Aquarium de Saint-Malo, Dolfinarium (NL)) • Attractions (Musée Grévin, France Miniature, Miniature Chateaux)  A diversified portfolio of leisure activities Attractions Theme parks 14% 63% Animal Parks 23% (2001 Consolidation)

  7. (in million Sales Operating Net Income euros) Income Group share 1996 46 3.7 2.3 2001 89 8 3.3 +14%/yr +17%/yr +7.5% /yr AGPA Grévin & Cie FINANCIAL INFORMATION (at 31/12/2001) Sales = €89 million Net income = €3.3 million Staff : 500 permanent, 1,500 seasonal Annual growth in sales and income Progression of sales and net income (1993-2001)

  8. Grévin & Cie SHAREHOLDERS • C3D is the core shareholder (30.2%) • Large float (55%) Breakdown of capital Public Caisse des 19% Dépôts Développement 30% Personnel Institutionals Accor 7% 34% Others 6% 4%

  9. 3. The Project To Build a Major Operator of Diversified Leisure Activities in Europe 3.1 Respective markets 3.2 Competition 3.3 Market overview

  10. The project Bringing together The world’s leader in ski area management (Compagnie des Alpes) and Europe’s fifth leading group in diversified family leisure activities (Grévin & Cie) to form a front runner in the field of “diversified leisure production” in Europe which now controls : - 17 millions visits (winter and summer) - to 24 sites - in 5 countries in Europe

  11. The Project La Compagnie des Alpes 3.1 RESPECTIVE MARKETS • Comparable size in Europe : Ski areas : • 240 million skier visits • 1,000 winter sports resorts • 60 resorts with over 1 million skier visits • 4 main countries Theme parks : • 280 million visitors • 1,000 leisure sites • 150 main parks • 11 main countries

  12. The project La Compagnie des Alpes 3.2 COMPETITION IN EUROPE • Compagnie des Alpes has no competing “consolidator” in its market in Europe. • Grévin & Cie operates on a market with two types of players: “MONO-SITE” * “MULT-SITE” * non “consolidators” “consolidators” • 85% of theme parks are operated by independents, 15% by groups * In millions of visitors France Disney: 12,6 Europe Tussaud (UK): 14 Futuroscope: 2 Six Flags (USA): 5 in Europe Marineland: 1 Aspro Ocio (Sp): 5 Germany Europapark: 3,5 Parques Reunidos (Sp): 4,5 Grévin: 4.5

  13. The Project 3.3 MARKET OVERVIEW • Until now in Europe, leisure and tourism, though complementary, have developed separately • Why? : the single-day visit hurdle • Leisure: no lodging (“outings”) • Tourism: lodging (tourism) • Now, the two sectors are converging • tourism is enhancing its offering by including leisure activities to become more attractive, • leisure activities are creating “tourism gateways” by including* lodging in the product mix *contract, shareholding, integration

  14. The Project:3.3 Market Overview • Vacations including more leisure activities • Brisk growth *(6 to 15% annually) : • 2nd and 3rd annual vacations (winter sports) • Short breaks through specific catalog offerings • Vacations with a sports or cultural focus • “all-included” vacations (including leisure activities) : 15% to 20% of customers • Moderate growth * (3 to 5% annually): • Main vacations (85% in the summer) • “Basic” packages =transportation + lodging • *Source: HSBC European travel agents

  15. The Project:3.3 Market Overview • Some leisure operators team up with lodging providers to build: • A complete product • Distributable through conventional outlets (travel agencies, Internet) • Including next-day return visits • Creating a customer relationship (return trip) • Some leisure operators perform their own tour operator functions: Disney, “Futuroscopedestination” Exemple: leisure products becoming “tourism”products : • Price for a two-day park pass + 1 night including transportation for 2 adults and 1 child *: • Disney : 661 € • Futuroscope : 307 € • * source: l’Echo touristique

  16. The Project:3.3 Market Overview • In the leisure business, fragmentation of operators is the rule • 95% of ski areas are “independent” • 85% of leisure parks are independent • In tourism, concentration is nearly completed • Package operators: 6 leaders in Europehold 75% of package holidays (Sales:Euro 42 billion) • Hotel-Leisure: the ten leading hotel chains own over 50% of all rooms (Sales: 22 billion euros) • The major players in the tourism trade, now specialized in vacation reservations, and logistics have the financial means to consolidate the leisure industry. THIS IS WHY IT IS ESSENTIAL TO REACH EUROPEAN SCALE QUICKLY

  17. The Project SUCCESS IN THE LEISURE INDUSTRY MEANS GROWING AND “FEDERATING” TWO COMPLEMENARY LINES OF LEISURE ACTIVITIES, BRINGING TOGETHER • An operator in sporting holidays, particularly winter resorts and • An operator in family leisure activities, usually located on the periphery of urban areas, and generally open in the summer

  18. 4. STRATEGIC INTEREST 4.1 COMPLEMENTARITY 4.2 SIMILARITIES 4.3 SYNERGIES 4.4 STOCK MARKET FACTORS

  19. Strategic interests: 4.1 Complementarity Compagnie des Alpes • Industry: Winter sports resorts • A mature market (+2%/year) • Clientele: 80% overnight visitors, 20% day trips • Family clientele about 33% • Origin of clientele: 80% outside the area, o/w 33% from abroad • Competitors: Other resorts • Average nb of visits per year: 3 days/visitor • Per customer revenue ~55 euros • Housing is a strategic element • Winter season (4 mos.) Few interesting acquisition possibilities Grévin & Cie • Industry: Family leisure activities located on the periphery of urban areas • Growing market (+6%/year) • Clientele: 20% overnight vistors • 80% day trips • Family clientele about 80% • Origin of clientele: 80% local, 10% from abroad • Competitors: other leisure sites • Average nb of visits per year : 1.1 day/visitor • Per customer revenue : ~25 euros • Slight dependence on housing • Summer season (6 mos.) Build-up to continue on a European scale

  20. Strategic interests:4.2 Similarities • An identical business model: • The product is access to a closed area with unlimited right of use of recreational facilities (except for stores and restaurants) • Similar operating requirements • Receiving the public: information, parking, signs, shuttles, managing waiting lines, safety and security, • Ticketing and pricing • Operating and maintaining a fleet of costly conveyances for moving visitors: ski lifts = attractions (visitor flow, loading conveyances, waiting lines) • Management of restaurants, shops, derivative products, trademarks and licenses

  21. Strategic interests:4.2 Similar management challenges • Similar management challenges at Group level: • Construction and operation of major capital assets. • Industrial-scale capital expenditures, aimed at attractiveness, renovation and differentiation. • Allocation of funds among subsidiaries and sites. • Control and consolidation of a European group operating in multiple local sites. • THE MORE PROJECTS, THE GREATER THE CHOICE AND THE POTENTIAL FOR VALUE CREATION

  22. Strategic interests: 4.3 Synergies • Marketing synergies • CDA : 4 million visitors; Grévin: 4.5 million visitors • Cross marketing, crossed “winter-summer” promotions  • Use of sophisticated marketing tools: trade-off surveys, pricing, revenue management, panels, satisfaction surveys, consumption models • Visitor data bases, CRM 60% of Disney visitors also take ski vacations

  23. Strategic interests:4.3 Synergies • Financial Synergies • CDA has a capacity to generate recurrent cash flow, but there are few acquisition opportunities in its industry and they take much time to finalize • Some of CDA’s financial resources could be used to accelerate the pace of development at Grévin • Common M&A teams • Greater borrowing capacity and on better terms (CDA’s spread is 100 b.p. less than Grévin’s • Seasonal cash positions balance each other

  24. Strategic interests:4.3 Synergies • INCOME SEASONALITY Pro forma Winter 2001 Sum. 2001 FY 2001 CDA only Diff. in EUR million 2000-2001 CDA + Grévin & Cie Sales 241 69 310 221 +40% EBITDA 105 -11 94 72 +30% Operating income 78 -29 49 41 +20% • The winter half-year more important at CDA • Income for the two half-year periods is complementary, but the contrast is greater at CDA • More intensive development of Grévin’s businesses should increase the weight of the summer season in income figures

  25. Strategic interest:4.3 Synergies Average of the last three known fiscal years Capex Cash flow in EUR million CDA 37.5 46.2 Grévin & Cie 15.4 18.7 Shareholders equity Net debt Trend over three years in EUR million CDA 163 =>184 80=>107 Grévin & Cie 93=>101 31,8=>56,6 • COMPLEMENTARITY OF CASH AVAILABLE • CDA invests about 80% of cash flow in capital expenditures; Grévin & Cie does the same • Gearing is similar at CDA and Grévin • “Available cash flow” at CDA averages €8.7m/year; the comparable figure at Grévin is €3.3m • Grévin has more “targets” , CDA has greater means

  26. Strategic interests:4.4 Stock market factors Some market data: • COMPAGNIE DES ALPES: € 230m market capitalization • Float  40% • 2,000 shares traded per day • GREVIN et Cie: € 110m market capitalization • Float  50% • 3,200 shares traded per day • CDA + GREVIN CONSOLIDATED: €340m market capitalization • 30/40% float • 1 stable, long-term shareholder: C3D • Several local or national banks • 10,000 individual shareholders

  27. 5. THE TAKEOVER 5. 1 TECHNICAL ASPECTS 5. 2 THE PRICE 5. 3 FINANCING 5.4 CONSOLIDATED BALANCE SHEET

  28. The takeover:5.1 Technical aspects • Key features of the bid • Bid to acquire all outstanding shares of Grévin & Cie • Price offered: • 30 € per share including dividend on FY ending Dec 31, 2001 • 29.64 € ex-dividend • 2.49 € per Grévin & Cie convertible bond • No threshold on number of shares • Caisse des Dépôts-Développement (C3D), core shareholder at 30.2%, is committed to sell all of its shareholdings (in Grévin)

  29. The takeover:5.2 The price • The bid at € 30 represents: • A premium of 20.5% over the last listed price, after a 31% increase since January 1, 2002 • A premium of 35.7% over the last six months’ average market price • 12-month high: € 25 • All-time high: € 28.5 • Average price targeted by analysts: € 26.9 • P/E 2001: 38x

  30. The takeover:5.3 Finanacing • Initial financing through cash available at CDA • Partial refinancing • In order to maintain a gearing at a sound level, CDA will increase its equity capital during 2002 by at least 50% of the cost of the takeover bid. • This capital increase would be done in up to three tranches: • Tranche A: 40 million euros, reserved for Alpark, the shareholding vehicle of management and of one investor. • Tranche B: 10 million euros, open to the public with an irreducible right of preemption by existing CDA shareholders • A possible Tranche C: reserved for C3D • C3D and Alpark will act in concert.

  31. The takeover:5.4 Combined balance sheet: CDA + Grévin & Cie ASSETS LIABILITIES Net fixed assets 570 Attributable shareholders equity 230 Minority interests 60 Total shareholders equity 290 Provisions 44 Net borrowings (excl. Cash) 195 Current assets 60 Current liabilities 101 Total 630 Total 630 • Assumption: 66% response to the bid Financing : Capital increase of € 58m Long term borrowing of € 27m • Gearing now at about 60% (depending on treatment of provisions)

  32. Conclusions: Targets for 2005 • Development of a leisure activities “producer” that is unique in Europe • 2 complementary businesses: 4 factors driving growth • 22 million entries (5% of the two markets * in Europe ) • 10 million total visitors; 60% in winter, 40% in summer • Broader, European listing, payment in shares * Ski areas and family leisure centers Targets 2005 Current sales level €320m Sales in 2005 Organic growth: €370m (+5% p.a.) Growth through acquisitions: €100m (+10% p.a.) Total €470m (+15% p.a.) Market capitalization c.€500m

  33. Compagnie des Alpes and Grévin & Cie A unique European leisure group May 27, 2002

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