Compagnie des Alpes - 2017 Registration Document

2 RISK FACTORS Financial risks

The Group did not observe any significant drop in visitor numbers at its sites following the terrorist attacks of 2016 and 2017 (except at Musée Grévin Paris, which has already published information on that subject) and does not consider the risk related to terrorist attacks as a specific risk. The Group is unable to assess the impact of that risk on its financial position or results, in particular because of the geographical spread of its business activities. Nevertheless, the security of visitors and employees generally remains a major concern for the Group. Measures aimed at protecting visitors and employees have been implemented and are reviewed by the teams on a regular basis.

Compagnie des Alpes relies largely on the work of its Group Risk Committee to identify and evaluate risks. The risks to which the Group is exposed are described in this section, in three categories: financial risks (liquidity, interest rate, foreign exchange, etc.), legal risks, and operational risks. Depending on the risk, main preventive measures and potential situations to be taken into account are also detailed. In accordance with its regulatory obligations, the Group has reviewed the risks that might have a significant negative effect on its business, its financial position or results, and has concluded that there are no specific or material risks other than those presented below.

2.1 Financial risks

The Group’s companies are exposed mainly to liquidity and interest rate risks. Foreign exchange risk, on the other hand, is low. The policies regarding the management of liquidity risks, as well as interest rate and counterparty risks, are the subject of recommendations submitted to the Board of Directors by the Strategy Committee. These recommendations are implemented by the Group’s Finance Department via CDA Financement – a wholly-owned subsidiary of Compagnie des Alpes – and are presented to the Audit Committee on a regular basis.

2.1.1 LIQUIDITY RISK The Compagnie des Alpes Group anticipates its financing needs. When the Finance Department draws up its multi-year plans, it ensures that it always has sufficient liquidity to cover investments and current operations, and cope with any exceptional events. The medium-term debt of the Compagnie des Alpes Group is diversified, as described in Note 6.11, and is based on disintermediated and bank financing (bank loans, bond issues, revolving credit facility) with staggered maturities.

Most of these credit facilities are subject to a banking covenant, which is described in Note 6.11 to the Consolidated Financial Statements. Short-term liquidity needs are covered by bank overdrafts which are renewable annually and are not subject to covenants. As of 30 September 2017, the Group’s net financial debt stood at €381 million.

The Group’s gross financial debt (see Note 6.11 to the Consolidated Financial Statements) came to €427.3 million, broken down by maturity as follows:

Total

Less than 1 year

From 1 to 5 years

Over 5 years

(in millions of euros)

Financial liabilities

427.3

227.6

4.3

195.4

Financial assets

46.9

46.9

Net position

380.5

180.8

4.3

195.4

As at 30 September 2017, the Group had a significant buffer of undrawn credit facilities: z €355 million in medium- and long-term loans can be drawn upon at any time: z a revolving credit facility of €250 million expiring in May 2021, z €105 million in bank loans taken out in February 2017 and maturing in 5, 6 and 7 years; z moreover, for short-term requirements, €135.8 million is available at any time in the form of overdrafts.

After the reporting date, on 31 December 2017, the Group has: z €180 million in undrawn medium-term loans; z €70.9 million in overdrafts which had not been utilised. The liquidity risk review shows that the Group currently has enough credit lines (bonds, revolving loan, bank loans and overdraft facilities) to finance its investments and working capital requirement. As indicated in Note 2.2 to the Consolidated Financial Statements, the Group believes it can meet its future repayments on time.

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Compagnie des Alpes I 2017 Registration Document