Compagnie des Alpes - 2017 Registration Document

2 RISK FACTORS Operational risks

2.3 Operational risks

2.3.1

FINANCIAL RISKS LINKED TO THE IMPACTS OF CLIMATE CHANGE

The Group’s resorts actively participate in efforts to limit greenhouse gas emissions. Measures are undertaken to reduce the pollutant emissions of grooming machines, optimise cable ski lifts and collective transport to the resorts, etc. For further information on the measures undertaken, see Chapter 4 “Social, societal and environmental information”, section 4.3.5. Adapting to the consequences of climate change. Visitor numbers at open-air Leisure parks can be affected by rainfall. The Group reduces this risk through an adapted business policy (pre- sales for specified dates, for example) and by increasing the number of covered attractions. While the possibility of intense continuous rainfall having a lasting effect on main park visitor numbers during the summer peak cannot be ruled out, such conditions remain rare. The Group’s diverse range of activity, both in terms of its business lines, geographic locations, and multi-seasonal operations reduces the impact of this weather-related risk. In each case, if possible the Group will encourage real estate operations that spur development projects with a positive impact on the outlook of Ski areas it operates. Transactions on the real estate market are only carried out if there is a direct link to the operation of the sites on which the Group conducts its principal business activities. Consequently, Compagnie des Alpes is exposed to the risk of a possible downturn in the real estate market. However, since most of the land rights in which it had invested have been sold, its exposure so far remains limited. The Group ensures that: z the equipment used is designed, manufactured, installed, operated, and maintained in strict application of current standards, so that under normal conditions, or conditions reasonably predictable by a professional, normal safety conditions are respected and no person’s safety is put in jeopardy; z products (consumables and other products) comply with current regulations and standards. The Group relies on a network of partners in the areas of quality and safety who are responsible for improving control processes. At the Group’s sites and at its headquarters, emergency plans have been devised in case of a serious accident in order to limit the consequences as much as possible. A crisis management system is also in place.

Ski area operators deem a continuous lack of snow their most significant risk. Though it has not occurred for many years, the risk of a serious extended shortage of snow over a complete season can never be completely excluded. All climate models forecast a gradual increase in average air temperatures worldwide in the 21 st century. Concerning future snow levels, there could be good winters, along with normal winters and low- snowfall winters. Over time, good winters could become rarer, while less favourable winters could become more frequent and snowfall could gradually decline (1) . However, Compagnie des Alpes has acknowledged this risk through its choice of sites, which are always located at altitudes high enough to enjoy favourable long-term snow conditions. Snow-making and snow-quality programmes are a vital part of this strategy. The Group’s resorts have long undertaken measures aimed at diversifying their offering, for example by developing fun non-ski activities. 2.3.2 THE CURRENT REAL ESTATE MARKET Many French winter sports resorts are seeing a part of their rental property downgraded, and some professional accommodations transferred to general use, which can affect occupancy and thus Group sales figures. Compagnie des Alpes intends to find solutions to solve this problem. As a consequence, it partnered with a group of institutional investors to set up a mechanism for acquiring and marketing of these so-called “cold beds”. This project, handled by Foncière Rénovation Montagne, has been rolled out in five resorts whose ski area is managed by the Group. 2.3.3 RISKS OF BODILY INJURY The nature of the Group’s activities means that it is exposed to the risk of customers or employees being involved in an accident on the Group’s sites, especially: z when using, operating or carrying out maintenance on ski lifts or, attractions and facilities in amusement parks; z in relation to the compliance of products made available to customers (sales in shops, products for advertising or promotional events); z health risks related to catering or caring for livestock. Visitor and staff safety is a major concern for all managers and employees of the Group.

(1) Source: DSF.

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Compagnie des Alpes I 2017 Registration Document