Pierre & Vacances : First half results for 2020/2021

Paris, 3 June 2021

First half of the year harshly affected by the closure of virtually all tourism sites due to

measures related to the ongoing health crisis

1. Main events

Governance

On 7 January 2021, Franck Gervais joined Pierre & Vacances Center Parcs as the Group CEO.

Franck Gervais, 44 years old and a graduate from the prestigious French Polytechnique and Ponts et Chaussées Schools, successfully piloted the transformation of the Accor Group's European sector. Previously at the French railway group SNCF, he was CEO of Thalys and then of Voyages-SNCF.com. This combination of operating-digital-marketing experience, strategic vision and recognised leadership can be fully applied to leading the PVCP Group in the future.

Impact of the health crisis on the Group's activities and conciliation procedure

The ongoing Covid-19 pandemic and the ensuing restrictive measures took a heavy toll on the Group's activities during the first half of the year. More specifically, the closure of ski-lifts in France over the winter as well as the ban on access to waterparks, restaurants, indoor sports and leisure activities obliged the Group to close virtually all of the Pierre & Vacances residences and Center Parcs domains.

In this backdrop, on 2 February, the Group initiated an amicable conciliation procedure for four months, with an extension possibility. The procedure aimed to reach amicable solutions with the Group's main partners, specifically its creditors and lessors, supervised by the conciliator.

Discussions between the Group and its various financial partners resulted in a new financing agreement1 for a loan of a maximum amount of €300 million, including a first tranche of €175 million (due to be made fully available in early June 2021) and a second tranche that can be cancelled with no penalty, of a maximum amount of €125 million (to be drawn in full or partly by end-October 2021 at the latest). This financing is primarily aimed at covering the Group's short-term requirements for operating activities pending an operation to strengthen equity that is being set up in parallel, with several signs of interest already received by the Group.

At the same time, after suspending rental payments to partners of the companies concerned by the conciliation procedure, the Group initiated discussions with its lessors and their main representatives with the aim of drawing up joint solutions for the handling of rents.

Finally, the Group has called on the French government for compensation in reference to the measures adopted concerning ski-lifts in ski stations.

1 The terms of this new financing are described in detail in the press release of 10 May 2021.

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Reinvention Strategic Plan2

On 18 May, the Group announced its new strategic plan for 2025, Reinvention.

Aimed at creating performance and value, this strategic plan is based on a new vision of reinvented local tourism, with three major decisions:

• A radical modernisation and generalised premiumisation, underpinned by additional investments (€130 million) relative to the previous plan, in addition to a renovation programme of more than €700 million for the Center Parcs domains, majority financed by their owners.
• Switching from a host offer to a 100% experience-based offer, that is more digital, personalised and service- based.
• An ambitious and responsible development, with new concepts, placing our property development expertise at the service of customer experience.

The strategic should result in a significantly improved performance3:

• Prospective revenue from the tourism businesses of €1.838 billion in 2025 (€1.587 billion in 2023), up by €473 million relative to 2019.
• A reduction in support function expenses to reach 7.5% of revenue in 2025 vs. 12.6% in 2019, or €24 million in additional savings,
• Target Group EBITDA4 of €275 million in 2025 (€146 million in 2023), of which €255 million generated by the tourism businesses and €20 million by the property development businesses. Current operating margin in the tourism businesses ought to reach 5% in 2023 and 10% in 2025.
• Cash flows before financing of €176m in 2025 (€49 million in 2023), or operating cash generation of €273 million over 2022-2025.

1. Revenue and net income for the first half of 2020/2021 (1 October 2020 to 31 March 2021)

The financial items commented on hereafter stem from operating reporting, which is more representative of the performances and economic reality of the contribution from each of the Group's businesses, i.e. excluding the impact of IFRS16 application for all financial statements and excluding the impact of IFRS11 for income statement items (with no change relative to the Group's historical operating reporting presentation).

Moreover, the operating and legal reorganisation implemented since 1 February 2021 resulting in the regrouping of each of the Group's activities into distinct and autonomous Business Lines, has led to a change in sectoral information in application of IFRS8. The main consequence for communication of the Group's results is the presentation of the contribution from each operating sector, including the Adagio operating entity.5 Financial years prior to the change in legal structure are set out by business (Tourism and Property Development), in line with the Group's historical operating reporting.

Note that the Group's operating reporting is set out in Note 3 - Information by operating segment in the appendix to the half-year consolidated financial statements. A reconciliation table with the primary financial statements is presented hereafter.

1. The full financing of this plan remains subject to an operation to strengthen the Group's equity. The targets mentioned in the strategic plan take precedence over all other targets previously communicated by the Group.
2. Additional financial information, as well as the financial items resuming the terms of the new financing and the Group's estimated liquidity position between June 2021 and September 2022 on the basis of the main assumptions retained, are set out in the appendix of the detailed presentation of the strategic plan available on the Group's website(www.groupepvcp.com) under "Presentations".
   Note in particular that the financial items communicated for 2021 in this presentation, are made up of prospective data drawn up on

1. April 2021 under the framework of the conciliation procedure which remain subject to significant uncertainties, notably concerning the recovery in the Group's activity. These elements do not factor in the outcome of discussions underway with the group's various partners, or eventual government compensation measures currently being decided, and may therefore not be construed as either a target or an estimate.

1. EBITDA: Earnings before interest depreciation and amortisation
2. The entity includes the contribution from leases taken out by the PVCP Group and entrusted to the joint-venture Adagio SAS for management, as well as the share of the contribution from Adagio SAS held by the Group.
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2.1. Revenue

€ millions	2020/2021	2019/2020	Change
	according to operating	according to operating
	reporting	reporting
Tourism	165.0	547.4	-69.9%
- Center Parcs Europe	93.2	320.7	-70.9%
- Pierre & Vacances Tourisme Europe	46.3	152.0	-69.5%
- Adagio	25.5	74.7	-65.9%
o/w accommodation revenue	108.3	367.1	-70.5%
- Center Parcs Europe	64.8	211.3	-69.3%
Pierre & Vacances Tourisme Europe	23.4	92.2	-74.6%
- Adagio	20.1	63.6	-68.3%
Property development	132.2	148.6	-11.0%
Total H1	297.2	696.0	-57.3%

• Tourism revenue
  H1 2020/2021 tourism revenue stood at €165 million, down 69.9% relative to H1 2019/2020, with the Group's businesses suffering massively from the ongoing health crisis in Europe and the ensuing restrictive measures:
• • Center Parcs Europe incurred a 70.9% decline affected by a very low level of operation of the Belgian, French and German domains, closed for most of the half-year period (as of early November), and restricted offers at the Dutch domains (quotas or closure of the Aquamundo, indoor activities and restaurants);
  • Pierre & Vacances Tourisme Europe incurred a 69.5% decline penalised by the closure of virtually all its residences during the second lockdown and the limited reopenings over the rest of the half-year period, especially at the mountain resorts due to the closure of ski-lifts.
  • The Adagio residences revenue was down 65.9%, affected by the lack of business and international clients, and the closure of almost one third of the aparthotels.
• Revenue from property development
  H1 2020/2021 property development revenue totalled €132.2 million, compared with €148.6 million, driven primarily by the contribution from renovation operations for Center Parcs (€65.8 million), Senioriales residences (€33.6 million) and the Center Parcs Lot-et-Garonne (€16.9 million).

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2.2 Results

The Group's earnings are structurally loss-making in the first half period due to the seasonal nature of its businesses. On 31 March 2021, results were also harshly affected by the ongoing health crisis.

€ millions	H1 2021	H1 2020
Revenue	297.2	696.0
Tourism	165.0	547.4
Property development	132.2	148.6
EBITDA	-286.1
Tourism	-279.1
Center Parcs Europe	-176.6
Pierre & Vacances Tourisme Europe	-77.2
Adagio	-25.3
Property development	-7.0
Current operating profit (loss)	-307.2	-125.6
Tourism	-297.3	-116.7
Property development	-9.9	-9.0
Financial items	-13.1	-10.5
Other operating income and expense	-11.2	-10.6
Equity associates	-0.9	-0.6
Taxes	-9.6	1.6
Profit (loss) for the year	-342.0	-145.8
Group share	-342.2	-145.8
Non-controlling interests	+0.2	0.0

The current operating loss amounted to -€307.2 million (vs. -€125.6 million during H1 2019/2020), harshly affected by the closure or operation at reduced services of a large number of sites for the majority of the half-year period.

The Group therefore incurred a decline in tourism revenue of €382 million resulting in a loss of almost €190 million and including, in addition to the reduction in costs related to the partial or full closure of the sites:

• compensation related to the decline in revenue (primarily for short-time working measures in France) of around €30 million.
• rental savings of a net amount of €20 million, limited at this stage pending the outcome of negotiations underway to (i) rents for individual lessors suspended for the periods of administrative closure6 (November to mid-December 2020), (ii) net savings generated by the application of agreements concluded with institutional lessors for the period of March-May 2020 and concerning this first half of 2020/2021 (write-off/variable rents with minimum amounts guaranteed, net of provisioning for rents for the return to better fortune clauses).

The first half also recorded savings made as part of the Change Up plan for €12 million.

Net financial expenses totalled €13.1 million, higher than the level in H1 2019/2020 mainly due to additional interest expenses for the drawing on credit lines and the state-backed loan obtained in June 2020.

Other operating expense totalled €11.2 million. This was primarily made up of costs related to the legal reorganisation and the conciliation procedure for an amount of €6.6 million, as well as depreciation of intangible assets and property stocks for a total of €3.1 million.

6 on the principal basis of inexecution exception.

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Tax expenses totalled €9.6 million, mainly for the reversal of deferred tax assets in France.

The Group's net loss came in at €342.0 million vs. -€145.8 million in the first half of 2019/2020, in the context of the ongoing health crisis.

2.3. Balance sheet items Simplified balance sheet

	€ millions			31 March 2021			30 Sep. 2020			Change
	Goodwill				138.2				140.0			-1.8
	Net fixed assets				345.9				362.3			-16.4
	Lease assets				83.4				86.1			-2.7
	TOTAL USES				567.5					588.4			-20.9
	Share capital				-425.2				-83.9			-341.3
	Provisions for risks and charges				86.9				111.2			-24.3
	Net financial debt				644.7				330.6			314.1
	Debt related to lease assets obligations				93.2				94.7			-1.5
	WCR and others				167.9				135.8			32.1
	TOTAL RESOURCES				567.5					588.4			-20.9
Net financial debt
	€ millions		31 March 2021	30 Sep.		Change	31 March		Change
		2020				2020
	Bank/bond debt	532.4	528.8	3.6	269.4	263.0
	Cash (net of overdrafts/drawn revolving credit lines)	112.3	-198.3	310.6	31.8	80.5
	Available cash	-149.6	-205.3	55.7	-252.8		103.2
	Drawn credit lines and overdrafts	261.9	7.0	254.9	284.6		-22.7
	Net financial debt		644.7	330.6			314.1	301.2			343.5

Net financial debt (bank/bond debt minus net cash) on 31 March 2021 (€644.7 millions) corresponded primarily to:

• the state-backed loan obtained in June 2020 for a nominal amount of €240 million;
• 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;
• loans taken out by the Group as part of its financing of property development programmes destined to be sold off for €46.2 million (of which €24.8 million for the CP programme in the Lot-et-Garonne, €12.5 million for the Avoriaz programme and €8.9 million in Seniorales accompaniment loans;
• credit lines drawn down in the backdrop of the health crisis for an amount of €261.9 million (revolving, confirmed credit lines and overdrafts authorised);
• accrued interest for an amount of €9.4 million;
• net of available cash for €149.6 million.
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