Compagnie des Alpes - 2017 Registration Document

1 INTRODUCTION TO COMPAGNIE DES ALPES AND ITS ACTIVITIES Activities, market and competition

1.1 Activities, market and competition

With nearly 23 million visitors to its 24 (1) sites in 2016/2017, Compagnie des Alpes is a major player in the European Leisure sector. It is the world leader in ski-area management (2) , operating 11 of the largest ski areas in France. It is also a major European-based player in Leisure parks with 13 sites: 5 in France, 3 in Belgium, 1 in the Netherlands, 1 in the Czech Republic, 1 in Switzerland, 1 in Canada and 1 in South Korea.

1.1.1

SKI AREAS (56% OF 2016/2017 GROUP CONSOLIDATED REVENUE)

In the 2016/2017 season (4) , the three countries that registered the highest number of skier-days were the United States (54.7 million), Austria (52.1 million) and France (51.1 million). Although skiing is a widespread activity, there are very few “large” resorts (a resort is considered “large” when it exceeds one million skier- days per season) and 83% of these are located in the Alps.

The Group’s ski lift companies equip, maintain and operate ski areas. Their main task is to develop and manage natural areas in order to be able to offer their customers alpine skiing activities and high-altitude recreational activities in a way that respects the environment and offers optimal safety. The resorts where Compagnie des Alpes operates are all located in France, where the business model is based on very-long-term concession agreements. The characteristics and durations of these agreements are described in Chapter 5 (Note 1.13. to the Consolidated Financial Statements). Compagnie des Alpes is thus one of the key contributors to the local economy, alongside accommodation providers, local authorities, and École du ski français (ESF – French Ski School). Their revenues are drawn from entrance fees for ski lifts. Expenses are related to the financing of facilities, personnel costs, taxes and local fees, and normal operating costs (maintenance, energy, insurance, etc.). In addition to its portfolio of 11 ski areas, Compagnie des Alpes holds minority interests in 4 French companies that operate the ski areas in Chamonix (37.5%), Avoriaz (20%), Valmorel (20%), and La Rosière (20%). As a secondary activity, the Group sells land to real-estate developers. At present, this activity has not exceeded 5% of total Ski areas revenue and has been limited to two ski areas – Les Arcs and Flaine. This business is conducted under the development concessions that are also described in the above-mentioned Note 1.13. As the land is held for sale, its net book value is recorded under inventories on the balance sheet (Chapter 5). 1.1.1.1 The global ski market (3) The global ski market is made up of close to 2,000 resorts in around 67 countries. It records a total of 400 million skier-days (including indoor ski slopes) and offers professional accommodation for 6 million, primarily concentrated in developed countries.

DISTRIBUTION OF THE GLOBAL SKI MARKET BY GEOGRAPHIC AREA 18 % Asia-Pacific

36 % Europe – Alps

21 % Americas

12 % Rest of Western Europe

13 % Eastern Europe and Central Asia

1.1.1.2 Market and competition in Europe (5) Very few skiers take long-haul flights to go skiing on the other side of the world. Consequently, the real market for Compagnie des Alpes is Europe. The European ski market is estimated at 45 million people, representing 220 million skier-days. Based on average receipts of €30 per skier-day, this represents a market of €6.5 billion. There are numerous market players in Europe, most of which operate on just one site. Compagnie des Alpes, along with Swedish group Skistar, which is listed on the Stockholm stock market, is one of the only groups to operate several sites.

(1) In the 3 rd quarter 2016/2017, Compagnie des Alpes sold the Fort Fun site in Germany. (2) No company or group comparable to Compagnie des Alpes that operates ski lifts has a higher number of skier-days than the Group. (3) Source: Laurent Vanat, 2017 International Report on Snow & Mountain Tourism. (4) Source: Domaines Skiables de France – 2017 Indicators and Analysis. (5) Source: Laurent Vanat, 2017 International Report on Snow & Mountain Tourism.

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Compagnie des Alpes 2017 Registration Document