Compagnie des Alpes // 2020 Universal Registration Document

2 RISK FACTORS Strategic risks

2.2.2 RISKS RELATED TO 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 revenue 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, initiated by “Foncière Rénovation Montagne”, allows the acquisition, renovation, upgrade and marketing of accommodation units. It has been deployed in 5 resorts located in a ski area managed by the Group.

The latest grooming techniques also help to maximise the duration of the snow cover on the slopes while reducing the number of grooming operations required. Visitor numbers at open-air Leisure parks can be affected by rainfall and severe heat waves. 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. To improve visitor comfort, the Group has stepped up the installation of mist sprayers and sun shelters. 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. Whenever possible, the Group favours real estate operations with long- term leases and high-performance managers offering highly attractive products, thus spurring development projects with a positive impact on the 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. Furthermore, Compagnie des Alpes is developing a network of real estate agencies with 13 companies and 28 offices managing a total of 13,500 beds.

In this way, Compagnie des Alpes is helping to put residential units back on the market (478 units have been acquired and renovated) previously occupied a few days in the year, with a total renovation investment of €11 million.

2.2.3 RISKS RELATED TO THE EFFECTS OF CLIMATE CHANGE Ongoing shortage of snow throughout a season cannot be totally ruled out and constitutes the risk which ski area operators are most aware of.

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. However, Compagnie des Alpes has acknowledged this risk through its choice of sites, which are located at high altitudes to enjoy favourable long-term snow conditions. Moreover, our snow-making and snow-quality programmes strengthen this strategy and increase the resilience of our economic model. The Group’s resorts actively participate in efforts to limit greenhouse gas emissions. Measures are taken to reduce the pollutant emissions of grooming machines (of which the latest models reduce fuel consumption), as well as optimise cable ski lifts and collective transport to the resorts, etc. Given the stiff competition in leisure activities, the Group must constantly improve its offering and enhance the customer experience, while investing in new attractions and in the renovation of ski lifts to ensure both comfort and safety. The Group has also undertaken to optimise its resources, particularly through yield management. Our new digital strategy, which involves extensive knowledge of our customers, is instrumental in improving our customers’ satisfaction and securing their loyalty.

2.2.4 RISKS RELATED TO THE COMPETITIVE ENVIRONMENT

This drive to provide Very High Satisfaction to our customers – which has been one of our core concerns for a number of years – enables us to constantly improve our competitiveness and thus raise the positioning of the Group’s sites in relation to competitors. Moreover, Compagnie des Alpes tracks the positioning of its competitors in each of its strategic activities and geographical areas.

2.2.5 RISKS RELATED TO A MAJOR EPIDEMIC-PANDEMIC

Compagnie des Alpes has included the “epidemic-pandemic” risk as a priority 2 in the mapping of major risks, in accordance with the monitoring of a proven global risk. In January 2020, a daily monitoring of the pandemic was introduced, taking into account the information provided by certain organisations, including the WHO.

Compagnie des Alpes has identified all the measures to be taken to protect the safety of its customers and employees. During the year, the preservation of cash and the reduction of certain non-essential costs gave the Group great resilience in the face of this major crisis.

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Compagnie des Alpes I 2020 Universal registration document