Le 18-19 of Hedwige Chevrillon. You are listening to the 18-19. My guest is Franck Gervais, he is the CEO of Pierre et Vacances Center Parcs. Good evening, Franck Gervais.
Thank you for being with us. A day when you published this morning, it was your half-year results because indeed you have a shifted fiscal year, I'd say due to your activity, and that is also reflected in the numbers you published this morning because you are in loss but at the same time the first half is when you have all the expenses to pay and there is not much activity because the activity obviously happens from today onwards, the high season as they say. If you had to remember one thing from your half-year results, what would it be?
The figure I would remember is our revenue, which is growing across all our brands that you mentioned: Pierre et Vacances, Center Parcs, Adagio and Maeva. We have four brands.
Yeah, and there are two missing, yes.
6% compared to the previous half-year, so it's a very good figure that we are happy with. We will talk again about spring-summer reservations, but that's the figure I would cite, knowing that this half-year represents 40% of our annual sales because the second half includes spring and summer, which has 60%, so that's where we make all the margin in the second half.
Yeah. Would you say, because you have come here several times to this studio and there have been very difficult times. Are those very difficult times, this restructuring, is it really behind you, knowing that you have a strategic review, we will talk about it at the end of this interview, especially we will learn more about potential investors likely to take a stake in your...?
Yes, the restructuring is completely behind us, it was completed in 2022.
And since then, what we have done is we changed the group's business model, we ended property development for example, and we said, look, we have four brands, we are an operator that must be the leader in Europe in proximity tourism. And so we want to welcome many more families, we want to offer them experiences at the heart of nature, we want to grow, and what is healthy and shows we are well out of restructuring is that we have solid performance bases. Our margin is increasing, it is twice the margin we had before Covid, so times two. Our balance sheet is very good because we have more cash than debt. But how do you explain this loss of more than 100? Well, it's very simple, in fact, the group has 2 billion in revenue over the year. The first half does 40% so about 800 million, the second half does 1 billion. However, the costs, the expenses, so rents, personnel costs, energy, are completely smoothed. So you see that in fact the expenses are equal between the first half and the second half, while there is a 400 million difference in revenue. So the second half will be very very very profitable. What we look at is how much we will make at the end of the year and we know, we have confidence that we reaffirmed this morning during the results, that at the end of the year we will do about 2 billion in revenue and a gross margin of 185 million, that's what we had announced and we confirmed it this morning.
So you confirm your objectives for the full year.
And the mid-year passage is good, you know. And the result is negative, but by construction, I was going to say, but the passage, we are ahead of our mid-year passage.
Yeah. Exactly, what is the impact of this Middle East crisis, what impact on? Because I imagine there are lots of people who were going to Dubai or to the Middle East or even to Iran, and who suddenly say to themselves we will stay in France or Europe. So it's rather good for your reservations. And so what is the level of reservations for this summer by?
We see with the impact of the Middle East crisis that it has two effects. The first is obviously an impact on purchasing power, the increase in gas prices, so also more difficulty for people to plan ahead. Conversely, as you said, we know that customers this spring and summer will not travel far, that's certain. And so instead of going for 3 weeks to an international destination, they will rather do two weeks in nearby destinations. And so overall, we see that it's a positive effect for us. We just saw it, we are almost at the end of May, we had an excellent May and the reservations for summer are also good, so we will have a very good summer.
Well, we haven't communicated it, so I can't
but you are here, this is not a press release.
We did more than 6%, what I can tell you is that in May we did a figure that is even better than that.
Alright. OK. So rather very optimistic from that point of view, purchasing power hasn't played a role, but have you lowered your prices or have you...?
So we have maintained them and we showed it this morning, we have a slight increase of 1.5% in our prices in the first half, that's what we continue to do in the second half. Because customers want to continue going on vacation, it's important for them to go with family and friends, they want better experiences, so the satisfaction of their stay improves, they all tell us, but they have a real price constraint, and so that's why we rather increased the occupancy rate and on prices, we remained very reasonable, I tell you plus 1.5% and it will be the same this summer.
So you have tourism activities, it's about 70% of your revenue, is that right?
More than 90%, you have four brands, if we try to see exactly which brand is leading compared to your forecasts or
Well, they are all different and I was going to say complementary, but in this case we see it over the half-year and it's the same for the year, they all fit within a very small range. When we say plus 6% growth in the first half, all of them are between 5.5% and 6.5% or 7.5% growth. So we see Center Parcs which is in five European countries now, including Denmark which we opened and is doing great, especially on short four-day stays during spring weekends. Pierre et Vacances is becoming more European, we know Pierre et Vacances in France but Pierre et Vacances is also in Spain and now
How many Pierre et Vacances sites? How many are left in?
Um, there are about 150 in France, 50 in Spain, and we just opened last month Switzerland, four residences, and Portugal, a hotel. And so Pierre et Vacances is doing great on destinations that are well-known in France, but also, and that's the change in habits of the French, destinations like Vendée, Charentes-Maritime which are growing by more than 10% for example, because customers are looking for destinations, locations a bit less known than the classic Provence-Alpes-Côte d'Azur, Normandy, Basque Coast.
If I ask you the question, is there not also generational changes, is there not a change in consumption of leisure? Shouldn't you evolve your Pierre et models? Let's recall that it was Gérard Brémond who created that at the end of the 70s. So even if it has evolved now, is there not a desire for something else?
The model actually is becoming very modern and very sought after. Because you are in an apartment with a kitchen and roughly one bathroom per bedroom. So parents and children can each have their freedom, you can go with friends, you share moments of conviviality, but each also has their autonomy, and so it's very popular. Then I saw photos behind you, the new consumption patterns, camping in our product lines, camping by Maeva is doing great, it's working very well because we are at the heart of nature, in amazing destinations, and so that pleases, we have growth of 10% on camping for example. And then there are new elements, for example unusual types of consumption on farms, we bought a startup that does that. So these are tiny houses, so you see small houses, small bungalows that we put on farms, we have already installed 50, it's a hit, and so we are growing the number of destinations, tree houses. So all of that really pleases.
Yes, so you are reinventing yourself, reinventing a form of, yes, diversifying. How much does that represent approximately?
Well, I'd say in our ranges, we had entry-level ranges that were classically what Center Parcs and Pierre et Vacances used to do before. Now, it's 40% of the offer, and everything that is premium, VIP, unusual houses, tree houses, all that is really now the core of our offer. For Pierre et Vacances, a third of Pierre et Vacances are premium, four-star, which are magnificent.
Yes. And Center Parcs, how many Center Parcs are there, you said we had 30.
There are seven in France and 30 in total in Europe. Yes. And it's also a concept that you have evolved a lot, you did a lot of work during this difficult restructuring, but it's relatively expensive despite everything. Is it something that fits today with the purchasing power crisis?
Well, what we see is we are in strong growth. France did plus 6% for Center Parcs in the first half. And when we say relatively expensive, in fact the average price is simple. On average, a cottage, these are cottages at Center Parcs, you rent it on average per night for 200 euros.
And on average you are four people in a cottage.
And so when you compare to the price of a hotel night, when you see hotel prices in Paris, in the provinces, in big cities, and with that you have the activities, the attractions that I see behind me, that is access to Aquamundo, a fun pool, you have half of the activities we offer are free, and so it's included in the 200 euros I mentioned. So relatively expensive? No, we have customers who tell us it's actually very cheap compared to the experience you offer. There are 25 free experiences on average in each Center Parcs with that price.
Um, your competitors, is it not Airbnb actually your competitor because you talk about going to the farm, finding unusual places, finding slightly different destinations. You see, you are still moving a lot towards new concepts. Like Airbnb.
Like Airbnb, so effectively we have the big distribution players, those big platforms on one side, on the other side at the end of the chain we have hotels, and in the middle we are really in what is called the tourism residence sector, open-air accommodation with amusement parks, tourism residences, aparthotels also, and Adagio, and all that we see has a growth that is stronger than traditional hotels.
Yeah. And that is really the direction you are turning towards. Oh, since you mention platform, you were a victim, what was it, about 15 days, 3 weeks ago, of a big big attack, a cyberattack on, and there are about 4 million data that were stolen or hacked through your? What happened? Do you know more and how can you reassure those who trust you?
