The Société des Bains de Mer remains optimistic despite difficult economic results

The Principality’s largest employer recorded a 46% drop in turnover in the 2020-2021 financial year.

The health crisis caused by the COVID-19 pandemic has had a significant impact on the business of the Société des Bains de Mer (SBM), as evidenced by the report of the Ordinary General Meeting of Shareholders of 24 September 2021. 

The results are as negative as the news for the past year suggests: in 2020-2021, SBM’s turnover fell by €282.9 million, a 46% decrease compared to the 2019-2020 results (€336.9 million versus €619.8 million). Only commercial and residential rental activities saw their turnover increase.

A restructuring plan

Clearly, the increase in the number of visitors to SBM establishments due to the summer period was not enough to turn around the accounts, which had been damaged by months of health restrictions.

In order to remedy this drop in turnover by almost half, SBM has undertaken a restructuring plan involving 234 voluntary departures and 2 forced collective departures of employees. These departures should result in savings of 18 million euros per year. In addition, the Sun Casino at the Fairmont did not reopen at the end of the lockdown period and was subsequently declared permanently closed.

In addition to drastically reducing its expenses, SBM has embarked on a programme to issue short-term negotiable debt securities (NEU CP) for a maximum amount of EUR 150 million. Its banking partners have granted it loans totalling €177.2 million, of which €26.4 million has already been repaid in June.

What’s next?

The summer holiday period was a welcome boost for SBM establishments, including many hotels and restaurants. However, the latter suffered from a clear drop in the number of international clientele (Middle East, United States, Latin America, etc.). As for the share of French customers in the hotel industry, it rose to 45.8% compared to 19.4% for the previous year.

However, the shareholders of the Société des Bains de Mer are confident about the future: the higher prevalence of vaccinated people in the population and the gradual resumption of tourist flights worldwide should improve the company’s situation in 2021-2022.