Star Entertainment Group Limited · ASX:SGR
Star Entertainment — H1 FY24 Earnings Presentation
37 slides from Star Entertainment's earnings presentation, Feb 29, 2024
Slide 1: H1 FY24 Results Presentation ASX Announcement
ASX Announcement 29 February 2024 H1 FY24 RESULTS PRESENTATION Attached is the presentation regarding the financial results of The Star Entertainment Group Limited (The Star) for the half-year ended 31 December 2023 (H1 FY24). A briefing for investors, analysts and media will be held via an audio we
Slide 2: H1 FY24 Results Presentation
Queen’s Wharf Brisbane Concept image for illustration purposes only H1 FY24 RESULTS PRESENTATION 29 FEBRUARY 2024 The Star Entertainment Group Limited ABN: 85 149 629 023
Slide 3: Contents
Contents Page 1. Our Strategic Overview 3 2. Our Key Regulatory Milestones 4 3. Our Focus on Remediation 5 4. Our Focus on Resolving Major Business Challenges 6 5. Regulatory Update 7 6. H1 FY24 Results Overview 9 7. Group Financial Results 15 8. Trading Update + Looking Forward 21 9. H1 FY24 Q&A 28
Slide 4: Our Strategic Overview
OUR STRATEGIC OVERVIEW • We are a business that understands and respects obligations, regulations and compliance. SUSTAINABLE • We strive to: 9 Find safer methods of play OUTCOMES 9 Look for new products for our guests 9 Provide a positive contribution to our communities 9 Maintain a financially sus
Slide 5: Our Key Regulatory Milestones
OUR KEY REGULATORY MILESTONES The Ethics Centre Bell Report Gotterson NSW Casino AUSTRAC QLD Casino engaged to undertake Deloitte engaged to NSW proposed new (NSW) Report (QLD) Licence commences Civil Licences suspended a culture review - undertake a Root casino duty rates Published Published suspen
Slide 6: Our Focus on Remediation
OUR FOCUS ON REMEDIATION FOCUS ON REMEDIATION - PROGRESS MADE AML SAFER GAMBLING RISK AND CULTURE, BOARD AND CAPABILITIES CAPABILITIES COMPLIANCE ACCOUNTABILITY AND LEADERSHIP TEAM GOVERNANCE • We have expanded our AML • We have more than quadrupled • We have increased our risk team • The highly res
Slide 7: Our Progress on Resolving Major Business Challenges
OUR PROGRESS ON RESOLVING MAJOR BUSINESS CHALLENGES SIGNIFICANT MATTER UPDATE RESOLVED • Agreement reached with the NSW Government to amend the casino duty rates removing considerable NSW Casino Duty Rates • • uncertainty introduced in December 2022 New casino duty rates will result in an estimated
Slide 8: Regulatory Update
REGULATORY UPDATE NSW REGULATORY UPDATE • Post the Bell Review, the NSW Independent Casino Commission (NICC) suspended indefinitely The Star Sydney’s casino licence, appointed a Manager and imposed a $100 million fine • The fine has been paid in full as at 31 December 2023 Casino Licence • The term
Slide 9: Regulatory Update
REGULATORY UPDATE QUEENSLAND REGULATORY UPDATE • Post the Gotterson Review, the Queensland Attorney-General and Casino Regulator advised of the deferred suspension of The Star’s Queensland casino licences, appointed a Special Manager and imposed a $100 million fine • The fine has been paid in full a
Slide 10: H1 FY24 Results Overview
H1 FY24 RESULTS OVERVIEW Group Results Overview The Star Sydney Results Overview The Star Gold Coast Results Overview Treasury Brisbane Results Overview The Star Gold Coast 9 Concept image for illustration purposes only
Slide 11: H1 FY24 Group Results Overview
H1 FY24 GROUP RESULTS OVERVIEW Normalised Earnings Net Revenue EBITDA Net Profit after Tax (14.6%) (43.1%) (42.7%) $43.6m $199.7m $1,013.2m $865.7m $25.0m $113.6m $575.8m $29.4m ($73.7m) H1 FY22 H1 FY23 H1 FY24 H1 FY22 H1 FY23 H1 FY24 H1 FY22 H1 FY23 H1 FY24 Revenue: Normalised EBITDA: Normalised NP
Slide 12: H1 FY24 Group Results Overview (cont.)
H1 FY24 GROUP RESULTS OVERVIEW (cont.) Statutory Earnings Net Profit after Tax >100% Significant Items: H1 FY24 H1 FY23 $’million $’million $9.1m Impairment of Sydney Property - 988.4 Debt refinancing costs 23.4 - Regulatory, fines, penalties, duty, legal 17.9 384.4 and other costs ($74.2m) Accounti
Slide 13: The Star Sydney Results Overview
THE STAR SYDNEY RESULTS OVERVIEW NORMALISED RESULTS H1 FY24 H1 FY23 Variance Revenue: $’million $’million % • Gaming revenue now reflecting implementation of necessary uplifted Revenue control environment: » Higher rates of exclusions EGMs 153.3 182.2 q 15.9% » Impact of time play management of patr
Slide 14: The Star Gold Coast Results Overview
THE STAR GOLD COAST RESULTS OVERVIEW NORMALISED RESULTS H1 FY24 H1 FY23 Variance Revenue: $’million $’million % • Total revenue impacted Gold Coast market normalising after the post- Revenue Covid domestic travel surge, with domestic consumers now returning to international travel - resulting in a d
Slide 15: Treasury Brisbane Results Overview
TREASURY BRISBANE RESULTS OVERVIEW NORMALISED RESULTS H1 FY24 H1 FY23 Variance Revenue: $’million $’million % • Gaming revenue now reflecting implementation of necessary uplifted Revenue control environment: » Higher rates of exclusions EGMs 91.9 102.6 q 10.4% » Impact of time play management of pat
Slide 16: Group Financial Results
GROUP FINANCIAL RESULTS Profit and Loss - H1 FY24 Balance Sheet - at 31 December 2023 Sources and Uses of Funds - H1 FY24 Debt Maturity Profile - at 31 December 2023 Group Capex Profile + JV Contributions 15 The Darling Hotel Star Sydney
Slide 17: H1 FY24 - Group Profit and Loss
H1 FY24 - GROUP PROFIT AND LOSS H1 FY24 H1 FY23 Variance Expense analysis: $’million $’million % Revenue • Operating expenditure down 5.0% as a result of the ~$100 million annualised cost out program and reflecting: Domestic gaming revenue 683.3 820.2 q 16.7% - Employee costs of $357.7 million - dow
Slide 18: H1 FY24 - Group Balance Sheet
H1 FY24 - GROUP BALANCE SHEET 31 Dec 2023 30 Jun 2023 Variance Balance sheet analysis: $’million $’million % Cash and cash equivalents 436.3 88.7 p >100.0% • Cash and cash equivalents increased as a result of the capital raising Trade and other receivables 27.7 20.8 p 33.2% of $750 million and debt
Slide 19: Sources and Uses of Funds - H1 FY24
SOURCES AND USES OF FUNDS - H1 FY24 $350m $300m $250m $132.0m ($33.6m) ($32.4m) $200m $55.9m $171.1m $150m $750.0m ($80.0m) ($15.4m) $318.0m $100m ($10.2m) $50m $19.1m $0 ($50m) ($100m) ($150m) ($318.0m) ($200m) ($250m) ($300m) ($350m) ($400m) ($450m) ($500m) ($550m) ($595.5m) ($600m) Opening Net Ca
Slide 20: H1 FY24 - Group Debt Maturity Profile
H1 FY24 - GROUP DEBT MATURITY PROFILE Debt Maturity Profile at 31 December 2023 Overview of New Debt Profile Term loan Revolving credit facility - undrawn New debt facilities secured - all previous existing debt cancelled $500m • Previous existing debt facilities cancelled - replaced with $450 milli
Slide 21: H1 FY24 - Group Capex Profile + JV Contributions
H1 FY24 - GROUP CAPEX PROFILE + JV CONTRIBUTIONS Group Capex - FY14 to FY241 $500m Historical Capex $477m Forecast Capex Depreciation and Amortisation $420m $400m • H1 FY24 capex of $33.6 million - significantly below Depreciation and Amortisation of $62 million $320m • FY24 capex guidance revised t
Slide 22: Trading Update + Looking Forward
TRADING UPDATE + LOOKING FORWARD H2 FY24 Trading Update Key Priorities for H2 FY24 Major Project Update - Queen’s Wharf Brisbane Major Project Update - Gold Coast Queen’s Wharf Brisbane - Sky Deck 21 Concept image for illustration purposes only
Slide 23: Trading Update
TRADING UPDATE EBITDA - 1 January 2024 to 31 January 2024 • Early H2 FY24 revenue is broadly consistent with the first half and only slightly softer to the pcp • In the period 1 January 2024 to 31 January 2024: Group EBITDA The Star Sydney The Star Gold Coast Treasury Brisbane » Group EBITDA is down
Slide 24: Trading Update (cont.)
TRADING UPDATE (cont.) GROUP NORMALISED RESULTS1 Q4 FY23 Jul-Oct 2023 2 H1 FY243 Jan 20244 Monthly Ave. Monthly Ave. Monthly Ave. Monthly total • Further to the trading update provided at the 2023 AGM $’million $’million $’million $’million on 9 November 2023, FY24 YTD to 31 January 2024 earnings re
Slide 25: Key Priorities for H2 FY24
KEY PRIORITIES FOR H2 FY24 • Key focus on delivery of Remediation Plan with a drive to achieve milestones as rapidly as possible without compromising quality - noting ultimately it will be for the relevant regulator in each jurisdiction to make its own assessment on the adequacy of the completion of
Slide 26: Major Project Update - Queen's Wharf Brisbane
MAJOR PROJECT UPDATE - QUEEN’S WHARF BRISBANE • Multi-billion dollar Queen’s Wharf Brisbane (50% owned by The Star) to open progressively from August 2024 • Destination Brisbane Consortium settled all outstanding litigation with Multiplex • Significant milestones achieved in H1 FY24 include: » Final
Slide 27: Major Project Update - Queen's Wharf Brisbane (cont.)
MAJOR PROJECT UPDATE - QUEEN’S WHARF BRISBANE (cont.) • Queen’s Wharf Brisbane phase 1 opening from August 2024 will include: » Sky Deck – open to the public 24/7 and boasting three venues - two restaurants (Aloria and Babblers) and one bar (Ciccada Blu) » Events Centre - including Brisbane’s larges
Slide 28: Major Project Update - Gold Coast Resort
MAJOR PROJECT UPDATE - GOLD COAST RESORT • Targeting an opening in FY25 with all apartments pre-sold • Construction is up to level 42 • Received Green Star performance ratings • Capital works funded by partner contributions • Upon completion of Tower 2, The Star Gold Coast will have in excess of 2,0
Slide 29: H1 FY24 - Q&A
H1 FY24 - Q&A Queen’s Wharf Brisbane Concept image for illustration purposes only 28
Slide 30: Supplementary Information
THE STAR ENTERTAINMENT GROUP H1 FY 24 RESULTS PRESENTATION SUPPLEMENTARY INFORMATION Queen’s Wharf Brisbane 29 Concept image for illustration purposes only
Slide 31: Appendix - Portfolio of Premium Properties
APPENDIX - PORTFOLIO OF PREMIUM PROPERTIES The Star Sydney The Star Gold Coast Queen’s Wharf Brisbane Treasury Brisbane Year opened 1997 1985 August 2024 1995 99 Years Perpetual Licence 99 Years from Opening 99 Years Gaming licence1 (Currently suspended - held by Special (Deferred suspension until 3
Slide 32: Appendix - Normalised Results by Property
APPENDIX - NORMALISED RESULTS BY PROPERTY The Star Sydney The Star Gold Coast Treasury Brisbane The Star Entertainment Group H1 FY24 H1 FY23 Variance H1 FY24 H1 FY23 Variance H1 FY24 H1 FY23 Variance H1 FY24 H1 FY23 Variance $’m $’m % $’m $’m % $’m $’m % $’m $’m % EGM revenue 153.3 182.2 (15.9%) 105
Slide 33: Appendix - Operational Metrics by Property
APPENDIX - OPERATIONAL METRICS BY PROPERTY The Star Sydney The Star Gold Coast Treasury Brisbane H1 FY24 H1 FY23 Variance H1 FY24 H1 FY23 Variance H1 FY24 H1 FY23 Variance EGMs Revenue ($m) 153 182 (15.9%) 105 124 (15.1%) 92 103 (10.4%) NMR/machine/day ($) 557 666 (16.4%) 399 477 (16.4%) 372 411 (9.
Slide 34: Appendix - Sustainability
APPENDIX - SUSTAINABILITY RESPONSIBLE BUSINESS, SUSTAINABLE DESTINATIONS SUSTAINABILITY STRATEGY ENVIRONMENT RESPONSIBILITY PEOPLE Create low carbon places Lead with integrity to ensure Foster well-being and that support nature and safer gambling, sustainable enhance communities, conserve resources
Slide 35: Appendix - Glossary of Terms
APPENDIX - GLOSSARY OF TERMS Term Definition AML/CTF Anti-Money Laundering and Counter-Terrorism Financing AUSTRAC Australian Transaction Reports and Analysis Centre CAGR Compound Annual Growth Rate Capital expenditure (capex) Unless otherwise stated, capital expenditure is presented on an accruals
Slide 36: Disclaimer
DISCLAIMER This presentation (Presentation) contains summary information about the current activities of The Star Entertainment Group and its subsidiaries (The Star or the Group). It should be read in conjunction with the Group’s other periodic and continuous disclosure announcements lodged with the
Slide 37: The Star Entertainment Group Investor Relations Contact
The Star Entertainment Group Investor Relations Contact: Giovanni Rizzo, General Manager Social Responsibility and Investor Relations (E) giovanni.rizzo@star.com.au (P) +61 4 397 775 030 (W) https://www.starentertainmentgroup.com. au/investor-centre/ 36
Star Entertainment Group — H1 FY24 Earnings Presentation on 6ix