Star Entertainment Group Limited · ASX:SGR
Star Entertainment — The Star Entertainment Group — FY2016 Earnings Presentation
34 slides from Star Entertainment's earnings presentation, Aug 26, 2016
Slide 1: Full Year Results Presentation ASX Announcement
ASX Announcement For personal use only 26 August 2016 FULL YEAR RESULTS PRESENTATION Attached is the presentation regarding the financial results of The Star Entertainment Group Limited (The Star Entertainment Group) for the year ended 30 June 2016, to be presented by Matt Bekier, Managing Director
Slide 2: 2016 Results Presentation
For personal use only THE STAR ENTERTAINMENT GROUP 2016 RESULTS PRESENTATION FRIDAY 26 AUGUST 2016
Slide 3: Basis of Preparation and Non-IFRS Information
THE STAR ENTERTAINMENT GROUP THE STAR ENTERTAINMENT GROUP LIMITED (ASX: SGR) BASIS OF PREPARATION AND NON-IFRS INFORMATION For personal use only ♦ Information in this presentation is provided as at the date of the presentation unless specified otherwise. It should be read in conjunction with The Sta
Slide 4: Agenda
THE STAR ENTERTAINMENT GROUP AGENDA For personal use only 1. OVERVIEW MATT BEKIER – CEO 2. FINANCIALS CHAD BARTON – CFO 3. OUTLOOK AND PRIORITIES MATT BEKIER – CEO 4. Q&A 3
Slide 5: Highlights Full Year 2016 Results
HIGHLIGHTS FULL YEAR 2016 RESULTS Good performance across ♦ Group domestic revenues up 5.8% on pcp For personal use only all key operating • Domestic Tables revenue up 8.0% fundamentals • Slots revenue up 5.2% • Non-Gaming cash revenue flat despite capital works ♦ International VIP Rebate business v
Slide 6: Good Progress Made During FY2016 on All Priorities
OVERVIEW GOOD PROGRESS MADE DURING FY2016 ON ALL PRIORITIES For personal use only Operational ♦ Overall guest satisfaction scores increased ♦ Rebranding of the Group and The Star Sydney completed, with The Star Gold Coast scheduled for 2H FY2017 ♦ Expenses remain well controlled People ♦ Staff engag
Slide 7: Key Drivers of Full Year 2016 Results
OVERVIEW KEY DRIVERS OF FULL YEAR 2016 RESULTS ($m) For personal use only 700 44.7 29.4 +14.1% on pcp 38.8 600 13.7 78.6 556.2 67.4 +7.5% on pcp 32.8 487.4 488.8 500 454.6 400 300 200 100 0 FY2015 International FY2015 The Star Queensland International Gaming taxes, Operating FY2016 International FY2
Slide 8: Key Drivers – The Star Sydney
OVERVIEW KEY DRIVERS – THE STAR SYDNEY Normalised gross revenue of $1,743m, up 8.6% versus pcp (actual gross revenue of $1,657m, up 7.5% on For personal use only pcp). Normalised EBITDA of $382m, up 17.4% (actual EBITDA of $302m, up 13.0% on pcp) ♦ Good revenue growth across all lines of business –
Slide 9: Key Drivers – Queensland
OVERVIEW KEY DRIVERS – QUEENSLAND Normalised gross revenue of $687m, down 0.2% versus pcp (actual gross revenue of $701m, down 2.2%). For personal use only Normalised EBITDA of $174m, up 7.5% (actual EBITDA of $186m, down 0.3%) ♦ Solid revenue growth across domestic gaming despite capital works disr
Slide 10: EGM Market Share
OVERVIEW EGM MARKET SHARE ♦ Group EGM market share remained steady for The Star Sydney For personal use only 10% FY2016 ♦ Benefits from enhancements to properties, 9% continued traction of the loyalty program and 8% targeted marketing campaigns and jackpot strategy offset by disruption from capital
Slide 11: Key Drivers – International VIP Rebate Business
OVERVIEW KEY DRIVERS – INTERNATIONAL VIP REBATE BUSINESS ♦ Continued growth in International VIP Rebate business turnover, up 7.0% versus pcp to $49.5bn, with 5 For personal use only year turnover CAGR of 23.4% ♦ Normalised gross revenue of $670m, up 7.2% (actual gross revenue of $596m up 1.3%) vers
Slide 12: Agenda
THE STAR ENTERTAINMENT GROUP AGENDA For personal use only 1. OVERVIEW MATT BEKIER – CEO 2. FINANCIALS CHAD BARTON – CFO 3. OUTLOOK AND PRIORITIES MATT BEKIER – CEO 4. Q&A 11
Slide 13: Profit and Loss
FINANCIALS PROFIT AND LOSS FY2015 FY2016 Growth FY2015 FY2016 Growth ($m) Fav/(unfav) Fav/(unfav) For personal use only 2 2 2 2 Actual Actual % Normalised Normalised % Domestic Gaming Revenue 1,418.1 1,514.8 96.8 6.8% 1,418.1 1,514.8 96.8 6.8% International VIP Rebate (Gross) 588.4 596.3 7.8 1.3% 62
Slide 14: Balance Sheet
FINANCIALS BALANCE SHEET ($m) June 2015 June 2016 ♦ Cash conversion of EBITDA 98% (112% in FY2015) For personal use only ASSETS ♦ Trade and other receivables of $130m up $20m on Current Assets Cash and cash equivalents 196.6 159.0 30 June 2015 reflecting strong activity in the Trade and other receiv
Slide 15: Balance Sheet and Funding
FINANCIALS BALANCE SHEET AND FUNDING ♦ FY2016 net debt of $474m ($400m at 30 June Net Debt Calculation ($m) For personal use only 2015) Assets ♦ Gearing levels remain conservative at 1.0 times Cash and cash equivalents 159 FY2016 Net Debt/ Actual EBITDA Current derivative financial instruments 14 ♦
Slide 16: Capital Expenditure
FINANCIALS CAPITAL EXPENDITURE ♦ FY2016 capital expenditure of $306m, in line with prior guidance – $82m for maintenance, $224m to For personal use only execute expansion plans at The Star Sydney and the Gold Coast ♦ FY2017 capital expenditure expected to be between $375m – $425m, excluding expected
Slide 17: Capital Expenditure Projects
FINANCIALS CAPITAL EXPENDITURE PROJECTS ♦ FY2016 capital expenditure projects at both The Star Sydney and the Gold Coast progressing slightly For personal use only slower than management’s initial expectations but within budget ♦ A number of capital expenditure projects underway in 2H FY2016 and con
Slide 18: Key Metrics
FINANCIALS KEY METRICS Actual Gross Revenue ($m) Dividend Per Share (cents) For personal use only CAGR 8.7% CAGR 34.3% 2,500 14.0 2,000 12.0 10.0 1,500 8.0 2,258 2,358 6.0 13.0 1,000 1,847 1,897 11.0 1,689 4.0 8.0 500 6.0 2.0 4.0 0 0.0 FY2012 FY2013 FY2014 FY2015 FY2016 FY2012 FY2013 FY2014 FY2015 F
Slide 19: Agenda
THE STAR ENTERTAINMENT GROUP AGENDA For personal use only 1. OVERVIEW MATT BEKIER – CEO 2. FINANCIALS CHAD BARTON – CFO 3. OUTLOOK AND PRIORITIES MATT BEKIER – CEO 4. Q&A 18
Slide 20: FY2017 Priorities and Trading Update
OUTLOOK AND PRIORITIES FY2017 PRIORITIES AND TRADING UPDATE ♦ Priorities for FY2017 focused on enhancing long-term growth and shareholder value For personal use only 1. Improve earnings across the Group through continued focus on operations and efficiency 2. Deliver on the next stage of the capital
Slide 21: Properties and Capital Projects Overview
OUTLOOK AND PRIORITIES PROPERTIES AND CAPITAL PROJECTS OVERVIEW For personal use only The Star Sydney Gold Coast Queen’s Wharf Brisbane ♦ Expand to ~1,000 premium ♦ Expand to ~1,400 premium ♦ ~1,100 premium hotel rooms hotel rooms and residences hotel rooms and residences over 5 brands ♦ Over 50 foo
Slide 22: The Star Sydney Development
OUTLOOK AND PRIORITIES THE STAR SYDNEY DEVELOPMENT ♦ Up to $1bn investment previously disclosed including additional Capex estimates The Star Share For personal use only proposed tower announced at 1H FY2016 results ($m) (%) ($m) ♦ Scale of property to be expanded to ~1,000 hotel rooms and Previousl
Slide 23: Gold Coast Development and Masterplan
OUTLOOK AND PRIORITIES GOLD COAST DEVELOPMENT AND MASTERPLAN ♦ $845m investment previously disclosed with additional proposed Capex estimates The Star Share For personal use only investments announced at 1H FY2016 results ($m) (%) ($m) ♦ Scale of property to be expanded to approximately 1,400 hotel
Slide 24: Queen's Wharf Brisbane
OUTLOOK AND PRIORITIES QUEEN’S WHARF BRISBANE ♦ Expected budget for the Integrated Resort of around For personal use only $2bn, The Star’s share of capex around $1bn (excluding Treasury repurposing and DBC partners’ residential developments) ♦ Long-dated casino licence with attractive terms and join
Slide 25: Agenda
THE STAR ENTERTAINMENT GROUP AGENDA For personal use only 1. OVERVIEW MATT BEKIER – CEO 2. FINANCIALS CHAD BARTON – CFO 3. OUTLOOK AND PRIORITIES MATT BEKIER – CEO 4. Q&A 24
Slide 26: Appendix
THE STAR ENTERTAINMENT GROUP APPENDIX The Star and Queensland Results – Actual 26 For personal use only The Star and Queensland results – Normalised 27 International VIP Rebate Business Normalisation 28 Operational Benchmarks 30 Cash Collection Ratio 31 International VIP Rebate Business Receivables
Slide 27: The Star and Queensland Results - Actual
APPENDIX THE STAR AND QUEENSLAND RESULTS - ACTUAL ($m) The Star Sydney Queensland Casinos Total For personal use only fav/ fav/ fav/ fav/ fav/ fav/ FY2015 FY2016 FY2015 FY2016 FY2015 FY2016 (unfav) (unfav) (unfav) (unfav) (unfav) (unfav) Slots 289.0 312.9 23.9 8.3% 310.3 317.6 7.3 2.4% 599.3 630.5 3
Slide 28: The Star and Queensland Results - Normalised
APPENDIX THE STAR AND QUEENSLAND RESULTS - NORMALISED ($m) The Star Sydney Queensland Casinos Total For personal use only fav/ fav/ fav/ fav/ fav/ fav/ FY2015 FY2016 FY2015 FY2016 FY2015 FY2016 (unfav) (unfav) (unfav) (unfav) (unfav) (unfav) Slots 289.0 312.9 23.9 8.3% 310.3 317.6 7.3 2.4% 599.3 630
Slide 29: International VIP Rebate Business Normalisation
APPENDIX INTERNATIONAL VIP REBATE BUSINESS NORMALISATION ♦ FY2015 normalised International VIP Rebate business win rate of 1.43% was based on the historical For personal use only average win rate ♦ As disclosed at the 1H FY2016 results, the normalised win rate has been adjusted down to 1.35% for the
Slide 30: International VIP Rebate Business Normalisation
APPENDIX INTERNATIONAL VIP REBATE BUSINESS NORMALISATION FY2016 FY2016 Change vs Change vs FY2016 Results Comparison ($m) FY2016 Norm Norm For personal use only Actual Actual @1.35% @1.43% Total Domestic 1,755.1 1,755.1 1,755.1 International VIP Rebate (Gross) 596.3 73.3 669.5 112.9 709.1 Other Reve
Slide 31: Operational Benchmarks
APPENDIX OPERATIONAL BENCHMARKS The Star The Star QLD QLD ♦ Electronic gaming volume growth strong at The Operational Benchmarks Sydney Sydney Casinos Casinos For personal use only FY2015 FY2016 FY2015 FY2016 Star Sydney – Slots +8.3% and MTGMs +11.9% (+56 units on average in FY2016 vs pcp) Slots Re
Slide 32: Cash Conversion
APPENDIX CASH CONVERSION Category Jun-15 Jun-16 For personal use only ($m) Cash flows from operating activities before interest and income tax Net cash receipts in the course of operations 2,174.5 2,287.6 Payments to suppliers, service providers and employees (1,202.4) (1,307.7) Payment of governmen
Slide 33: International VIP Rebate Business Receivables
APPENDIX INTERNATIONAL VIP REBATE BUSINESS RECEIVABLES International VIP Rebate Business Receivables 30 days 0 - 30 days 1 - 3 years 3 years + Total For personal use only (Before provisions) - 1 year June 2016 ($m) Not yet due 77.2 0.0 0.0 0.0 77.2 Past due not impaired 0.0 31.5 1.7 0.0 33.2 Conside
Slide 34: Glossary
APPENDIX GLOSSARY Term Definition For personal use only CAGR Compound Annual Growth Rate Capital expenditure (capex) Unless otherwise stated, capital expenditure is presented on an accruals basis and excludes investments in associates and equity acquisitions D&A Depreciation and Amortisation DBC Des
The Star Entertainment Group — FY2016 Earnings Presentation on 6ix