Star Entertainment Group Limited · ASX:SGR
Star Entertainment — The Star Entertainment Group — H1 FY2017 Earnings Presentation
35 slides from Star Entertainment's earnings presentation, Feb 16, 2017
Slide 1: ASX Announcement: Half Year Results Presentation
ASX Announcement For personal use only 16 February 2017 HALF YEAR RESULTS PRESENTATION Attached is the presentation regarding the financial results of The Star Entertainment Group Limited (The Star Entertainment Group) for the half year ended 31 December 2016, to be presented by Matt Bekier, Managin
Slide 2: Half Year 2017 Results Presentation
For personal use only THE STAR ENTERTAINMENT GROUP HALF YEAR 2017 RESULTS PRESENTATION THURSDAY 16 FEBRUARY 2017
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: Half Year 2017 Highlights
OVERVIEW HALF YEAR 2017 HIGHLIGHTS Strong actual results ♦ Group statutory revenue of $1,230m, up 11.1% on pcp (normalised $1,174m, down For personal use only 3.7%) ♦ Group statutory EBITDA of $300m, up 55.9% on pcp (normalised $251m, down 14.5%) ♦ Group statutory NPAT of $142m, up 135.2% on pcp ($1
Slide 6: Key Drivers of Half Year 2017 Results
OVERVIEW KEY DRIVERS OF HALF YEAR 2017 RESULTS $m For personal use only +55.9% 350 on pcp 2.9 49.8 300.4 100.4 293.0 12.1 -14.5% 300 35.9 on pcp 16.6 13.9 250.6 250 192.6 200 150 100 50 0 1H FY2016 International 1H FY2016 Sydney Queensland International Gaming taxes, Operating 1H FY2017 Internationa
Slide 7: Key Drivers – Sydney
OVERVIEW KEY DRIVERS – SYDNEY Statutory gross revenue of $840m, up 13.9% on pcp (normalised gross revenue of $804m, down 7.2% vs pcp). Statutory For personal use only EBITDA of $188m, up 107.5% on pcp (normalised EBITDA of $156m, down 24.4%) ♦ Domestic revenue impacted by disruption from capital wor
Slide 8: Key Drivers – Queensland
OVERVIEW KEY DRIVERS – QUEENSLAND Statutory gross revenue of $390m, up 5.4% (normalised gross revenue of $370m, up 5.0% vs pcp). Statutory EBITDA of $112m, For personal use only up 10.0% (normalised EBITDA of $94m, up 9.5%) ♦ Domestic gaming revenues impacted by recently completed capital works at t
Slide 9: EGM Market Share
OVERVIEW EGM MARKET SHARE ♦ Group EGM market share declined due Sydney Sydney - Rolling 12 Month Average For personal use only to disruption and increased free play 10% 10% due to relaunch of loyalty program creating a temporary lift in redemptions 9% 9% ♦ Sydney market share of 8.8% for Q1 8% 8% FY
Slide 10: Key Drivers – International VIP Rebate Business
OVERVIEW KEY DRIVERS – INTERNATIONAL VIP REBATE BUSINESS ♦ International VIP Rebate business front money International VIP Rebate Business Front Money $m For personal use only increased 4.4% on pcp, with turnover of $20.8bn 2,500 down 11.9% on pcp. The high actual win rate CAGR 17.9% 2,000 impacted
Slide 11: 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 10
Slide 12: Profit and Loss
FINANCIALS PROFIT AND LOSS $m 1H FY2016 1H FY2017 Growth 1H FY2016 1H FY2017 Growth 2 2 Statutory Statutory Fav/(unfav) % Normalised Normalised Fav/(unfav) % For personal use only Domestic Gaming Revenue 768.2 763.1 ( 5.1) (0.7%) 768.2 763.1 ( 5.1) (0.7%) International VIP Rebate (Gross) 207.5 339.4
Slide 13: Balance Sheet
FINANCIALS BALANCE SHEET $m December 2015 June 2016 December 2016 ♦ Cash conversion of EBITDA at 96% (99% in 1H ASSETS For personal use only Current Assets FY2016) Cash and cash equivalents 146.8 159.0 195.7 ♦ Increase in cash and cash equivalents vs 31 Trade and other receivables 128.3 130.3 102.2
Slide 14: Balance Sheet and Funding
FINANCIALS BALANCE SHEET AND FUNDING ♦ 31 December 2016 Net Debt of $670m ($474m at 30 June Net Debt Calculation $m For personal use only 2016) ♦ Gearing levels remain conservative at 1.1 times 31 Assets December 2016 Net Debt/ Statutory 12 month trailing Cash and cash equivalents 196 EBITDA Current
Slide 15: Capital Expenditure
FINANCIALS CAPITAL EXPENDITURE ♦ 1H FY2017 capital expenditure of $216m ($158m growth and $58m maintenance), up $58m on pcp due to the Astral Tower & For personal use only Residences refurbishment and the North West MGF expansion in Sydney, the Gold Coast Hotel and Atrium refurbishment and new all s
Slide 16: Key Metrics
FINANCIALS KEY METRICS For personal use only Note: EBIT/ Net Interest Expenses ratio and Gearing based on 12 month trailing statutory Earnings Per Share (EPS) calculated on the basis of weighted average number of shares of 825.7m 2HFY2012 Gearing after adjusting for significant items and for cash an
Slide 17: 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 16
Slide 18: 2H FY2017 Priorities and Trading Update
OUTLOOK AND PRIORITIES 2H FY2017 PRIORITIES AND TRADING UPDATE ♦ Priorities for 2H FY2017 remain focused on executing previously disclosed long-term strategy: For personal use only 1. Improve earnings across the Group through continued focus on operations and efficiency 2. Deliver on the next stage
Slide 19: Properties and Capital Projects Update
OUTLOOK AND PRIORITIES PROPERTIES AND CAPITAL PROJECTS UPDATE For personal use only Concept image only Concept image only Concept image only SYDNEY GOLD COAST QUEEN’S WHARF BRISBANE COMPLETED 1H 2017 COMPLETED 1H 2017 2H 2017 PRIORITIES ♦ MGF refresh, Vantage and ♦ MGF refresh ♦ Enabling works Latit
Slide 20: Sydney Development
OUTLOOK AND PRIORITIES SYDNEY DEVELOPMENT ♦ Up to $1bn planned investment to expand property to For personal use only include ~1,000 premium hotel rooms and residences (including The Ritz-Carlton), around 50 F&B offerings, signature gaming offerings, Lyric theatre, multi-use event centre ♦ Plan to s
Slide 21: Sydney – Completed Projects
OUTLOOK AND PRIORITIES SYDNEY – COMPLETED PROJECTS For personal use only New Poker Area Astral Tower Refurbishment Vantage Outdoor Area Latitude Bar Latitude Bar 20
Slide 22: Gold Coast Development and Masterplan
OUTLOOK AND PRIORITIES GOLD COAST DEVELOPMENT AND MASTERPLAN ♦ $845m planned investment to expand property to For personal use only include ~1,400 premium hotel rooms and residences, over 20 F&B offerings, signature gaming facilities, new resort facilities and retail outlets ♦ Detailed planning for
Slide 23: Gold Coast – Completed Projects
OUTLOOK AND PRIORITIES GOLD COAST – COMPLETED PROJECTS For personal use only Refurbished Suite Hotel reception Mei Wei Dumplings Hotel lobby lounge 22
Slide 24: Queen's Wharf Brisbane
OUTLOOK AND PRIORITIES QUEEN’S WHARF BRISBANE ♦ Expected $2bn budget for Integrated Resort, excluding For personal use only Treasury repurposing and DBC partners’ residential developments ♦ Full resort precinct comprises ~1,100 premium hotel rooms over 5 brands (including The Ritz-Carlton), over 50
Slide 25: Sheraton Grand Mirage Gold Coast
OUTLOOK AND PRIORITIES SHERATON GRAND MIRAGE GOLD COAST ♦ The Star completed the acquisition of The Sheraton Grand For personal use only Mirage in January 2017 in partnership with CTF and FEC. Equity investment of ~$40m for The Star’s 50% interest ♦ Only beachfront resort on the Gold Coast, with 295
Slide 26: 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 25
Slide 27: Appendix
THE STAR ENTERTAINMENT GROUP APPENDIX Sydney and Queensland Results – Statutory 27 For personal use only Sydney and Queensland Results – Normalised 28 International VIP Rebate Business Normalisation 29 Operational Benchmarks 31 Cash Collection Ratio 32 International VIP Rebate Business Receivables 3
Slide 28: Sydney and Queensland Results – Statutory
APPENDIX SYDNEY AND QUEENSLAND RESULTS – STATUTORY For personal use only Sydney Queensland Total fav/ fav/ fav/ fav/ fav/ fav/ $m HY2016 HY2017 HY2016 HY2017 HY2016 HY2017 (unfav) (unfav) (unfav) (unfav) (unfav) (unfav) Slots 159.8 155.6 ( 4.2) (2.6%) 163.7 157.7 ( 6.0) (3.7%) 323.5 313.3 ( 10.2) (3
Slide 29: Sydney and Queensland Results – Normalised
APPENDIX SYDNEY AND QUEENSLAND RESULTS – NORMALISED For personal use only Sydney Queensland Total fav/ fav/ fav/ fav/ fav/ fav/ $m HY2016 HY2017 HY2016 HY2017 HY2016 HY2017 (unfav) (unfav) (unfav) (unfav) (unfav) (unfav) Slots 159.8 155.6 ( 4.2) (2.6%) 163.7 157.7 ( 6.0) (3.7%) 323.5 313.3 ( 10.2) (
Slide 30: International VIP Rebate Business Normalisation
APPENDIX INTERNATIONAL VIP REBATE BUSINESS NORMALISATION ♦ Normalised win rate of 1.35% is in line with the Group’s win rate experience and consistent with the Australia and New For personal use only Zealand market practice ♦ 1H FY2017 win rate of 1.62% excludes the Premium Mass business (1.64% incl
Slide 31: International VIP Rebate Business Normalisation
APPENDIX INTERNATIONAL VIP REBATE BUSINESS NORMALISATION Change vs 1H FY2017 1H Results Com parison ($m ) 1H FY2017 For personal use only Statutory Norm @1.35% Total Domestic 887.7 887.7 International VIP Rebate (Gross) 339.4 ( 56.3) 283.1 Other Revenue 3.1 3.1 Total Gross Revenue 1,230.2 ( 56.3) 1,
Slide 32: Operational Benchmarks
APPENDIX OPERATIONAL BENCHMARKS Sydney Queensland ♦ NMR per day at all three properties were impacted by Operational Benchmarks For personal use only 1H FY2016 1H FY2017 1H FY2016 1H FY2017 lower hold rates and increased free play due to Slots relaunch of loyalty program. Sydney and Gold Coast Reven
Slide 33: Cash Conversion
APPENDIX CASH CONVERSION Category Dec-15 Dec-16 For personal use only $m Cash flow s from operating activities before interest and incom e tax Net cash receipts from customers (inclusive of GST) 1,097.5 1,216.1 Payments to suppliers and employees (inclusive of GST) (645.4) (655.6) Payment of governm
Slide 34: International VIP Rebate Business Receivables
APPENDIX INTERNATIONAL VIP REBATE BUSINESS RECEIVABLES International VIP Rebate Business Receivables 30 days 0 - 30 days 1 - 3 years 3 years + Total For personal use only (Before provisions) - 1 year Decem ber 2016 ($m ) Not yet due 51.0 0.0 0.0 0.0 51.0 Past due not impaired 0.0 26.9 2.5 0.0 29.4 C
Slide 35: 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
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