Star Entertainment Group Limited · ASX:SGR
Star Entertainment — The Star Entertainment Group — FY2017 Earnings Presentation
39 slides from Star Entertainment's earnings presentation, Aug 23, 2017
Slide 1: Full Year Results Presentation ASX Announcement
ASX Announcement For personal use only 23 August 2017 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 2017, to be presented by Matt Bekier, Managing Director
Slide 2: 2017 Results Presentation
For personal use only THE STAR ENTERTAINMENT GROUP 2017 RESULTS PRESENTATION WEDNESDAY 23 AUGUST 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: 2017 Highlights
OVERVIEW 2017 HIGHLIGHTS STRONG STATUTORY RESULTS * ♦ Statutory revenue of $2,432m, up 3.2% on pcp (normalised $2,337m, down 3.9%) For personal use only ♦ Statutory EBITDA of $586m, up 19.9% on pcp (normalised $515m, down 7.4%) ♦ Statutory NPAT of $264m, up 36.0% on pcp (normalised $214m, down 11.1%
Slide 6: Key Drivers of 2017 Results
OVERVIEW KEY DRIVERS OF 2017 RESULTS $m For personal use only 700 +19.9% on pcp 84.6 13.5 36.1 5.0 124.8 -7.4% 586.2 600 556.2 67.4 on pcp 62.4 9.8 515.1 488.8 500 400 300 200 100 0 FY2016 International FY2016 Sydney Queensland International Gaming taxes, Operating FY2017 International Significant F
Slide 7: Key Drivers – Sydney
OVERVIEW KEY DRIVERS – SYDNEY Statutory gross revenue of $1,686m, up 1.8% on pcp ($1,596m normalised, down 8.5% on pcp). EBITDA (excluding significant For personal use only items) of $401m, up 32.6% on pcp ($321m normalised*, down 16.0%) ♦ Domestic revenue growth of 0.6% on pcp in 1H FY2017 impacted
Slide 8: Key Drivers – Queensland
OVERVIEW KEY DRIVERS – QUEENSLAND Statutory gross revenue of $746m, up 6.5% ($742m normalised, up 7.9% on pcp). EBITDA (excluding significant items) of For personal use only $199m, up 6.6% ($194m normalised*, up 11.5%) ♦ Domestic revenue down 0.8% on pcp. Solid performance at Gold Coast as disruptio
Slide 9: Key Drivers – Gold Coast Refurbishment
OVERVIEW KEY DRIVERS – GOLD COAST REFURBISHMENT Gold Coast revenue performance in FY2017 reflected disruption from capital works in 1H FY2017, with new and refurbished For personal use only assets commissioned at end 1H FY2017 driving growth in 2H FY2017 ♦ 2H FY2017 total domestic revenue growth of
Slide 10: EGM Market Share
OVERVIEW EGM MARKET SHARE ♦ Sydney increased market share to Sydney Sydney (Half Year) 10% 10% For personal use only 9.6% in 3Q FY2017 as disruption eased, slot machines availability 9% 9% returned and gaming and non- gaming investments were 8% 8% completed 7% 7% 1-3Q 2016 1-3Q 2017 1H 2H 1H 2H 1H 2
Slide 11: Loyalty
OVERVIEW LOYALTY ♦ Relaunched loyalty program showing positive initial signs For personal use only ♦ Member perception improving since relaunch in November 2016 ♦ Group PGR revenues up 13.3% in 2H FY2017 on pcp, outperforming MGF revenues • Group PGR revenue growth higher in 2H FY2017 than in 1H FY2
Slide 12: Key Drivers – International VIP Rebate Business
OVERVIEW KEY DRIVERS – INTERNATIONAL VIP REBATE BUSINESS ♦ Diversification strategy enabled front money growth in FY2017 on International VIP Rebate Business Front Money ($m) For personal use only pcp despite disruption to the North Asia market. Front money of CAGR 13.4% 4,000 $3.5bn up 3.4% on pcp
Slide 13: 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 12
Slide 14: Profit and Loss
FINANCIALS PROFIT AND LOSS $m FY2017 FY2016 Growth FY2017 FY2016 Growth 2 2 Statutory Statutory Fav/(unfav) % Normalised Normalised Fav/(unfav) % For personal use only Domestic Gaming Revenue 1,544.6 1,514.8 29.8 2.0% 1,544.6 1,514.8 29.8 2.0% International VIP Rebate (Gross) 639.6 596.3 43.3 7.3% 5
Slide 15: Balance Sheet
FINANCIALS BALANCE SHEET $m June 2017 June 2016 ♦ Cash conversion of EBITDA at 97% (98% in FY2016) ASSETS For personal use only Current Assets ♦ Debt levels up but gearing remains conservative Cash and cash equivalents 113.7 159.0 Trade and other receivables 192.7 130.3 • FY2017 net debt of $787m, u
Slide 16: Funding
FINANCIALS FUNDING DEBT MATURITY PROFILE AT 30 JUNE 2017 RESTRUCTURE OF USPP For personal use only ♦ Undrawn bank facilities of $201m and average drawn debt ♦ SGR successfully restructured its USPP notes and related maturity of 2.3 years hedges in early 1H FY2018 to increase tenor and reduce ♦ Debt
Slide 17: Capital Expenditure
FINANCIALS CAPITAL EXPENDITURE ♦ FY2017 capital expenditure of $420m ($309m growth and $111m maintenance), up $114m on pcp due to capital works at For personal use only Sydney (Astral Tower & Residences refurbishment, North West MGF expansion) and the Gold Coast (Hotel and Atrium refurbishment, new
Slide 18: Key Metrics
FINANCIALS KEY METRICS Statutory Gross Revenue ($m) Normalised Gross Revenue ($m) Dividend Per Share (cents) For personal use only CAGR CAGR 2,500 3,000 20.0 CAGR 6.5% 27.8% 2,000 2,500 7.1% 15.0 2,000 1,500 1,500 10.0 1,000 1,000 500 5.0 500 - - - FY2013 FY2014 FY2015 FY2016 FY2017 FY2013 FY2014 FY
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: 2018 Priorities and Trading Update
OUTLOOK AND PRIORITIES 2018 PRIORITIES AND TRADING UPDATE ♦ FY2018 priorities are focused on executing previously disclosed long-term strategy: For personal use only 1. Improve earnings across the Group through continued focus on domestic gaming and operating efficiency 2. Deliver on the next stage
Slide 21: Destination Integrated Resorts Overview
OUTLOOK AND PRIORITIES DESTINATIONAL INTEGRATED RESORTS OVERVIEW THE STAR SYDNEY THE STAR GOLD COAST QUEEN’S WHARF BRISBANE For personal use only Concept image only Concept image only Concept image only Expand property to: Expand property to: Expected ~$2bn* budget for new ♦ ~1,000 premium hotel roo
Slide 22: Sydney – Developments
OUTLOOK AND PRIORITIES SYDNEY – DEVELOPMENTS ♦ Major FY2018 capital works projects in progress include: For personal use only • Completion of Astral Residences upgrade • Astral Lobby and Porte Cochere redevelopment • Enabling works for Sovereign Room expansion ♦ Longer term capital works projects in
Slide 23: Sydney – Works in Progress / Planning
OUTLOOK AND PRIORITIES SYDNEY – WORKS IN PROGRESS/ PLANNING For personal use only Porte Cochere – Concept Image Only The Ritz-Carlton Sky Lobby and Lounge – Concept Image Only Astral Lobby – Concept Image Only The Ritz-Carlton Porte Cochere and Lobby – Concept Image Only * Subject to planning and ot
Slide 24: Gold Coast – Developments and Masterplan
OUTLOOK AND PRIORITIES GOLD COAST – DEVELOPMENTS AND MASTERPLAN ♦ Major FY2018 capital works projects in progress include: For personal use only • Complete 6 star hotel with new PGR, extended MGF and new VIP salons (on track to open by April 2018 Commonwealth Games) • New F&B (Cherry Bar, Food Quart
Slide 25: Gold Coast – Works in Progress / Planning
OUTLOOK AND PRIORITIES GOLD COAST – WORKS IN PROGRESS/ PLANNING For personal use only Sports Bar & Terrace – Concept Image Only New JV Tower Apartment – Concept Image Only New JV Tower Pool– Concept Image Only Food Quarter – Concept Image Only * Subject to planning and other approvals 24
Slide 26: 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 ♦ Initial works (demolition and enabling) on schedule and on budget ♦ Design being refined in conjunction with
Slide 27: 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 26
Slide 28: Appendix
THE STAR ENTERTAINMENT GROUP APPENDIX Sydney and Queensland Results – Statutory 28 For personal use only Sydney and Queensland Results – Normalised 29 International VIP Rebate Business Normalisation 30 Net Debt and Interest Expense 32 Operational Benchmarks 33 Operating Efficiency 34 Cash Conversion
Slide 29: Sydney and Queensland Results – Statutory
APPENDIX SYDNEY AND QUEENSLAND RESULTS – STATUTORY Sydney Queensland Total fav/ fav/ fav/ fav/ fav/ For personal use only $m FY2017 FY2016 FY2017 FY2016 FY2017 FY2016 fav/ (unfav) (unfav) (unfav) (unfav) (unfav) (unfav) Slots 318.6 312.9 5.7 1.8% 308.8 317.6 ( 8.8) (2.8%) 627.4 630.5 ( 3.1) (0.5%) D
Slide 30: Sydney and Queensland Results – Normalised
APPENDIX SYDNEY AND QUEENSLAND RESULTS – NORMALISED Sydney Queensland Total fav/ fav/ fav/ fav/ fav/ For personal use only $m FY2017 FY2016 FY2017 FY2016 FY2017 FY2016 fav/ (unfav) (unfav) (unfav) (unfav) (unfav) (unfav) Slots 318.6 312.9 5.7 1.8% 308.8 317.6 ( 8.8) (2.8%) 627.4 630.5 ( 3.1) (0.5%)
Slide 31: International VIP Rebate Business Normalisation
APPENDIX INTERNATIONAL VIP REBATE BUSINESS NORMALISATION ♦ Normalised win rate of 1.35% is in line with the Group’s win rate experience and consistent with the Australia and New For personal use only Zealand market practice ♦ FY2017 win rate of 1.59% excludes the Premium Mass business (1.58% includi
Slide 32: International VIP Rebate Business Normalisation
APPENDIX INTERNATIONAL VIP REBATE BUSINESS NORMALISATION FY2017 Change vs For personal use only FY2017 Results Com parison ($m ) FY2017 Norm Statutory @1.35% Total Domestic 1,785.4 1,785.4 International VIP Rebate (Gross) 639.6 ( 94.9) 544.7 Other Revenue 7.2 7.2 Total Gross Revenue 2,432.2 ( 94.9)
Slide 33: Net Debt and Interest Expense
FINANCIALS NET DEBT AND INTEREST EXPENSE Net Debt Calculation ($m) For personal use only Assets Cash and cash equivalents 114 Current derivative financial instruments 48 Non current derivative financial instruments 151 Total Assets 313 Liabilities Current interest bearing liabilities (130) Current d
Slide 34: Operational Benchmarks
APPENDIX OPERATIONAL BENCHMARKS Sydney Queensland Operational Metrics For personal use only FY2017 FY2016 FY2017 FY2016 Slots Revenue ($m) 319 313 309 318 NMR/machine/day 583 572 270 288 MTGMs Revenue ($m) 102 99 39 36 NMR/machine/day 504 535 318 290 Domestic Tables (excl. MTGM) Revenue ($m) 576 545
Slide 35: Operating Efficiency
APPENDIX OPERATING EFFICIENCY ♦ Group operating costs have grown from $827m in FY2012 to $971m in FY2017 (3.2% CAGR), whilst statutory gross revenue For personal use only has grown from $1.7bn to $2.4bn over the same period (7.6% CAGR) ♦ Operating costs as share of statutory gross revenue has declin
Slide 36: Cash Conversion
APPENDIX CASH CONVERSION Category Jun-17 Jun-16 For personal use only $m Cash flows from operating activities before interest and income tax Net cash receipts from customers (inclusive of GST) 2,348.3 2,287.6 Payments to suppliers and employees (inclusive of GST) (1,259.4) (1,307.7) Payment of gover
Slide 37: International VIP Rebate Business Receivables
APPENDIX INTERNATIONAL VIP REBATE BUSINESS RECEIVABLES International VIP Rebate Business 30 days 0 - 30 days 1 - 3 years 3 years + Total For personal use only Receivables (Before provisions) - 1 year June 2017 ($m) Not yet due 129.3 129.3 Past due not impaired 27.1 6.2 33.3 Considered impaired 2.8 1
Slide 38: 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
Slide 39: For personal use only
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The Star Entertainment Group — FY2017 Earnings Presentation on 6ix