Star Entertainment Group Limited · ASX:SGR
Star Entertainment — The Star Entertainment Group — H1 FY2023 Earnings Presentation
37 slides from Star Entertainment's earnings presentation, Feb 23, 2023
Slide 1: 2023 Half-Year Results Presentation (ASX Announcement)
ASX Announcement For personal use only 23 February 2023 2023 HALF-YEAR 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 2022, to be presented by Robbie Cooke, Managing Director and
Slide 2: 1H FY23 Results Presentation
For personal use only THE STAR ENTERTAINMENT GROUP 1H FY23 RESULTS PRESENTATION THURSDAY 23 FEBRUARY 2023
Slide 3: Basis of Preparation and Non-IFRS Information
THE STAR ENTERTAINMENT GROUP BASIS OF PREPARATION AND NON-IFRS INFORMATION ♦ Information in this presentation is provided as at the date of the presentation unless specified otherwise. It should be read in conjunction with The Star Entertainment Group Limited’s financial report for the six months en
Slide 4: Contents
THE STAR ENTERTAINMENT GROUP CONTENTS For personal use only 1. OVERVIEW 2. GROUP FINANCIALS 3. CAPITAL STRUCTURE INITIATIVES 4. EARNINGS OUTLOOK & KEY PRIORITIES 5. Q&A 3
Slide 5: Overview: 1H FY23 Results
OVERVIEW 1H FY23 RESULTS 1H FY23 EARNINGS 1H FY23 1H FY221 For personal use only REVIEW Normalised EBITDA $200m $29m NPAT / (loss) $44m ($74m) Statutory EBITDA $200m $31m NPAT / (loss) ($1,264m) ($74m) ♦ Queensland properties achieved record domestic revenue performance, Sydney property impacted by
Slide 6: The Star Gold Coast
OVERVIEW THE STAR GOLD COAST Normalised1 1H FY23 1H FY222 % vs. 1H FY20 % vs. 1H FY23 EARNINGS 1H FY22 1H FY20 For personal use only REVIEW $m $m $m Domestic Revenue 275.6 180.4 52.8% 212.1 29.9% - EGMs 123.9 98.9 25.3% 91.1 36.0% - Tables 57.8 40.5 42.7% 64.9 (10.9%) - Non-gaming 93.9 41.0 129.0% 5
Slide 7: Treasury Brisbane
OVERVIEW TREASURY BRISBANE Normalised1 1H FY23 1H FY222 % vs. 1H FY20 % vs. 1H FY23 EARNINGS 1H FY22 1H FY20 For personal use only REVIEW $m $m $m Domestic Revenue 196.4 160.6 22.3% 180.9 8.6% - EGMs 102.6 81.3 26.2% 85.0 20.7% - Tables 75.4 66.8 12.9% 82.4 (8.5%) - Non-gaming 18.4 12.5 47.2% 13.5 3
Slide 8: The Star Sydney
OVERVIEW THE STAR SYDNEY Normalised1 1H FY23 1H FY222 % vs. 1H 1H FY20 % vs. 1H 1H FY23 EARNINGS FY22 FY20 For personal use only REVIEW $m $m $m Domestic Revenue 541.2 238.5 126.9% 628.5 (13.9%) - EGMs 182.2 79.6 128.9% 180.1 1.2% - Tables 278.3 130.9 112.6% 358.8 (22.4%) - Non-gaming 80.7 28.0 188.
Slide 9: Significant Actions / Matters
OVERVIEW SIGNIFICANT ACTIONS / MATTERS PROPOSED INCREASES ♦ The Star and the NSW Government are in discussions on the implementation of the proposed TO NSW CASINO DUTY changes to NSW casino duty rates For personal use only RATES ♦ The changes as currently proposed are likely to have a significant im
Slide 10: Regulatory Update
OVERVIEW REGULATORY UPDATE ♦ Post the Bell Review, The NSW Independent Casino Commission suspended The Star NEW SOUTH WALES Sydney’s casino licence, appointed a Manager and imposed a $100m fine (payable in three For personal use only instalments by 29 December 2023) ♦ The Casino Control Act was amen
Slide 11: Contents
THE STAR ENTERTAINMENT GROUP CONTENTS For personal use only 1. OVERVIEW 2. GROUP FINANCIALS 3. CAPITAL STRUCTURE INITIATIVES 4. EARNINGS OUTLOOK & KEY PRIORITIES 5. Q&A 10
Slide 12: Group Financials Overview
GROUP FINANCIALS OVERVIEW ♦ Group revenue down 1% on pre-COVID levels1 FINANCIAL OVERVIEW • Queensland experienced strong trading with revenue up 20% vs. pre-COVID1 levels For personal use only (Gold Coast up 30% and Brisbane up 9%) • Sydney domestic revenue down 14% vs. pre-COVID1 levels with gamin
Slide 13: Profit and Loss — 1H FY23
GROUP FINANCIALS PROFIT AND LOSS — 1H FY23 2 2 2 For personal use only 1H FY2023 1H FY2022 1H FY2023 1H FY2022 $M fav/(unfav) fav/(unfav) STATUTORY STATUTORY NORMALISED2 NORMALISED2 Domestic Gaming revenue 820.2 498.0 64.7% 820.2 498.0 64.7% International VIP Rebate - 1.8 (100.0%) - 0.5 (100.0%) Non
Slide 14: Capex and JV Contributions
GROUP FINANCIALS CAPEX AND JV CONTRIBUTIONS ♦ Capex of $76m, below depreciation and amortisation expense of $101m GROUP CAPEX ♦ FY23 expectation: For personal use only • Capex remains ~$150m • Depreciation and amortisation expense remains ~$200m to $205m • Net funding costs $75 to $80m GROUP CAPEX1
Slide 15: Balance Sheet (Pre-Capital Structure Initiatives)
GROUP FINANCIALS BALANCE SHEET (PRE-CAPITAL STRUCTURE INITIATIVES) $M DEC 2022 JUN 2022 ♦ Property, plant and equipment declined with capex ($76m) below ASSETS depreciation and amortisation ($101m) and impairments ($111m) For personal use only Current Assets Cash and cash equivalents 109.1 82.0 ♦ Ot
Slide 16: Contents
THE STAR ENTERTAINMENT GROUP CONTENTS For personal use only 1. OVERVIEW 2. GROUP FINANCIALS 3. CAPITAL STRUCTURE INITIATIVES 4. EARNINGS OUTLOOK & KEY PRIORITIES 5. Q&A 15
Slide 17: Capital Structure Initiatives Overview
CAPITAL STRUCTURE INITIATIVES OVERVIEW Today, The Star announces an $800 million equity raising For personal use only The Star also announces it has secured covenant relief through to June 2025 CAPITAL STRUCTURE INITIATIVES Equity Raising Covenant Relief ♦ $800m equity raising (Equity Raising): ♦ Co
Slide 18: Strengthened Balance Sheet
CAPITAL STRUCTURE INITIATIVES STRENGTHENED BALANCE SHEET Pro forma as at 31 December 2022 For personal use only ✓ ✓ ✓ $341m 0.8x $754m Pro forma Pro forma Pro forma Net Debt1 Net Debt / EBITDA2 Liquidity3 Reduction of $770m Reduction of 1.9x Increase of $200m (from $1,111m) (from 2.7x) (from $554m)
Slide 19: Looking Ahead
CAPITAL STRUCTURE INITIATIVES LOOKING AHEAD Strengthened balance sheet provides a platform for The Star to continue to deliver on its key strategic priorities For personal use only Pathway to suitability Further capital Operational structure initiatives enhancements Continued urgent focus Strengthen
Slide 20: Contents
THE STAR ENTERTAINMENT GROUP CONTENTS For personal use only 1. OVERVIEW 2. GROUP FINANCIALS 3. CAPITAL STRUCTURE INITIATIVES 4. EARNINGS OUTLOOK & KEY PRIORITIES 5. Q&A 19
Slide 21: 2H FY23 YTD and FY23 Outlook
EARNINGS OUTLOOK 2H FY23 YTD AND FY23 OUTLOOK ♦ Consistent with the earnings guidance of 13 February 2023, early 2H FY23 trading is EARLY 2H FY23 TRADING broadly consistent with 2Q FY23. In the period from 1 January 2023 to 14 February 2023: For personal use only • Gold Coast: domestic revenue up 24
Slide 22: Operational Initiatives
EARNINGS OUTLOOK OPERATIONAL INITIATIVES ♦ The Star intends to implement a number of focused operational initiatives to improve its BUSINESS IMPROVEMENT trading performance, which are estimated to contribute ~$40m to the Group’s operating For personal use only INITATIVES performance (on an annualise
Slide 23: Priorities for the Year Ahead
KEY PRIORITIES PRIORITIES FOR THE YEAR AHEAD ♦ Commitment to demonstrating suitability to hold casino licences in NSW and REMEDIATION 1 Queensland For personal use only MEASURES ♦ Progressing remediation measures with urgency in NSW and Queensland, including addressing the recommendations of the Bel
Slide 24: Major Projects: Gold Coast
MAJOR PROJECTS GOLD COAST TOWER 2 UNDERWAY For personal use only ♦ The Dorsett Gold Coast completed its first full year of operation, performing above forecast levels given higher than expected occupancy levels and rates ♦ Construction of Tower 2 is on track for a 2024 opening with all apartments pr
Slide 25: Major Projects: Queen's Wharf Brisbane
MAJOR PROJECTS QUEEN’S WHARF BRISBANE PHASED OPENING FROM 2023 For personal use only ♦ Total project costs are expected to be ~$2.9bn ♦ Destination Brisbane Consortium (DBC) is in ongoing discussions with the builder regarding purported claims for additional costs, extensions of time and damages, wi
Slide 26: Major Projects: Sydney
MAJOR PROJECTS SYDNEY ASSESS DEVELOPMENT OPPORTUNITIES For personal use only ♦ A number of development opportunities exist following changes to the planning controls under the Pyrmont Peninsula Place Strategy ♦ Pathway to a Development Application for the potential construction of: • 105-metre, six-
Slide 27: Contents
THE STAR ENTERTAINMENT GROUP CONTENTS For personal use only 1. OVERVIEW 2. GROUP FINANCIALS 3. CAPITAL STRUCTURE INITIATIVES 4. EARNINGS OUTLOOK & KEY PRIORITIES 5. Q&A 26
Slide 28: Appendix
For personal use only APPENDIX
Slide 29: Statutory Results — 1H FY23
APPENDIX STATUTORY RESULTS — 1H FY23 SYDNEY GOLD COAST BRISBANE TOTAL $M 1H FY2023 1H FY2022 fav/(unfav) 1H FY2023 1H FY2022 fav/(unfav) 1H FY2023 1H FY2022 fav/(unfav) 1H FY2023 1H FY2022 fav/(unfav) For personal use only Slots 182.2 79.6 128.9% 123.9 98.9 25.3% 102.6 81.3 26.2% 408.7 259.8 57.3% D
Slide 30: Normalised Results — 1H FY23
APPENDIX NORMALISED RESULTS — 1H FY23 SYDNEY GOLD COAST BRISBANE TOTAL $M 1H FY2023 1H FY2022 fav/(unfav) 1H FY2023 1H FY2022 fav/(unfav) 1H FY2023 1H FY2022 fav/(unfav) 1H FY2023 1H FY2022 fav/(unfav) For personal use only Slots 182.2 79.6 128.9% 123.9 98.9 25.3% 102.6 81.3 26.2% 408.7 259.8 57.3%
Slide 31: Portfolio of Premium Properties
APPENDIX PORTFOLIO OF PREMIUM PROPERTIES QWB to replace Treasury Brisbane once open The Star Sydney The Star Gold Coast1,2 Queen’s Wharf Brisbane2 Treasury Brisbane For personal use only Year opened ♦ 1997 ♦ 1985 ♦ Dec 2023 phased opening ♦ 1995 ♦ 99 years ♦ Perpetual licence ♦ 99 years from opening
Slide 32: Operational Metrics
APPENDIX OPERATIONAL METRICS SYDNEY GOLD COAST BRISBANE OPERATIONAL METRICS For personal use only 1H FY2023 1H FY2022 fav/(unfav) 1H FY2023 1H FY2022 fav/(unfav) 1H FY2023 1H FY2022 fav/(unfav) Slots Revenue ($m) 182 80 128.9% 124 99 25.3% 103 81 26.2% NMR/machine/day 666 296 125.3% 477 373 27.9% 41
Slide 33: Cash Conversion and Funding (Pre Capital Raise)
APPENDIX CASH CONVERSION AND FUNDING (PRE CAPITAL RAISE) CATEGORY DEC 2022 DEC 2021 $M CASH CONVERSION For personal use only Cash flows from operating activities before interest and income tax Net cash receipts in the course of operations 1,066.5 612.9 Payments to suppliers, service providers and em
Slide 34: Sustainability
APPENDIX SUSTAINABILITY OUR STRATEGY For personal use only Our new strategy, Responsible Business, Sustainable Destinations is supporting our transition to ensure we look towards the future with close management of our most material environmental, social and governance (ESG) issues SOCIAL AND COMMUN
Slide 35: Sustainability and Environmental
APPENDIX SUSTAINABILITY SUSTAINABILITY AND ENVIRONMENTAL For personal use only GREEN STAR PERFORMANCE RATINGS achieved for The Star Sydney and The Star Gold Coast 5.5 STAR NABERS ENERGY RATING achieved for Sydney Corporate Office > 90 % portfolio with environmental ratings (Green Star, NABERS, Earth
Slide 36: Glossary
APPENDIX GLOSSARY TERM DEFINITION For personal use only AML/CTF Anti-Money Laundering and Counter-Terrorism Financing AUSTRAC Australian Transaction Reports and Analysis Centre CAGR Compound Annual Growth Rate Unless otherwise stated, capital expenditure is presented on an accruals basis and exclude
Slide 37: The Star Entertainment Group
For personal use only THE STAR ENTERTAINMENT GROUP
The Star Entertainment Group — H1 FY2023 Earnings Presentation on 6ix