Star Entertainment Group Limited · ASX:SGR
Star Entertainment — H1 FY2021 Earnings Presentation
34 slides from Star Entertainment's earnings presentation, Feb 18, 2021
Slide 1: 2021 Half Year Results Presentation
ASX Announcement 18 February 2021 2021 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 2020, to be presented by Matt Bekier, Managing Director and Ch
Slide 2: 1H FY2021 Results Presentation
THE STAR ENTERTAINMENT GROUP 1H FY2021 RESULTS PRESENTATION THURSDAY 18 FEBRUARY 2021
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 ♦ 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
Slide 4: Agenda
THE STAR ENTERTAINMENT GROUP AGENDA 1. OVERVIEW MATT BEKIER – CEO 2. FINANCIALS 3. PRIORITIES 4. Q&A 3
Slide 5: 1H FY2021 Highlights
OVERVIEW 1H FY2021 HIGHLIGHTS PERFORMANCE ♦ Normalised Group revenue of $742m, EBITDA of $226m and NPAT of $63m* IMPACTED BY COVID-19 ♦ Statutory revenue of $750m, EBITDA of $233m (before significant items) and statutory NPAT RELATED RESTRICTIONS of $51m ♦ COVID-19 related social distancing restrict
Slide 6: Trading and JobKeeper Update
OVERVIEW TRADING AND JOBKEEPER UPDATE ♦ Ceased receiving the JobKeeper wage subsidy JOBKEEPER UPDATE ♦ The Queensland and Corporate entities ceased to be eligible on 28 September 2020 ♦ The Star Sydney property staff remained on JobKeeper until 4 January 2021 with the business materially impacted by
Slide 7: Sydney
OVERVIEW SYDNEY IMPACTED BY ♦ Earnings significantly impacted by the more onerous COVID-19 related operating restrictions - OPERATING 300 patron cap per area, no co-mingling, and caps on table and machine utilisation RESTRICTIONS ♦ Domestic EBITDA down 37% to $111m, domestic revenue down 39% ♦ VIP n
Slide 8: Sydney Operating Conditions
OVERVIEW SYDNEY OPERATING CONDITIONS 03-Jan-2021 12-Feb-2021 ♦ Masks mandatory in ♦ Capacity 01-Jul-2020 gaming areas increased to ♦ Capacity increased to 5,000 10,000 patrons 23-Mar-2020 patrons (1 person per 4m2 rule) (1 person per ♦ Property closed ♦ 3 patrons per table 21-Dec-2020 2m2 rule) ♦ Ev
Slide 9: Gold Coast
OVERVIEW GOLD COAST ♦ Gold Coast normalised EBITDA down 20% to $51m, primarily driven by the absence of the SOLID DOMESTIC International business PERFORMANCE ♦ Domestic EBITDA flat at $53m, margins improved from 25.1% to 31.1% ♦ Earnings negatively impacted by COVID-19 related operating restrictions
Slide 10: Brisbane
OVERVIEW BRISBANE ♦ Brisbane normalised EBITDA up 29% to $68m, revenue down 3% RECORD PERFORMANCE ♦ Domestic EBITDA up 34% to $69m, margins improved from 28.5% to 38.2% ♦ Less impacted by operating restrictions including border closures and the shutdown of non- gaming amenities. Non-gaming revenue d
Slide 11: Queensland Operating Conditions
OVERVIEW QUEENSLAND OPERATING CONDITIONS 17-Nov-2020 11-Jan-2021 22-Jan-2021 ♦ Capacity increased to ~5,000 ♦ Treasury Brisbane re-opened to ~2,500 ♦ Revert to 1 person per patrons (1 person per 2m2 patrons (1 person per 4m2 rule) 2m2 rule in Brisbane rule) at both properties ♦ 7 patrons per table ♦
Slide 12: Agenda
THE STAR ENTERTAINMENT GROUP AGENDA 1. OVERVIEW 2. FINANCIALS HARRY THEODORE – CFO 3. PRIORITIES 4. Q&A 11
Slide 13: Group Overview
FINANCIALS GROUP OVERVIEW ♦ Operating expenses down 40% to $324m OPERATING COSTS ♦ Variable costs aligned with lower volumes, fixed costs reduced WELL-MANAGED ♦ Opex includes higher temporary COVID-19 related costs (cleaning, security, hygiene marshals) ♦ JobKeeper wage subsidy of $58m booked in 1H
Slide 14: Group Overview
FINANCIALS GROUP OVERVIEW ♦ $50m fixed cost reduction program underway COST REDUCTION ♦ >60% complete with the full run-rate expected in FY2022, assuming a return to more normal PROGRAM operating conditions ASSET SALES ♦ Contracted the sale of the VIP aircraft and boat PROGRESSING ♦ Progressing the
Slide 15: EBITDA Bridge
FINANCIALS EBITDA BRIDGE $m VIP Rebate EBITDA -$7m in 1H FY2021 1H FY2020 International 1H FY2020 Sydney Queensland Sydney Queensland 1H FY2021 International 1H FY2021 Statutory VIP Rebate Normalised Domestic Domestic International International Normalised VIP Rebate Statutory EBITDA* Business EBITD
Slide 16: Fixed Cost Reduction Program
FINANCIALS FIXED COST REDUCTION PROGRAM ♦ Moved to centralised functions in FY2019-2020 ORGANISATION ♦ The restructure has driven efficiencies, improved capabilities, processes, and decision-making RESTRUCTURE RECAP ♦ Benefit from lower costs (~$50m salaried headcount savings achieved in early FY202
Slide 17: Capex
FINANCIALS CAPEX ♦ The Group is coming off a period of heavy investment, delivered on time and on budget GROUP CAPEX IS ♦ 1H FY2021 group capex $54m DECLINING, ON PLAN ♦ FY2021 expected capex remains ~$100m and ~$125-150m in FY2022 ♦ FY2021 expected D&A expense of ~$210m, ~$200m for FY2022 ♦ No chan
Slide 18: Profit and Loss - 1H FY2021
FINANCIALS PROFIT AND LOSS – 1H FY2021 1H FY2021 1H FY2021 $M fav/(unfav) 2 fav/(unfav) 2 2 STATUTORY NORMALISED 2 2 Domestic Gaming revenue 657.5 (23.8%) 657.5 (23.8%) International VIP Rebate 16.4 (89.4%) 8.8 (96.9%) Non-gaming and other revenue 76.0 (52.3%) 76.0 (52.3%) Gross Revenue 1 749.9 (36.
Slide 19: Balance Sheet
FINANCIALS BALANCE SHEET $M DEC 2020 JUN 2020 DEC 2019 ♦ Capital programs progressed ASSETS Current Assets • Property, plant and equipment declined reflecting Cash and cash equivalents 88.6 66.1 98.0 Trade and other receivables 61.7 99.5 210.8 capex being below depreciation Inventories 16.4 16.4 18.
Slide 20: Agenda
THE STAR ENTERTAINMENT GROUP AGENDA 1. OVERVIEW 2. FINANCIALS 3. PRIORITIES MATT BEKIER – CEO 4. Q&A 19
Slide 21: Strategy Remains Unchanged
PRIORITIES STRATEGY REMAINS UNCHANGED OUR STRATEGY OUR DELIVERY ♦ Privileged assets and partnerships 1 Deliver on the operating model ♦ Signature gaming ♦ Premium hotel rooms, ♦ Leverage improved capabilities Food and Beverage, ♦ Retain the efficiencies from cost management retail (on site and progr
Slide 22: Our Priorities for the Year Ahead
PRIORITIES OUR PRIORITIES FOR THE YEAR AHEAD ♦ Post COVID-19 earnings recovery – safely and effectively lift performance 1 OPERATIONS when permitted while shifting the focus to the locals and domestic markets ♦ Preparation for Sydney competition – new Sovereign PGR, loyalty program relaunch, smart t
Slide 23: Address Crown Sydney
PRIORITIES ADDRESS CROWN SYDNEY COMPETITION READY 1 Table and Regulatory and customer advantage EGM ♦ Table/Slots overlap – individuals, small groups Gaming ♦ Casino EGM exclusivity 2 PGRs Unmatched size and range ♦ New Chairman’s and Sovereign Rooms ♦ Oasis, Oasis Extension 3 Car Park Direct access
Slide 24: Gold Coast
PRIORITIES GOLD COAST CONSTRUCTION UNINTERRUPTED BY COVID-19 ♦ Construction of the Dorsett Hotel and Residences (first JV tower) has not been interrupted by any COVID-19 related operating restrictions • Remains on time and budget for completion in FY2022 • Equity contributions have been completed an
Slide 25: Queen's Wharf Brisbane
PRIORITIES QUEEN’S WHARF BRISBANE WORKS ON TIME AND BUDGET ♦ Construction of the shell, core and façade are underway – construction has progressed above ground ♦ ~88% of project costs are now under lump sum terms ♦ Construction has not been interrupted by any COVID-19 related restrictions and approp
Slide 26: Agenda
THE STAR ENTERTAINMENT GROUP AGENDA 1. OVERVIEW 2. FINANCIALS 3. PRIORITIES 4. Q&A 25
Slide 27: Key Sustainability Metrics
APPENDIX KEY SUSTAINABILITY METRICS SUSTAINABILITY A GLOBAL SUSTAINABILITY LEADER AND ENVIRONMENTAL Casino and Gaming Category 2016 – 2020 Winner International Gaming >80% portfolio with environmental ‘Sustainable Business – ratings, 90% by 2022 Operator’ Award Aligning our reporting with the Green
Slide 28: Statutory Results - 1H FY2021
APPENDIX STATUTORY RESULTS – 1H FY2021 SYDNEY GOLD COAST BRISBANE TOTAL $M 1H FY2021 1H FY2020 fav/(unfav) 1H FY2021 1H FY2020 fav/(unfav) 1H FY2021 1H FY2020 fav/(unfav) 1H FY2021 1H FY2020 fav/(unfav) Slots 121.2 180.1 (32.7%) 98.7 91.1 8.3% 91.3 85.0 7.4% 311.2 356.2 (12.6%) Domestic Tables 227.5
Slide 29: Normalised Results - 1H FY2021
APPENDIX NORMALISED RESULTS – 1H FY2021 SYDNEY GOLD COAST BRISBANE TOTAL $M 1H FY2021 1H FY2020 fav/(unfav) 1H FY2021 1H FY2020 fav/(unfav) 1H FY2021 1H FY2020 fav/(unfav) 1H FY2021 1H FY2020 fav/(unfav) Slots 121.2 180.1 (32.7%) 98.7 91.1 8.3% 91.3 85.0 7.4% 311.2 356.2 (12.6%) Domestic Tables 227.
Slide 30: Operational Metrics
APPENDIX OPERATIONAL METRICS SYDNEY QUEENSLAND SYDNEY QUEENSLAND OPERATIONAL METRICS 1H FY2021 1H FY2020 1H FY2021 1H FY2020 VARIANCE VARIANCE Slots Revenue ($m) 121 180 190 176 (32.7%) 7.9% NMR/machine/day 478 654 344 314 (26.9%) 9.5% MTGMs Revenue ($m) 37 51 21 21 (26.0%) (2.0%) NMR/machine/day 34
Slide 31: Cash Conversion and Funding
APPENDIX CASH CONVERSION AND FUNDING CATEGORY Dec-20 Jun-20 Dec-19 $M CASH CONVERSION Cash flows from operating activities before interest and income tax Net cash receipts in the course of operations 816.9 1,640.1 1,063.9 Payments to suppliers, service providers and employees (482.2) (1,103.8) (598.
Slide 32: International VIP Rebate Receivables
APPENDIX INTERNATIONAL VIP REBATE RECEIVABLES * INTERNATIONAL VIP REBATE 30 DAYS - ♦ 31 December 2020 past due not BUSINESS RECEIVABLES 0 - 30 DAYS 1 - 3 YEARS TOTAL impaired receivables down on 30 1 YEAR (BEFORE PROVISIONS) June 2020, reflecting significantly December 2020 ($m) reduced VIP business
Slide 33: Glossary
APPENDIX GLOSSARY TERM DEFINITION CAGR Compound Annual Growth Rate Capital expenditure Unless otherwise stated, capital expenditure is presented on an accruals basis and excludes investments in associates and (capex) equity acquisitions D&A Depreciation and Amortisation Domestic Tables Domestic Tabl
Slide 34: The Star Entertainment Group
THE STAR ENTERTAINMENT GROUP
Star Entertainment Group — H1 FY2021 Earnings Presentation on 6ix