Star Entertainment Group Limited · ASX:SGR

Star Entertainment — The Star Entertainment Group — H1 FY2016 Earnings Presentation

33 slides from Star Entertainment's earnings presentation, Feb 16, 2016

  1. Slide 1: ASX Announcement: Half Year Results Presentation

    ASX Announcement For personal use only 16 February 2016 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 2015, to be presented by Matt Bekier, Managin

  2. Slide 2: The Star Entertainment Group Half Year 2016 Results Presentation

    For personal use only THE STAR ENTERTAINMENT GROUP HALF YEAR 2016 RESULTS PRESENTATION 16 FEBRUARY 2016

  3. 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

  4. 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

  5. Slide 5: Overview: Half Year FY2016 Results

    OVERVIEW HALF YEAR FY2016 RESULTS  Strong first half on all key operating fundamentals: For personal use only • Domestic tables revenue up 12.3% across the Group • Slots revenue up 7.4% • Non-gaming cash revenue up 1.1% • Operating costs well controlled up 3.2%  International VIP Rebate business v

  6. Slide 6: Key Drivers of Half Year FY2016 Results

    OVERVIEW KEY DRIVERS OF HALF YEAR FY2016 RESULTS ($m) For personal use only 400 +18.6% 350 on pcp 5.6 14.5 6.7 65.3 14.5 309.9 117.3 300 20.8 261.4 250 240.6 -19.9% on pcp 200 192.6 150 100 50 1H FY2015 International VIP 1H FY2015 The Star Queensland International VIP Gaming taxes, Operating 1H FY20

  7. Slide 7: Key Drivers – The Star Sydney

    OVERVIEW KEY DRIVERS – THE STAR SYDNEY Normalised gross revenue of $885m, up 7.9% versus pcp (actual gross revenue of $738m, down 7.2%). For personal use only Normalised EBITDA of $223m, up 21.7% (actual EBITDA of $91m, down 43.7%):  Solid revenue growth across all lines of business other than Inte

  8. Slide 8: Key Drivers – Queensland Casinos

    OVERVIEW KEY DRIVERS – QUEENSLAND CASINOS Normalised gross revenue of $353m, up 3.8% versus pcp (actual gross revenue of $370m, up 8.2%). For personal use only Normalised EBITDA of $87m, up 11.2% (actual EBITDA of $102m, up of 28.1%):  Solid revenue growth across gaming lines of business – Slots +2

  9. Slide 9: EGM Market Share

    OVERVIEW EGM MARKET SHARE  EGM revenue growth across the The Star Sydney The Star Sydney - Rolling 12 Month Average For personal use only Group for 1H FY2016 was up 10% 10% 10.7% versus pcp, with The Star 9% 9% Sydney up 12.8% and Queensland properties up 8.4% 8% 8%  The Star Sydney market share 7

  10. Slide 10: International VIP Rebate Business Performance

    OVERVIEW INTERNATIONAL VIP REBATE BUSINESS PERFORMANCE  International VIP Rebate business turnover of $23.6bn, up 1.5% versus pcp For personal use only  Normalised gross revenue of $338m, up 1.7% (actual gross revenue of $207m down 32.9%) versus pcp  Actual win rate of 0.88% below prior period of

  11. Slide 11: Good Progress – Delivering to Plan

    OVERVIEW GOOD PROGRESS – DELIVERING TO PLAN  Progress made during 1H FY2016 on all priorities: For personal use only • Completed the corporate brand change to The Star Entertainment Group Limited, and set the future brand direction and platform for the Group • Improved operational performance at al

  12. 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

  13. Slide 13: Profit and Loss

    FINANCIALS PROFIT AND LOSS ($m) 1H FY2015 1H FY2016 Growth 1H FY2015 1H FY2016 Growth For personal use only Actual Actual % Normalised 2 Normalised 2 % Domestic Gaming Revenue 697.1 768.2 10.2% 697.1 768.2 10.2% International VIP Rebate (Gross) 309.1 207.5 ( 32.9%) 332.2 337.8 1.7% Non-gaming & Othe

  14. Slide 14: International VIP Rebate Business Normalisation

    FINANCIALS INTERNATIONAL VIP REBATE BUSINESS NORMALISATION  Normalised International VIP Rebate business win rate of 1.43% was set in FY2014 based on the historical For personal use only average win rate  The average win rate for the International VIP Rebate business has now fallen below the rate

  15. Slide 15: Balance Sheet

    FINANCIALS BALANCE SHEET $m ASSETS December 2014 June 2015 December 2015  Cash conversion of EBITDA 99% For personal use only Current Assets Cash and cash equivalents 196.6 196.6 146.8  Trade and other receivables of $128m up Trade and other receivables 116.2 110.5 128.3 $18m reflecting strong act

  16. Slide 16: Funding

    FINANCIALS FUNDING  1H FY2016 net debt of $504m (June 2015 $400m)1 For personal use only  Undrawn bank facilities of $445m and average drawn debt maturity of 3.7 years  1H FY2016 statutory net finance costs of $23m  FY2016 statutory net finance costs expected to be approximately $50m on constant

  17. Slide 17: Capital Expenditure

    FINANCIALS CAPITAL EXPENDITURE  1H FY2016 capital expenditure of $158m, up $82m on pcp, due to execution of expansion plans at Jupiters For personal use only Gold Coast and The Star Sydney  FY2016 capital expenditure expected to be between $275m - $325m, in line with prior guidance, excluding equi

  18. Slide 18: 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 17

  19. Slide 19: 2H FY2016 Priorities and Trading Update

    OUTLOOK AND PRIORITIES 2H FY2016 PRIORITIES AND TRADING UPDATE  Priorities for 2H FY2016 are a continuation of the plan advanced in FY2015: For personal use only 1. Improve earnings across the Group through a focus on operations and improved efficiency 2. Deliver on the next stage of the capital pr

  20. Slide 20: Queen's Wharf Brisbane

    OUTLOOK AND PRIORITIES QUEEN’S WHARF BRISBANE  Contractual close with the Queensland Government on the For personal use only Queen’s Wharf project reached in November 2015  Construction expected to commence early 2017, with completion of the Integrated Resort expected to take approximately five an

  21. Slide 21: Jupiters Gold Coast Development Plans

    OUTLOOK AND PRIORITIES JUPITERS GOLD COAST DEVELOPMENT PLANS  Previously announced $345m Gold Coast redevelopment For personal use only underway with existing hotel refurbishment, new 6-star suite hotel, gaming and F&B expansion progressing to plan  Additional developments under consideration in t

  22. Slide 22: The Star Sydney Development Plans

    OUTLOOK AND PRIORITIES THE STAR SYDNEY DEVELOPMENT PLANS  Previously announced $500m Sydney works underway to For personal use only expand F&B and gaming, upgrade private gaming rooms, upgrade hotel rooms and improve access and customer flow  Additional developments under consideration with new $5

  23. Slide 23: 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 22

  24. Slide 24: Appendix

    THE STAR ENTERTAINMENT GROUP APPENDIX 1H FY2016 ACTUAL RESULTS PAGE 24 For personal use only 1H FY2016 NORMALISED RESULTS PAGE 25 1H FY2016 NORMALISED RESULTS RE-STATED PAGE 26 INTERNATIONAL VIP REBATE BUSINESS NORMALISATION PAGE 27 FINANCIAL METRICS PAGE 28 OPERATIONAL BENCHMARKS PAGE 29 CASH COLLE

  25. Slide 25: 1H FY2016 Actual Results

    APPENDIX 1H FY2016 ACTUAL RESULTS Actual The Star Sydney Queensland Casinos Total For personal use only fav/ (unfav) fav/ (unfav) fav/ (unfav) $m 1H FY2015 1H FY2016 1H FY2015 1H FY2016 1H FY2015 1H FY2016 on pcp on pcp on pcp Slots 142.2 159.8 12.4% 159.1 163.7 2.9% 301.3 323.5 7.4% Domestic Tables

  26. Slide 26: 1H FY2016 Normalised Results

    APPENDIX 1H FY2016 NORMALISED RESULTS Normalised 1 The Star Sydney Queensland Casinos Total For personal use only fav/ (unfav) fav/ (unfav) fav/ (unfav) $m 1H FY2015 1H FY2016 1H FY2015 1H FY2016 1H FY2015 1H FY2016 on pcp on pcp on pcp Slots 142.2 159.8 12.4% 159.1 163.7 2.9% 301.3 323.5 7.4% Domes

  27. Slide 27: Normalised Results Adjusted for 1.35% Win Rate

    APPENDIX NORMALISED RESULTS ADJUSTED FOR 1.35% WIN RATE Normalised 1 The Star Sydney Queensland Casinos Total For personal use only fav/ (unfav) fav/ (unfav) fav/ (unfav) $m 1H FY2015 1H FY2016 1H FY2015 1H FY2016 1H FY2015 1H FY2016 on pcp on pcp on pcp Slots 142.2 159.8 12.4% 159.1 163.7 2.9% 301.

  28. Slide 28: International VIP Rebate Business Normalisation

    FINANCIALS INTERNATIONAL VIP REBATE BUSINESS NORMALISATION 1H FY2016 Results Comparison 1H FY2016 Change 1H FY2016 Change 1H FY2016 Variance For personal use only $m Actual vs Actual Norm @ 1.43% vs Actual Norm @ 1.35% 1.43% vs 1.35% Total Domestic 897.0 - 897.0 - 897.0 - International VIP Rebate (G

  29. Slide 29: Financial Metrics

    APPENDIX FINANCIAL METRICS Actual Gross Revenue ($m) Normalised Gross Revenue ($m) 1 Dividend Per Share (cents) For personal use only 1,200 1,300 6.5 1,137 1,120 6.0 1,238 1,107 6.0 5.5 1,100 1,171 1,200 1,160 5.5 5.0 5.0 1,000 1,100 4.5 900 1,000 4.0 1H FY2015 2H FY2015 1H FY2016 1H FY2015 2H FY201

  30. Slide 30: Operational Benchmarks

    APPENDIX OPERATIONAL BENCHMARKS The Star Sydney Queensland  Electronic gaming revenues (slots and For personal use only Casinos Operational Benchmarks MTGMs) up strongly, +12.8% at The Star 1H 1H 1H 1H FY2015 FY2016 FY2015 FY2016 Sydney and +8.4% across Queensland Slots casinos: Revenue ($m) 142 16

  31. Slide 31: Cash Collection Ratio

    APPENDIX CASH COLLECTION RATIO Category Dec-14 Dec-15 For personal use only $m Cash flow s from operating activities before interest and incom e tax Net cash receipts in the course of operations 1,118.4 1,097.5 Payments to suppliers, service providers and employees (607.9) (645.4) Payment of governm

  32. Slide 32: International VIP Rebate Business Receivables

    APPENDIX INTERNATIONAL VIP REBATE BUSINESS RECEIVABLES International VIP Rebate Business 30 days For personal use only 0 - 30 days 1 - 3 years 3 years + Total Receivables (Before provisions) - 1 year December 2015 ($m) Not yet due 100.5 - - - 100.5 Past due not impaired 3.0 10.3 5.6 - 18.9 Considere

  33. Slide 33: Glossary

    APPENDIX GLOSSARY Term Definition For personal use only CAGR Compound Annual Growth Rate Capital expenditure Unless otherwise stated, capital expenditure is presented on an accruals basis and excludes investments in (capex) associates and equity acquisitions D&A Depreciation and Amortisation DBC Des

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