Las Vegas Sands Corp. · NYSE:LVS
Las Vegas Sands — Q3 2018 Earnings Presentation
60 slides from Las Vegas Sands's earnings presentation, Oct 24, 2018
Slide 1: 3Q18 Earnings Call Presentation
The Venetian Macao Sands Cotai Central, Macao Marina Bay Sands, Singapore The Parisian Macao 3Q18 Earnings Call Presentation October 24, 2018 Sands Macao Four Seasons Macao Sands Bethlehem The Venetian Las Vegas The Palazzo, Las Vegas
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward‐looking statements made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward‐looking statements involve a number of risks, uncertainties or other factors beyond the company’s control, whi
Slide 3: The Investment Case for Las Vegas Sands
The Investment Case for Las Vegas Sands The global leader in Integrated Resort development and operation A unique MICE‐based business model delivering strong growth in cash flow and earnings Proven track record of delivering secular long‐term growth in Asia Unmatched development and operatin
Slide 4: Third Quarter 2018 Financial Highlights
Third Quarter 2018 Financial Highlights Quarter Ended September 30, 2018 vs Quarter Ended September 30, 2017 ($ in millions, except per share information) Actual Hold‐Normalized Net Revenue $3,372 +6.7% $3,356 +6.6% Net Income 699 +2.2% Adjusted Net Income Attributable to LVS 604 ‐0.3% 593 +1.9% Dil
Slide 5: Third Quarter 2018 Financial Results
Third Quarter 2018 Financial Results Quarter Ended September 30, 2018 vs Quarter Ended September 30, 2017 ($ in millions, except per share information) 3Q17 3Q18 $ Change % Change Net Revenue $ 3,161 $ 3,372 $ 211 6.7% Net Income $ 684 $ 699 $ 15 2.2% Adjusted Property EBITDA $ 1,209 $ 1,282 $ 73 6.
Slide 6: Strong Cash Flow, Balance Sheet and Liquidity
Strong Cash Flow, Balance Sheet and Liquidity Flexibility for Future Growth Opportunities and Return of Capital As of September 30, 2018: Trailing twelve months ended September 30, 2018: Cash Balance – $4.79 billion Cash Flow from Operations – $4.72 billion Debt – $11.96 billion1 Adjusted Pr
Slide 7: LVS Increasing Return of Capital to Shareholders
LVS Increasing Return of Capital to Shareholders $21.6 Billion of Capital Returned to Shareholders Since 2012 Las Vegas Sands remains committed to returning capital LVS Recurring Dividends per Share1 to shareholders via its recurring dividend program and share repurchases: Dividends: $2.88 $2.92 $
Slide 8: SCL Return of Capital to Shareholders
SCL Return of Capital to Shareholders US$13.4 Billion of Capital Returned to Shareholders Since 2012 SCL Recurring Dividends per Share (HK$)1 Sands China remains committed to returning capital to shareholders via its recurring bi‐annual dividend program $1.99 $1.99 $1.99 $1.99 Sands China is com
Slide 9: Macao Operations EBITDA Performance
Macao Operations EBITDA Performance Quarter Ended September 30, 2018 vs Quarter Ended September 30, 2017 Macao Operations Adjusted Property EBITDA and Adjusted Property EBITDA Margin ($ in millions) Adjusted Property EBITDA Hold‐Normalized Adj. Prop. EBITDA $900 60% $800 $754 $754 50% $700 $651 $641
Slide 10: Macao Financial Performance by Property
Macao Financial Performance Financial Performance by Property ($ in millions) Net Revenue Adj. Property EBITDA Adj. Property EBITDA Margin Growth Growth Growth 3Q17 3Q18 $ % 3Q17 3Q18 $ % 3Q17 3Q18 bps The Venetian Macao $702 $857 $155 22.1% $264 $344 $80 30.3% 37.6% 40.1% 250 Sands Cotai Central 46
Slide 11: Sands China Mass Market Table Update
Sands China Mass Market Table Update Mass Market Table Win Grew 18.4% in 3Q18 vs. 3Q17 SCL Base Mass Table Win by Quarter SCL Premium Mass Table Win by Quarter Sands China Departmental Profit Margin: 35% - 45% Sands China Departmental Profit Margin: 25% - 40% ($ in millions) Avg. Win per Table per D
Slide 12: Growing Visitation from China to Macao
Growing Visitation from China to Macao1 Non‐Guangdong Province Visitation Grew 16% for the Trailing Twelve Months Ended September 30, 2018 Year‐Over‐Year Visitation Growth from China Visitation from China to Macao1 Twelve Months Ended September 30, Population GDP Per Penetration Province 2017 2018 %
Slide 13: Macao Market: Expanding Overnight Visitation and Increasing Mass Gaming Win-per-Visit
Macao Market: Expanding Overnight Visitation and Increasing Mass Gaming Win‐per‐Visit are Driving Growth Overnight Visits1 Mass (Tables & Slots) From China Win‐per‐Visit2 (in millions) ($) 4.0 600 3.6 $542 3.5 $504 3.2 500 3.0 400 2.5 2.0 300 1.5 200 1.0 100 0.5 0.0 0 3Q17 3Q18 3Q17 3Q18 More Hotel
Slide 14: Macao Market: Continued Strong Growth in High Margin Mass Gaming Segment
Macao Market: Continued Strong Growth in High Margin Mass Gaming Segment Macao Market Mass Gaming Revenue (Tables & Slots) & Mass Win‐per‐Visit1 ($ in millions) $5,500 $1,000 $4,878 $4,955 $5,000 $4,449 $4,706 $4,841 $4,589 $4,419 $3,989 $4,169 $4,500 $4,340 $4,146 $800 $3,816 $4,017 $4,000 $3,873 $
Slide 15: Macao Mass Market
Macao Mass Market Macao Market Mass Gaming Revenue ($ in millions) Mass Win (Tables and Slots)1 Q1 Q2 Q3 Q4 Total 2016 $3,609 $3,508 $3,816 $3,989 $14,922 2017 $4,146 $4,017 $4,169 $4,706 $17,038 Growth ('17 v '16) 14.9% 14.5% 9.3% 18.0% 14.2% 2018 $4,955 $4,841 $4,878 2 Growth ('18 v '17) 19.5% 20.
Slide 16: Sands China VIP Table Update
Sands China VIP Table Update ($ in millions, except per table amounts) VIP Investment SCL Rolling Win by Quarter Increasing in 2018 and 2019 Avg. Win per Table per Day $29,515 $800 $30,558 Adding additional amenities $700 $687 across our entire property portfolio $596 $600 Refurbishing and impro
Slide 17: Macao Market: VIP Gaming
Macao Market: VIP Gaming Macao Market VIP Gaming Revenue ($ in millions) VIP Win1 Q1 Q2 Q3 Q4 Total 2016 $3,294 $2,856 $3,017 $3,516 $12,683 2017 $3,661 $3,734 $4,099 $4,292 $15,786 Growth ('17 v '16) 11.1% 30.7% 35.9% 22.1% 24.5% 2 2018 $4,429 $4,208 $4,230 Growth ('18 v '17) 21.0% 12.7% 3.2% 2 The
Slide 18: A Focus on Reinvestment in Our Market-Leading Assets
A Focus on Reinvestment in Our Market‐Leading Assets Ongoing Strategic Reinvestment across our Market‐leading Macao Portfolio Estimated Spend Expected Timeframe The Londoner: Renovation, expansion and rebranding of SCC to The ~$1.35B Commencement in 2019 – phased to minimize Londoner Macao disrupt
Slide 19: Sands China Market-Leading Cotai Strip Property Portfolio
Sands China Market‐Leading Cotai Strip Property Portfolio LVS’ Cotai Strip Properties Leadership in Macao Investment: 1 ~$13 billion today, ~$15 billion by 2021 Nearly 30 million square feet of interconnected facilities on Cotai 2 Hotel Inventory: ~12,200 rooms and luxury suites as of 3Q18 >
Slide 20: Sands China Departmental Profit Contribution Diversified and Stable
Sands China Departmental Profit Contribution Diversified and Stable Sands China Departmental Profit Contribution1 TTM 3Q17 TTM 3Q18 Other Other 4% 4% VIP VIP 8% 11% Mall 12% Mall 13% Mass Tables 49% Mass Tables 54% Hotel Hotel 15% 15% Slots Slots 8% 7% Mass Tables / Slots and Non‐Gaming Generated 92
Slide 21: Capital Expenditures Expectations
Capital Expenditures Expectations Future Planned Investments Composed of Income Producing Projects and Maintenance ($ in millions) $2,400 LVS Capex Expectations $1,800 $1,529 $1,398 $1,450 $285 $67 $1,250 $1,179 $350 $1,200 $75 $75 $1,050 $898 $190 $837 $800 $25 $300 $767 $925 $19 $210 $390 $25 $600
Slide 22: Market Leading Hotel Capacity at SCL
Market Leading Hotel Capacity at SCL Projected Macao Market 4/5 Star Hotel Rooms at December 31, 2020 Projected Macao Market Gaming Operator Hotel Rooms at December 31, 20201 Cotai Total Market New Development % of Gaming % of Gaming % of Total 16,000 Gaming Operator Rooms Operators Rooms Operators
Slide 23: Macao Market Adjusted Property EBITDA Market Share by Operator
Macao Market Adjusted Property EBITDA Market Share by Operator Historical Adjusted Property EBITDA Market Share1 Sands China2 All Others Macao Leader in Market Share 40% of EBITDA 80% 72% 67% 10% 30% 7% 60% 16% 17% 20% 40% 5% 14% 33% 14% 28% 14% 10% 20% 24% 18% 0% 0% 2012 TTM 2Q18 2012 TTM 2Q18 3 3
Slide 24: Marina Bay Sands
Marina Bay Sands Delivered $419 Million of Adjusted Property EBITDA Adjusted property EBITDA decreased 5.2% to $419 Adjusted Property EBITDA million due principally to lower rolling volume and Adjusted Property EBITDA Margin compared to 3Q17 ($ in millions) Actual Hold‐Normalized Hold‐normalized
Slide 25: Marina Bay Sands Diversified Sources of Departmental Profit
Marina Bay Sands Diversified Sources of Departmental Profit Marina Bay Sands Hold‐Normalized Departmental Profit Contribution TTM 3Q171 TTM 3Q181 VIP Other VIP 16% Other 4% 15% 5% Mass Tables Mass Tables 36% 33% Mall Mall 8% 8% Hotel Hotel 16% 17% Slots Slots 22% 20% Diversified Sources of Profit at
Slide 26: Marina Bay Sands: The Reference Model for Future Integrated Resort Projects
Marina Bay Sands: The Reference Model for Future Integrated Resort Projects Ideal reference site for jurisdictions considering MICE‐based Integrated Resort development Provides exceptional economic power and direct contributions to tourism, employment and GDP growth The Most Compelling and Prove
Slide 27: Retail Mall Portfolio in Asia Generating Strong Revenue and Operating Profit
Retail Mall Portfolio in Asia Generating Strong Revenue and Operating Profit Trailing Twelve Months Retail Mall Revenue ($ in millions) TTM 3Q18 Sales $700 $647 $646 $649 $658 $641 per Sq. Foot² $600 $175 MBS: $164 $167 $171 $173 $1,840 $500 Parisian Macao: $68 $66 $64 $62 $59 $657 $400 $63 SCC: $64
Slide 28: Rising Retail Tenant Sales Across Asia Portfolio
Rising Retail Tenant Sales Across Asia Portfolio Trailing Twelve Months’ Sales per Square Foot1 ($ per Sq. Foot, Unless Otherwise Indicated) Sales per Sq. Ft. 3Q18 GLA2 TTM 3Q18 v (Sq. Ft) TTM 3Q18 TTM 2Q18 TTM 1Q18 TTM 4Q17 TTM 3Q17 TTM 3Q17 The Shoppes at Marina Bay Sands 611,004 $ 1,840 $ 1,773 $
Slide 29: Las Vegas Operations Update
Las Vegas Operations Update Hold‐normalized Adjusted Property EBITDA of $97 million Adjusted property EBITDA was flat at $76 million Adjusted Property EBITDA and Adjusted Property EBITDA Margin — Hold‐normalized adjusted property EBITDA ($ in millions) • Increased 7.8% to $97 million Actual Hold‐N
Slide 30: Sands Bethlehem Update
Sands Bethlehem Update Leading Tri‐State Region Property Adjusted Property EBITDA Adjusted property EBITDA decreased 17.5% to $33 and Adjusted Property EBITDA Margin million. Table games hold was 18.5% in 3Q18 versus ($ in millions) 20.1% in 3Q17 $50 50% Table games drop decreased 1.7% to $288 m
Slide 31: Geographically Diverse Sources of EBITDA
Geographically Diverse Sources of EBITDA EBITDA Contribution by Geography in 3Q 2018 ($ in millions) LVS Consolidated Adjusted Property EBITDA1 LVS Consolidated Hold‐Normalized Adj. Prop. EBITDA1 $1,282M $1,270M United United States States 8% 10% Singapore Singapore 33% 31% Macao Macao 59% 59% 1. Th
Slide 32: Disciplined Execution of Our Global Growth Strategy
Disciplined Execution of Our Global Growth Strategy Focused on the Most Promising Global Development Opportunities Uniquely positioned to bring our unmatched track record and powerful convention‐based business model to the world’s most promising Integrated Resort development opportunities Balanc
Slide 33: Appendix
Appendix Sanes LAS VEGAS SANDS CORP.
Slide 34: Historical Hold-Normalized Adj. Property EBITDA
Historical Hold‐Normalized Adj. Property EBITDA1 ($ in millions) 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Macao Operations2 Reported $ 626 $ 600 $ 651 $ 730 $ 789 $ 750 $ 754 Hold‐Normalized $ 594 $ 597 $ 641 $ 757 $ 767 $ 730 $ 754 Marina Bay Sands Reported $ 364 $ 492 $ 442 $ 457 $ 541 $ 368 $ 419 Hold‐
Slide 35: Debt Maturity Profile
Debt Maturity Profile Debt Maturity by Year1 ($ in millions) $6,000 $5,074 $5,000 $4,000 $3,680 3,274 $3,000 1,845 $1,900 $2,000 $1,000 1,800 1,800 1,900 $520 $598 $25 $111 $99 $99 563 $0 $0 485 $0 2 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 SCL MBS US % of Total 0% 1% 1% 1% 4% 30% 5% 4
Slide 36: Market-Leading ~$15 Billion of Investment in Macao's Future
Market‐Leading ~$15 Billion of Investment in Macao’s Future as a Leisure & Business Tourism Destination Portfolio of Family-friendly World-Class Entertainment and ~13,000 Suites and Hotel Rooms Entertainment Events for Chinese Consumers ~1.9 Million sq. feet of World Class Shopping The Broadest Addi
Slide 37: Macao Visitation Opportunity
Macao Visitation Opportunity Business & Leisure Tourism Expenditure Drivers Future Growth Drivers As a result, Macao’s Mass visitors will: More efficient and affordable Come From Farther transportation infrastructure Away Greater number of hotel rooms Stay Longer and non‐gaming offerings in
Slide 38: Supplemental Information 3Q18 and 3Q17
Supplemental Information 3Q18 and 3Q17 ($ in millions) Three Months Ended September 30, 2018 Amortization Loss on Pre-Opening Depreciation of Leasehold Disposal or and Adjusted Operating and Interests Impairment Development Royalty Stock-Based Corporate Property Income (Loss) Amortization in Land of
Slide 39: Supplemental Information YTD 3Q18 and YTD 3Q17
Supplemental Information YTD 3Q18 and YTD 3Q17 ($ in millions) Nine Months Ended September 30, 2018 Amortization Loss on Pre-Opening Depreciation of Leasehold Disposal or and Adjusted Operating and Interests Impairment Development Royalty Stock-Based Corporate Property Income (Loss) Amortization in
Slide 40: Macao Market Background and Infrastructure Slides
Macao Market Background and Infrastructure Slides
Slide 41: Mass Gaming Generates Over 80% of Gaming Operating Profit in Macao
Mass Gaming Generates Over 80% of Gaming Operating Profit in Macao Composition of Macao Market Gross Gaming Revenue1 and Est. Gaming Operating Profit2 Quarter Ended September 30, 2018 TTM Ended September 30, 2018 ($ in millions) ($ in millions) $9,108M $2,374M $36,540M $9,468M 100% 100% 18% 18% 80%
Slide 42: Five Trends Supporting Growth in the Macao Market in the Future
Five Trends Supporting Growth in the Macao Market in the Future 260 million tourists are expected to travel outside of China by 2025, up from 1 135 million in 2016. Chinese tourism expenditures are expected to increase from $261 billion in 2016 to $672 billion by 2025 Transportation infrastructure a
Slide 43: China Is The World's Largest and Fastest Growing Outbound Tourism Market
1 China Is The World’s Largest and Fastest Growing Outbound Tourism Market Outbound Travel Tourism Spending ($ in billions) $700 $672 $600 $500 +$411 Billion in Incremental Spend $400 $300 $261 $200 $100 $0 2016 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E Outbound Chinese Tourism Spend is
Slide 44: China Is The World's Largest and Fastest Growing Outbound Tourism Market (cont.d)
1 China Is The World’s Largest and Fastest Growing Outbound Tourism Market (cont.d) Number of Outbound Travel Trips from China (Trips in millions) 300 260 250 200 150 135 100 50 0 2016 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E In the Next 10 Years Outbound Travel From China is Projected
Slide 45: Strong Growth in Chinese Outbound Tourism
1 Strong Growth in Chinese Outbound Tourism Chinese Outbound Tourism to Select Markets 2010‐2017 CAGR +18% +17% +12% +12% +15% +22% +8% +12% +27% +37% +8% +10% (in millions) 50.0 44.4 40.0 30.0 22.2 22.7 20.0 13.2 10.0 10.0 7.4 4.2 2.5 3.2 3.2 2.8 1.3 1.5 2.0 1.1 1.2 1.6 1.9 1.4 1.1 0.4 0.5 0.9 0.8
Slide 46: Chinese Middle Class Consumption Growth
1 Chinese Middle Class Consumption Growth Chinese Middle Class Consumption in 2030 is Projected to Reach $10.0 trillion Global Middle Class Consumption in 2030 (US$ in Trillions) ($ in trillions) $15 $10.0 $10 $5 $4.0 $2.3 $2.5 $1.1 $1.2 $1.2 $1.3 $1.4 $‐ France Brazil Mexico Germany Russia Japan In
Slide 47: Infrastructure: China's High-Speed Rail
2 Infrastructure: China’s High‐Speed Rail Connecting More of Mainland China to Macao Beijing – Guangzhou High‐Speed Rail World’s longest high‐speed rail route Covers 2,298km in ~10 hours (compared to 22 hours previously) Provides seamless connection from Guangzhou – Zhuhai Intercity Rail North
Slide 48: Infrastructure: Meaningful Improvements Throughout the Pearl River Delta Region
Infrastructure: Meaningful Improvements 2 Throughout the Pearl River Delta Region Guangzhou Population: 16M Wuhan – Guangzhou High‐Speed Rail GDP Per Capita: US$20,000 • Four hour train ride • 50‐60 trains in each direction per day Guangzhou – Zhuhai Intercity Rail Guangzhou – Shenzhen – Hong Kong R
Slide 49: The Hong Kong-Macao-Zhuhai Bridge
2 The Hong Kong‐Macao‐Zhuhai Bridge $20 Billion Bridge Linking the Pearl River Delta An Opening Ceremony with Xi Jinping in attendance was held on October 23, 2018, and the bridge opened for traffic on October 24, 2018 Prior to project completion, no roads directly connected Zhuhai and Macao wit
Slide 50: Market Leading Hotel Capacity at SCL
3 Market Leading Hotel Capacity at SCL Projected Macao Market 4/5 Star Hotel Rooms at December 31, 2020 Projected Macao Market Gaming Operator Hotel Rooms at December 31, 20201 Cotai Total Market New Development % of Gaming % of Gaming % of Total 16,000 Gaming Operator Rooms Operators Rooms Operator
Slide 51: Overnight Visitation to Macao Is Growing Faster Than and Now Exceeds Day-trip Visitation
Overnight Visitation to Macao Is Growing 4 Faster Than and Now Exceeds “Day‐trip” Visitation Day‐Trip Visitors to Macao from China Overnight Visitors to Macao from China (in millions) (in millions) 14.0 14.0 12.0 11.5 11.9 11.2 12.0 10.2 10.3 10.3 10.0 9.7 9.8 10.0 9.7 8.8 8.8 9.2 8.4 8.9 8.6 8.1 8.
Slide 52: The Greater Bay Area Initiative
5 The Greater Bay Area Initiative Promoting the Economic Growth of The Pearl River Delta The Greater Bay Area (“GBA”) initiative was officially presented during the 12th National Peoples Congress in March 2017 The GBA initiative promotes the development of the Pearl River Delta region via econom
Slide 53: Hengqin Island Expands Critical Mass of Tourism Offerings for Visitors to the Region
Hengqin Island Expands Critical Mass of 5 Tourism Offerings for Visitors to the Region Map of Hengqin Island New Area Important Facts Island adjacent to Macao (3X the size of Macao) that has been identified as a strategic zone for cooperation among Guangdong Province, Hong Kong and Macao Master‐
Slide 54: Non-GAAP Measures Reconciliations
Non‐GAAP Measures Reconciliations
Slide 55: Reconciliation of Net Income to Consolidated Adjusted Property EBITDA
Reconciliation of Net Income to Consolidated Adjusted Property EBITDA ($ in millions) 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Net income $ 579 $ 639 $ 684 $ 1,361 $ 1,616 $ 676 $ 699 Add (deduct): Income tax expense (benefit) 69 78 73 (429) (571) 81 83 Loss on modification or early retirement of debt 5 -
Slide 56: Non-GAAP Measures: Adjusted Net Income and Adjusted Earnings Per Diluted Share
Non‐GAAP Measures: Adjusted Net Income; Hold‐Normalized Adjusted Net Income; Adjusted Earnings Per Diluted Share; and Hold‐Normalized Adjusted Earnings Per Diluted Share ($ in millions) Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Net income attributable to LV
Slide 57: Non-GAAP Trailing Twelve Month Supplemental Schedule
Non‐GAAP Trailing Twelve Month Supplemental Schedule ($ in millions) 3Q17 4Q17 1Q18 2Q18 3Q18 TTM 3Q18 Cash Flows From Operations $ 1,113 $ 1,321 $ 1,397 $ 1,107 $ 896 $ 4,721 Adjust for: (Provision for) recovery of doubtful accounts (23) (19) 16 (7) (5) (15) Foreign exchange gains (losses) (15) (15
Slide 58: Historical Hold-Normalized Adj. Property EBITDA
Historical Hold‐Normalized Adj. Property EBITDA1 ($ in millions) 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 2 Macao Operations Reported $ 626 $ 600 $ 651 $ 730 $ 789 $ 750 $ 754 Hold‐Normalized Adjustment (32) (3) (10) 27 (22) (20) ‐ Hold‐Normalized $ 594 $ 597 $ 641 $ 757 $ 767 $ 730 $ 754 Marina Bay Sands
Slide 59: 3Q18 Hold-Normalized Net Revenue
3Q18 Hold‐Normalized Net Revenue ($ in millions) 3Q18 3Q17 % Change Net Revenue As Reported $3,372 $3,161 6.7% Revenue Hold‐Adjustment (16) (13) Hold‐Normalized Net Revenue 3,356 3,148 6.6% 1. This schedule presents hold‐normalized Net Revenue based on the following methodology: ‐ for Macao Operatio
Slide 60: Sands
Sands LAS VEGAS SANDS CORP,