Kangwon Land, Inc. · KRX:035250
Kangwon Land — Investor Presentation (November 2004)
18 slides from Kangwon Land's investor presentation, November 2004
Slide 1: IR Presentation
IR Presentation November, 2004
Slide 2: Contents
Contents Company Overview Growth Drivers Key Financials Future Outlook
Slide 3: Company Overview: History
Company Overview History History Facilities Facilities Highlights Performance Shareholder ShareholdingStructure Structure Only casino open to domestics 1995 1998 2000 2001 2003 • Special laws on •Kangwon Land • Small casino •KOSDAQ • Main casino development of coal established opened listing opened
Slide 4: Company Overview: Facilities
Company Overview History History Facilities Facilities Highlights Performance Shareholder ShareholdingStructure Structure Business Structure Sales Structure Casino 132 Tables (6 types of games) Hotel 2% - General floor 112 tables, VIP floor 20 tables 960 Slot Machines (12 types of games) Casino 98%
Slide 5: Company Overview: Highlights and Performance
Company Overview History History Facilities Facilities Highlights Performance Shareholder ShareholdingStructure Structure Unit: Billion KRW Sales Operating Margin 677 Main Casino Operating Margin Ratio opened 462 476 332 303 298 Small Casino 91 44.6 opened (49.1 %) (65.5 %) (62.6 %) (48.9 %) Highest
Slide 6: Company Overview: Shareholding Structure
Company Overview History History Facilities Facilities Highlights Performance Shareholder ShareholdingStructure Structure Shareholding Structure Trend of shareholders Foreign investors Dom. Retail Dom. institutions 27.7% Foreigners 19.2% 27.7 % Dom. retail 19.2 % 1.7% Dom. instit. 1.7 % Treasury 0.4
Slide 7: Growth Drivers: Expansion
Growth Drivers Expansion Golf Course Ski resort Catalysts KL going forward.. 2003 2004 2005 2006 2007 World Class Resort Today •2nd phase expansion Growing into Casino Resort • 1st phase expansion - construction of new casino annex • 32 Tables added Main Casino • Casino/Hotel • Theme Park Main Casin
Slide 8: Growth Drivers: Golf Course
Growth Drivers Expansion Golf course Ski resort Catalysts Key figures - Capex: W85bn (incl. W20bn land purchase) - Completion date: July 2005 - Land area: 267 acres - Course: 18 holes (7,109 yard, Par 72 ) Features - Highest elevation course in Korea (1,150 m) - Outsourcing for course management Gol
Slide 9: Growth Drivers: Ski Resort
Growth Drivers Expansion Golf course Ski resort Catalysts Key figures - Capex: W308bn (incl. 403 Condo rooms) - Completion date: Dec 2006 - Land area: 1,200 acres - Slopes: 18 slopes (21Km of slopes, longest slope of 4.3Km) Features: First integrated ski village - SKI In & Out System (connected to c
Slide 10: Growth Drivers: Proximity to Seoul
Growth Drivers Expansion Golf course Ski resort Catalysts Proximity to Seoul Construction of Route 38 - Construction to be completed by 2008 - Total cost of W3tn (funded by federal government) - Increase in day-trip visitors and repeat visitors 41Km 39Km 54Km Jaechun Samchuk Youngweol KL I.C End of
Slide 11: Growth Potential of Slot Machines
Growth Drivers Expansion Golf course Ski resort Catalysts Growth Potential of Slot Machines - Current capacity utilization of 55% (high) - Higher hold ratio, lower labor cost Vs Table games - Shift towards global trend at integrated casino resorts 1990’ 1990’ s 2000’ 2000’ s 2004 2007~ Slots as % 52
Slide 12: Key Financials: Income Statement
Key Financials Income statement Balance sheet CAPEX Visitors (Krw Bn) 3Q2004 FY2003 FY2002 Sales 574 677 476 Costs 234 263 117 Labor 47 39 25 Depreciation 17 16 6 Tourism Tax 55 65 46 Cost 76 91 12 Others 39 52 28 SG&A Exp 53 82 61 Labor 12 16 12 Depreciation 2 3 2 Mining Tax 29 33 31 Others 10 30 1
Slide 13: Key Financials: Balance Sheet
Key Financials Income statement Balance sheet CAPEX Visitors (Krw Bn) 3Q2004 FY2003 FY2002 Current Asset 503 400 363 Cash & Equivalents 38 90 43 Financial Goods 457 305 308 Others 8 5 12 Fixed Asset 708 678 460 Tangible Asset 631 615 414 Others 77 63 46 Total Asset 1,211 1,078 823 Current Liabilitie
Slide 14: Key Financials: CAPEX
Key Financials Income statement Balance sheet CAPEX Visitors Up to 2002 2003 2004 2005 Total W464bn W257bn W280bn W316bn W1,361bn Main Casino Main Casino Ski Resort Ski Resort (Unit: billion krw) 238 120 75 197 Small Casino Golf Course Golf Course Land Purchase 60 20 45 37 Golf Cou
Slide 15: Key Financials: Visitors
Key Financials Income statement Balance sheet CAPEX Visitors Unit: Thousand VIP 2.5% Foreigner 1.7% Opening 1,545 Local 95.8% Main Casino • For 2006, we expect the opening of the ski resort and golf resort to increase 900 920 visitors dramatically by 600k • In addition, the growth of foreign visitor
Slide 16: Future Outlook: Revenues
Future Outlook Revenues Taxation Shareholder Value Revenue outlook (Unit : %) Korean gaming market growth rate vs. GDP growth rate 62.3 49.4 29.8 22.9 20.7 Gaming Market 10.9 9.3 3.1 6.3 2.9 Korean GDP 1H 2003 revenue vs. 1H 2004 VS Lotto Horse racing Cycling KL 27.4% 6.1% 22.1% 22.3%
Slide 17: Future Outlook: Taxation
Future Outlook Revenues Taxation Shareholder Value Timing of tax hike: hike ‘….Special area tax to increase to 20% 5 years from ….’ 2000~2003 2004 2005 ~ 10% of casino revenue Fixed 29.7% 29.7% 27.5% 10% of EBT 10% of EBT 20% - 2 scenarios for timing of tax hike decided within 2004 Effective Jan 200
Slide 18: Future Outlook: Shareholder Value
Future Outlook Revenues Taxation Shareholder Value Dividends PR for regulations Dividend Yield (%) - Improving image of casinos 35( ) 4 * Gambling addiction center 3 27.7 * Sponsorship of Ski/Ice Hockey team ? 20 2 320 10.5 227 1 132 - Focus on better PR to reduce Dividend payout (%) regulatory risk