Star Entertainment Group Limited · ASX:SGR
Star Entertainment — FY2022 Earnings Presentation
34 slides from Star Entertainment's earnings presentation, Aug 22, 2022
Slide 1: ASX Announcement
ASX Announcement 22 August 2022 FY2022 PRELIMINARY UNAUDITED FULL YEAR RESULTS PRESENTATION Attached is the presentation regarding the preliminary unaudited financial results of The Star Entertainment Group Limited (The Star) for the year ended 30 June 2022, to be presented by Ben Heap (Interim Chai
Slide 2: FY2022 Results Presentation
THE STAR ENTERTAINMENT GROUP FY2022 RESULTS PRESENTATION MONDAY 22 AUGUST 2022
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 2. FINANCIALS 3. PRIORITIES 4. Q&A 3
Slide 5: FY2022 Performance
OVERVIEW FY2022 PERFORMANCE1 COVID-IMPACTED FY2022* 1H FY2022 2H FY2022 EARNINGS, SOLID 4Q FY2022 Normalised EBITDA $237m $29m $208m NPAT/ (loss) ($32m) ($74m) $42m Statutory EBITDA $239m $31m $208m NPAT/ (loss) ($199m2) ($74m) ($125m) ♦ COVID-related property closures and operating restrictions imp
Slide 6: FY2022 Performance
OVERVIEW FY2022 PERFORMANCE1 ♦ COVID-related impacts 1H FY2022 and 3Q FY2022 GAMING REVENUE VS PRE-COVID LEVELS ♦ EGM revenue substantially above pre-COVID levels since March 2022 THE STAR GROUP GAMING REVENUE RELATIVE TO PRE-COVID LEVELS (28 DAY ROLLING AVERAGE) 50.0% FY22 H1 FY22 H2 FY23 25.0% 0.0
Slide 7: Trading Update
OVERVIEW TRADING UPDATE ♦ Revenue trends from 4Q FY2022 have continued into early 1H FY2023 trading EARLY 1H FY2023 TRADING POSITIVE ♦ Over 1 July to 18 August 2022, Group domestic revenue is up 9% on pre-COVID levels (1 July to 18 August 2019) ♦ Sydney domestic revenue is in-line with pre-COVID lev
Slide 8: Regulatory Review and Litigation Update
OVERVIEW REGULATORY REVIEW AND LITIGATION UPDATE1 ♦ Provision of report to ILGA expected by 31 August 2022 BELL REVIEW ♦ Terms of reference released 30 June 2022, led by the Honourable Robert Gotterson AO GOTTERSON REVIEW ♦ Public hearings to commence 23 August 2022 ♦ Report to the Attorney-General
Slide 9: Renewal Program — Our Commitment to Change
OVERVIEW RENEWAL PROGRAM — OUR COMMITMENT TO CHANGE ♦ The Star is fully committed to addressing past issues and earning back the trust of our BACKGROUND stakeholders. That is why we initiated a Renewal Program focused around a series of significant governance, culture & controls reforms ♦ These refo
Slide 10: Renewal Program — Status
OVERVIEW RENEWAL PROGRAM — STATUS ♦ Appointment of Ben Heap as interim Chairman and Michael Issenberg, Anne Ward and David COMPLETED PRIORITY ACTIONS Foster as new non-executive directors ♦ Appointment of Robbie Cooke as MD and CEO and Scott Wharton as CEO The Star Sydney and Group Head of Transform
Slide 11: Sydney
OVERVIEW SYDNEY1 ♦ Earnings were impacted by the closure of the property for 102 days, operating restrictions EARNINGS IMPACTED BY COVID-19 and other COVID-19 related impacts ♦ In the 12 months to June, normalised EBITDA of $82m was down 60% on pcp ♦ Domestic revenue was down 5%; non-gaming revenue
Slide 12: Gold Coast
OVERVIEW GOLD COAST1 ♦ In the 12 months to June, domestic revenue was up 11% on pcp; non-gaming revenue was EARNINGS IMPACTED BY up 50% and normalised EBITDA of $90m was down 20% on pcp COVID-19 ♦ Earnings impacted by the closure of the property for 11 days, operating restrictions, border closures a
Slide 13: The Dorsett Gold Coast and The Star Residences
OVERVIEW THE DORSETT GOLD COAST AND THE STAR RESIDENCES ISOLETTO POOL CLUB AND ISOLETTO PRIVÉ DECK DORSETT GOLD COAST AND THE STAR RESIDENCES – TOWER 1 THE STAR RESIDENCES POOL AND RECREATION DECK 12
Slide 14: Brisbane
OVERVIEW BRISBANE1 ♦ In the 12 months to June, domestic revenue was down 6%, normalised EBITDA of $65m was EARNINGS IMPACTED BY down 43% on pcp COVID-19 ♦ Earnings impacted by the closure of the property for 12 days, operating restrictions, floods and other COVID-19 related impacts ♦ Performance imp
Slide 15: Agenda
THE STAR ENTERTAINMENT GROUP AGENDA 1. OVERVIEW 2. FINANCIALS 3. PRIORITIES 4. Q&A 14
Slide 16: Group Overview
FINANCIALS GROUP OVERVIEW1 ♦ Normalised Group revenue $1,532m, EBITDA $237m and net loss $32m* FINANCIAL OVERVIEW ♦ Operating expenses up 14%* on pcp to $909m ♦ Operating costs reflect COVID-19 related impacts, the tight labour market, the increased footprint, inflationary pressures, regulatory revi
Slide 17: Operating Expenses
FINANCIALS OPERATING EXPENSES1 ♦ COVID-19 resulted in a number of operating cost challenges: OPERATING COSTS • Direct COVID-19 related costs - compliance, cleaning, staff absenteeism, sick leave • Labour market supply challenges - overtime, labour mix • Supply chain pressures on cost of goods and se
Slide 18: Capex
FINANCIALS CAPEX ♦ Capex of $141m, within the guidance range of $125-150m and well below depreciation and GROUP CAPEX amortisation expense of $208m ♦ FY2023 expected capex is ~$150m, down from prior guidance of ~$175m ♦ FY2023 expected D&A expense of ~$200-205m ♦ Expected net funding costs $60-65m i
Slide 19: Profit and Loss — FY2022
FINANCIALS PROFIT AND LOSS — FY20226 FY2022 FY2021 FY2022 FY2021 2 $M fav/(unfav) 2 2 2 2 fav/(unfav) STATUTORY STATUTORY NORMALISED NORMALISED Domestic Gaming revenue 1,289.5 1,363.8 (5.4%) 1,289.5 1,363.8 (5.4%) International VIP Rebate 5.5 9.5 (42.1%) 2.9 13.5 (78.5%) Non-gaming and other revenue
Slide 20: Balance Sheet
FINANCIALS BALANCE SHEET3 $M JUN 2022 JUN 20211 ♦ Capital programs progressed ASSETS Current Assets • Property, plant and equipment declined with capex below Cash and cash equivalents 82.0 67.9 depreciation Trade and other receivables 18.0 23.3 Inventories 16.2 15.2 • Investment in associates and JV
Slide 21: Agenda
THE STAR ENTERTAINMENT GROUP AGENDA 1. OVERVIEW 2. FINANCIALS 3. PRIORITIES 4. Q&A 20
Slide 22: Priorities for the Year Ahead
PRIORITIES PRIORITIES FOR THE YEAR AHEAD RENEWAL & ♦ Commitment to demonstrating suitability to hold casino licences in NSW and QLD 1 TRANSFORMATION ♦ Progress Renewal Program ♦ Complete new senior executive and Board appointments ♦ Address outcomes of the Bell and Gotterson Reviews ♦ NSW and Qld le
Slide 23: Sydney
PRIORITIES SYDNEY DEVELOPMENT OPPORTUNITIES ♦ A number of development opportunities post finalisation of the new planning controls for the Pyrmont Peninsula ♦ Pathway to DA process for 105m six-star hotel, theatres, new rooftop dining area and event space ♦ New Sydney Metro West Station proposed, ad
Slide 24: Sydney
PRIORITIES SYDNEY TABLE GAMES COMPETITIVE ADVANTAGE 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 ♦ Main floor provides
Slide 25: Gold Coast
PRIORITIES GOLD COAST TOWER 1 COMPLETE, TOWER 2 UNDERWAY ♦ Opened the Dorsett Gold Coast Hotel and The Star Residences during the year ♦ The hotel is performing above forecast levels given higher than expected occupancy and rate ♦ Settled in excess of 90% of the apartments ♦ Construction of Tower 2
Slide 26: Queen's Wharf Brisbane
PRIORITIES QUEEN’S WHARF BRISBANE OPENING FROM 2H CY2023 ♦ Anticipated to open from 2H CY2023 ♦ Total project costs are expected to be up ~10% on prior guidance of $2.6bn ♦ Majority of cost over-run to be funded via additional equity contributions in accordance with the existing JV interests (The St
Slide 27: Agenda
THE STAR ENTERTAINMENT GROUP AGENDA 1. OVERVIEW 2. FINANCIALS 3. PRIORITIES 4. Q&A 26
Slide 28: Key Sustainability Metrics
APPENDIX KEY SUSTAINABILITY METRICS SUSTAINABILITY >90% portfolio with environmental Third TCFD aligned Climate-related ratings, (Green Star, NABERS, Disclosures report released AND ENVIRONMENTAL EarthCheck) Green Star Performance Ratings achieved – The Star Sydney and The Star Gold Coast. Committed
Slide 29: Statutory Results — FY2022
APPENDIX STATUTORY RESULTS — FY20221 SYDNEY GOLD COAST BRISBANE TOTAL $M FY2022 FY2021 fav/(unfav) FY2022 FY2021 fav/(unfav) FY2022 FY2021 fav/(unfav) FY2022 FY2021 fav/(unfav) Slots 261.4 277.7 (5.9%) 214.3 203.9 5.1% 168.1 173.8 (3.3%) 643.8 655.4 (1.8%) Domestic Tables 418.2 458.1 (8.7%) 96.0 100
Slide 30: Normalised Results — FY2022
APPENDIX NORMALISED RESULTS — FY20221 SYDNEY GOLD COAST BRISBANE TOTAL $M FY2022 FY2021 fav/(unfav) FY2022 FY2021 fav/(unfav) FY2022 FY2021 fav/(unfav) FY2022 FY2021 fav/(unfav) Slots 261.4 277.7 (5.9%) 214.3 203.9 5.1% 168.1 173.8 (3.3%) 643.8 655.4 (1.8%) Domestic Tables 418.2 458.1 (8.7%) 96.0 10
Slide 31: Operational Metrics
APPENDIX OPERATIONAL METRICS SYDNEY GOLD COAST BRISBANE OPERATIONAL METRICS FY2022 FY2021 fav/(unfav) FY2022 FY2021 fav/(unfav) FY2022 FY2021 fav/(unfav) Slots Revenue ($m) 261 278 (5.9%) 214 204 5.1% 168 174 (3.3%) NMR/machine/day 484 539 (10.2%) 410 373 9.9% 341 322 5.8% MTGMs Revenue ($m) 64 76 (
Slide 32: Cash Conversion and Funding
APPENDIX CASH CONVERSION AND FUNDING2 CATEGORY JUN 2022 JUN 2021 $M CASH CONVERSION Cash flows from operating activities before interest and income tax Net cash receipts in the course of operations 1,665.9 1,689.7 Payments to suppliers, service providers and employees (1,112.9) (995.9) Payment of go
Slide 33: Glossary
APPENDIX GLOSSARY TERM DEFINITION AML/CTF Anti-Money Laundering and Counter-Terrorism Financing AUSTRAC Australian Transaction Reports and Analysis Centre CAGR Compound Annual Growth Rate Capital expenditure (capex) Unless otherwise stated, capital expenditure is presented on an accruals basis and e
Slide 34: The Star Entertainment Group
THE STAR ENTERTAINMENT GROUP
Star Entertainment Group — FY2022 Earnings Presentation on 6ix