Star Entertainment Group Limited · ASX:SGR
Star Entertainment — The Star Entertainment Group — H1 FY2018 Earnings Presentation
39 slides from Star Entertainment's earnings presentation, Feb 16, 2018
Slide 1: ASX Announcement: Half Year Results Presentation
ASX Announcement For personal use only 16 February 2018 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 2017, to be presented by Matt Bekier, Managin
Slide 2: Half Year 2018 Results Presentation
For personal use only THE STAR ENTERTAINMENT GROUP HALF YEAR 2018 RESULTS PRESENTATION FRIDAY 16 FEBRUARY 2018
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
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
Slide 5: Half Year 2018 Highlights
OVERVIEW HALF YEAR 2018 HIGHLIGHTS SOLID FINANCIAL RESULTS For personal use only NORMALISED STATUTORY Vs pcp Vs pcp Gross Revenue $1,360m 15.9% $1,271m 3.3% EBITDA $280m 11.8% $200m (33.6%) NPAT $120m 12.4% $33m (76.8%) ♦ Record half year Gross Revenue ♦ Statutory results impacted by low actual Inte
Slide 6: Key Drivers of Half Year 2018 Results
OVERVIEW KEY DRIVERS OF HALF YEAR 2018 RESULTS $m For personal use only 450 135.0 118.3 400 +11.8% 350 on pcp 38.3 300.4 49.8 27.7 300 280.2 80.6 23.5 -33.6% 250.6 on pcp 250 199.6 200 150 100 50 0 1H FY2017 International 1H FY2017 Sydney Queensland International Gaming taxes, Operating 1H FY2018 In
Slide 7: Key Drivers – Sydney
OVERVIEW KEY DRIVERS – SYDNEY ♦ Normalised gross revenue of $959m (up 19.3% on pcp) and EBITDA* of $191m (up 22.4% on pcp) For personal use only ♦ Statutory gross revenue of $866m (up 3.0% on pcp) and EBITDA* of $108m (down 42.8% on pcp), impacted by low actual International VIP Rebate business win
Slide 8: Key Drivers – Queensland
OVERVIEW KEY DRIVERS – QUEENSLAND ♦ Normalised gross revenue of $401m (up 8.5% on pcp) and EBITDA* of $89m (down 5.8% on pcp) For personal use only ♦ Statutory gross revenue of $405m (up 3.8% on pcp) and EBITDA* of $92m (down 18.0% on pcp) ♦ Queensland delivered revenue growth on pcp across all busi
Slide 9: Key Drivers – Gold Coast Investments
OVERVIEW KEY DRIVERS – GOLD COAST INVESTMENTS ♦ Strong and broad-based Gold Coast revenue performance in For personal use only 1H FY2018 reflect positive response by customers to property investments ♦ The Darling Gold Coast opening and MGF expansion proceeding to plan • Part of MGF expansion and ne
Slide 10: Gold Coast – Works Delivered
OVERVIEW GOLD COAST – WORKS DELIVERED BEFORE AFTER For personal use only Jupiters Hotel & Casino The Star Gold Coast BEFORE AFTER J Bar Cherry Bar 9
Slide 11: Gold Coast – Works Delivered
OVERVIEW GOLD COAST – WORKS DELIVERED BEFORE AFTER For personal use only Spinners M&G Café and Bar BEFORE AFTER PA Garden Kitchen & Bar 10
Slide 12: Gold Coast – Works Delivered
OVERVIEW GOLD COAST – WORKS DELIVERED BEFORE AFTER For personal use only Old Atrium Bar New Atrium Bar BEFORE AFTER Bite Food Quarter 11
Slide 13: Gold Coast – Works Completing End March 2018
OVERVIEW GOLD COAST – WORKS COMPLETING END MARCH 2018 For personal use only The Darling – Concept image only Sports Bar & Terrace – Concept Image Only Sports Bar & Terrace – Concept Image Only * Subject to planning and other approvals 12
Slide 14: EGM Market Share
OVERVIEW EGM MARKET SHARE SYDNEY SYDNEY – ROLLING Sydney 12Month - Rolling 12 MONTH AVERAGE Average For personal use only ♦ Market share has increased 10% ♦ 2Q FY2018 market share of 9% 9.3%, up on 2Q FY2017 of 9.0% 8% 7% GOLD Gold Coast– -ROLLING COAST 12Month Rolling 12 MONTH AVERAGE Average QUEEN
Slide 15: Key Drivers – International VIP Rebate Business
OVERVIEW KEY DRIVERS – INTERNATIONAL VIP REBATE BUSINESS ♦ Strong growth from all customer segments as INTERNATIONAL VIP REBATE BUSINESS FRONT MONEY ($M) For personal use only market conditions return to normal. Diversification 2,500 23.1% CAGR effective with continued higher growth from Other 2,000
Slide 16: 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 15
Slide 17: Profit and Loss
FINANCIALS PROFIT AND LOSS 1H FY2018 1H FY2017 1H FY2018 1H FY2017 $M fav/(unfav) fav/(unfav) For personal use only STATUTORY STATUTORY NORMALISED 2 NORMALISED 2 Domestic Gaming Revenue 796.8 763.1 4.4% 796.8 763.1 4.4% International VIP Rebate (Gross) 328.5 339.4 (3.2%) 418.1 283.1 47.7% Non-gaming
Slide 18: Balance Sheet
FINANCIALS BALANCE SHEET $M DECEMBER 2017 JUNE 2017 DECEMBER 2016 ♦ Cash conversion of EBITDA increased to ASSETS For personal use only Current Assets 129% due to timing of working capital Cash and cash equivalents 188.6 113.7 195.7 payments (96% in 1H FY2017) Trade and other receivables 258.3 192.7
Slide 19: Funding
FINANCIALS FUNDING ♦ SGR successfully restructured its USPP notes and related hedges in early 1H FY2018 to increase overall debt tenor by For personal use only almost 3 years and reduce interest expenses ♦ Undrawn bank facilities have increased to $250m and average drawn debt maturity of 4.2 years a
Slide 20: Capital Expenditure
FINANCIALS CAPITAL EXPENDITURE ♦ 1H FY2018 capital expenditure of $282m ($191m growth, $91m maintenance (which includes aircraft purchase)), up $66m on For personal use only pcp primarily due to capital works at The Darling Gold Coast ♦ FY2018 capital expenditure of $450-480m expected as projects pr
Slide 21: Key Metrics
FINANCIALS KEY METRICS STATUTORY GROSS Statutory Gross REVENUE Revenue ($m) ($M) STATUTORY Statutory NPATNPAT ($m) ($M) EARNINGS Earnings PER SHARE Per Share - STATUTORY - Statutory (cents) (CENTS) For personal use only 1,500.0 CAGR 9.0% 150.0 CAGR -8.1% 20.0 CAGR -8.1% 1,250.0 125.0 17.5 15.0 1,000
Slide 22: 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 21
Slide 23: 2H FY2018 Priorities and Trading Update
OUTLOOK AND PRIORITIES 2H FY2018 PRIORITIES AND TRADING UPDATE ♦ 2H FY2018 priorities remain focused on executing previously disclosed long-term strategy: For personal use only 1. Improve earnings across the Group ‒ Sustain domestic growth through capital development program ‒ Continue diversificati
Slide 24: Destinational Integrated Resorts Overview
OUTLOOK AND PRIORITIES DESTINATIONAL INTEGRATED RESORTS OVERVIEW THE STAR SYDNEY THE STAR GOLD COAST QUEEN’S WHARF BRISBANE* For personal use only Concept image only Concept image only Concept image only Expand property to: Expand property to: New integrated resort with: ♦ ~1,000 premium hotel rooms
Slide 25: Sydney – Developments
OUTLOOK AND PRIORITIES SYDNEY – DEVELOPMENTS ♦ Received development approval for upgrade and expansion For personal use only of Sovereign Resort • Works to commence 2H FY2018 for completion in late FY2020 • Requires temporary relocation of existing Sovereign Resort • Capital expenditure of ~$220m ov
Slide 26: Sydney – Works in Progress/Planning
OUTLOOK AND PRIORITIES SYDNEY – WORKS IN PROGRESS/ PLANNING For personal use only Sovereign Dining Entry – Concept Image Only Sovereign Bar – Concept Image Only Astral Porte Cochere and Lobby – Concept Image Only The Ritz-Carlton Joint Venture Tower – Concept image only 25
Slide 27: Gold Coast – Developments and Masterplan
OUTLOOK AND PRIORITIES GOLD COAST – DEVELOPMENTS AND MASTERPLAN ♦ Presales for new JV hotel and apartment tower progressing For personal use only well, on track to achieve targets for external funding. Construction expected to commence early 1H FY2019 with ~3 year construction period ♦ Tower develop
Slide 28: Gold Coast – Works in Progress (JV Tower)
OUTLOOK AND PRIORITIES GOLD COAST – WORKS IN PROGRESS (JV TOWER) For personal use only New JV Tower – Concept Image Only New JV Tower – Concept Image Only New JV Tower Apartment Bedroom – Concept Image Only 27
Slide 29: Queen's Wharf Brisbane
OUTLOOK AND PRIORITIES QUEEN’S WHARF BRISBANE ♦ Current works progressing well June 2017 For personal use only • Demolition work complete 3Q FY2018 • Excavation contractors appointed, work commence 3Q FY2018 ♦ Development approval received for Integrated Resort (including public realm). Approval pro
Slide 30: 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 29
Slide 31: Appendix
THE STAR ENTERTAINMENT GROUP APPENDIX Sydney and Queensland Results – Statutory 31 For personal use only Sydney and Queensland Results – Normalised 32 Operational Metrics 33 International VIP Rebate Business Normalisation 34 International VIP Rebate Business Receivables 35 Cash Conversion 36 Glossar
Slide 32: Sydney and Queensland Results – Statutory
APPENDIX SYDNEY AND QUEENSLAND RESULTS – STATUTORY SYDNEY QUEENSLAND TOTAL $M For personal use only 1H FY2018 1H FY2017 fav/(unfav) 1H FY2018 1H FY2017 fav/(unfav) 1H FY2018 1H FY2017 fav/(unfav) Slots 164.3 155.6 5.6% 164.9 157.7 4.6% 329.3 313.3 5.1% Domestic Tables 342.9 337.9 1.5% 124.7 111.9 11
Slide 33: Sydney and Queensland Results – Normalised
APPENDIX SYDNEY AND QUEENSLAND RESULTS – NORMALISED SYDNEY QUEENSLAND TOTAL $M 1H FY2018 1H FY2017 fav/(unfav) 1H FY2018 1H FY2017 fav/(unfav) 1H FY2018 1H FY2017 fav/(unfav) For personal use only Slots 164.3 155.6 5.6% 164.9 157.7 4.6% 329.3 313.3 5.1% Domestic Tables 342.9 337.9 1.5% 124.7 111.9 1
Slide 34: Operational Metrics
APPENDIX OPERATIONAL METRICS KEY METRICS OPERATING EFFICIENCY For personal use only OPERATIONAL METRICS SYDNEY QUEENSLAND ♦ Group operating costs have grown from $425m 1H FY2014 1H FY2018 1H FY2017 1H FY2018 1H FY2017 to $522m in 1H FY2018 (5.3% CAGR), whilst normalised Slots gross revenue has grown
Slide 35: International VIP Rebate Business Normalisation
APPENDIX INTERNATIONAL VIP REBATE BUSINESS NORMALISATION ACTUAL WIN RATE VS THEORETICAL RECONCILIATION WITH ACTUAL For personal use only ♦ Normalised win rate of 1.35% is in line with the Group’s win 1H FY2018 CHANGE VS rate experience and consistent with the Australia and New 1H FY2018 RESULTS COMP
Slide 36: International VIP Rebate Business Receivables
APPENDIX INTERNATIONAL VIP REBATE BUSINESS RECEIVABLES INTERNATIONAL VIP REBATE BUSINESS 30 DAYS 0 - 30 DAYS 1 - 3 YEARS 3 YEARS + TOTAL For personal use only RECEIVABLES (BEFORE PROVISIONS) - 1 YEAR December 2017 ($m) Not yet due 205.9 - - - 205.9 Past due not impaired - 19.1 2.7 - 21.8 Considered
Slide 37: Cash Conversion
APPENDIX CASH CONVERSION CATEGORY $M DEC-17 DEC-16 For personal use only Cash flows from operating activities before interest and income tax Net cash receipts from customers (inclusive of GST) 1,214.2 1,216.1 Payments to suppliers and employees (inclusive of GST) (726.1) (655.6) Payment of governmen
Slide 38: 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
Slide 39: The Star
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The Star Entertainment Group — H1 FY2018 Earnings Presentation on 6ix