Galaxy Entertainment Group Limited · HKEX:27
Galaxy Entertainment — Q2 2018 Earnings Presentation
34 slides from Galaxy Entertainment's earnings presentation, Aug 8, 2018
Slide 1: Q2 & Interim Results 2018
Q2 & Interim Results 2018 8 August, 2018
Slide 2: Executive Summary
Executive Summary Q2 & Interim 2018 Results Highlights • Delivers Record Quarterly EBITDA • Q2 2018 Group Adjusted EBITDA of $4.3 Billion, Up 32% YoY • 10th Consecutive Quarter of YoY EBITDA Growth • Driven by Record Quarterly Mass Performance • Subsequently Announced Another Special Dividend of $0.
Slide 3: Accounting Standard Change - Gross / Net Revenue
Accounting Standard Change - Gross / Net Revenue GEG required to adopt a new accounting standard in reporting revenue beginning 1 January 2018 in accordance with the HKICPA • Reporting lower revenues by shifting from Gross Revenue to Net Revenue • Required to deduct all gaming commissions and incent
Slide 4: Executive Summary: Group Record Performance
Executive Summary GEG: Delivered Record Performance, Driven by Record Mass, Strong VIP and Operational Execution • 1H Group Net Revenue* of $28.1 billion, up 25% YoY • 1H Group Adjusted EBITDA of $8.6 billion, up 34% YoY • 1H Net Profit Attributable to Shareholders (“NPAS”) of $7.2 billion, up 56% Y
Slide 5: Executive Summary: Galaxy Macau
Executive Summary Galaxy Macau™: 10th Consecutive Quarter of YoY EBITDA Growth, despite Playing Unlucky • 1H Net Revenue* of $19.8 billion, up 25% YoY • 1H Adjusted EBITDA of $6.5 billion, up 28% YoY • Q2 Net Revenue* of $9.9 billion, up 28% YoY and up 1% QoQ • Q2 Adjusted EBITDA of $3.2 billion, up
Slide 6: Executive Summary: StarWorld Macau
Executive Summary StarWorld Macau: 8th Consecutive Quarter of YoY EBITDA Growth Driven by Near Record Mass • 1H Net Revenue* of $6.3 billion, up 28% YoY • 1H Adjusted EBITDA of $2.0 billion, up 41% YoY • Q2 Net Revenue* of $3.1 billion, up 17% YoY and down 5% QoQ • Q2 Adjusted EBITDA of $987 million
Slide 7: Executive Summary: Broadway Macau
Executive Summary Broadway Macau™: A Unique Family Friendly Resort, Strongly Supported By Macau SMEs • 1H Net Revenue* of $273 million, up 4% YoY • 1H Adjusted EBITDA of $15 million versus $7 million in 1H 2017 • Q2 Net Revenue* of $131 million, up 3% YoY and down 8% QoQ • Q2 Adjusted EBITDA of $2 m
Slide 8: Executive Summary: Balance Sheet and Development Update
Executive Summary Balance Sheet: Exceptionally Strong Balance Sheet • Cash and liquid investments was $42.9 billion and net cash of $34.3 billion as at 30 June 2018 • Debt of $8.6 billion as at 30 June 2018 • Paid the previously announced special dividend of $0.41 per share on 27 April 2018 • Subseq
Slide 9: Interim Results 2018
Interim Results 2018 August 2018 9
Slide 10: GEG Revenue Summary 1H 2018
GEG Revenue Summary 1H 2018 Group Net Revenue in the first half of 2018 grew 25% YoY to $28.1 billion GEG Gross Revenue (HK$’m) GEG Net Revenue (HK$’m) $37,607 $34,679 $29,284 $28,058 $26,104 $22,536 $26,771 $25,115 $20,645 $19,793 $18,811 $15,874 $7,638 $8,825 $6,842 $5,383 $6,270 $4,884 $282 $267
Slide 11: GEG Revenue Summary 1H 2018
GEG Revenue Summary 1H 2018 Group Net Revenue in the first half of 2018 grew 25% YoY to $28.1 billion Gross Net Gross Net YoY Revenue Revenue HoH Revenue Revenue GEG Total +28% +25% GEG Total +8% +7% Galaxy Macau™ +30% +25% Galaxy Macau™ +7% +5% StarWorld +29% +28% StarWorld +16% +16% Broadway Macau
Slide 12: GEG Adjusted EBITDA Summary 1H 2018
GEG Adjusted EBITDA Summary 1H 2018 Group Adjusted EBITDA increased 34% YoY to $8.6 billion in the first half of 2018 GEG Adjusted EBITDA (HK$’m) $8,645 $7,681 YoY HoH $6,466 GEG Total +34% +13% Galaxy Macau™ +28% +7% $6,481 $6,067 StarWorld Macau +41% +28% $5,063 Broadway Macau™ +114% +400% $1,990
Slide 13: GEG LTM Adjusted EBITDA Summary
GEG LTM Adjusted EBITDA Summary Last twelve months Adjusted EBITDA ended June 30, 2018 grew 35% YoY to $16.3 billion GEG Adjusted EBITDA (HK$’m) Broadway Macau™ & Others StarWorld Macau Galaxy Macau™ $16,326 $15,286 $14,147 $12,949 $12,108 $11,809 $12,548 $10,142 $11,130 $9,638 $2,852 $2,966 $3,320
Slide 14: GEG 1H 2018 NPAS
GEG 1H 2018 NPAS 1H 2018 NPAS increased 56% to $7.2 billion including $14 million of net non-recurring items (in HK$'m) 1H17 1H18 YoY Revenue (with new Accounting Standard retrospective restatement) $ 22,536 $ 28,058 25% Adjusted EBITDA $ 6,466 $ 8,645 34% Net Profit attributable to shareholders (NP
Slide 15: GEG Special Dividends
GEG Special Dividends Today, GEG announced another special dividend of $0.50 per share to be paid on or about 26 October 2018 • The Group paid a special dividend of $0.41 per share on 27 April 2018 • Today, the Board is pleased to announce another special dividend of $0.50 per share to be paid on or
Slide 16: Cash and Debt Update
Cash and Debt Update Balance Sheet: Exceptionally Strong Balance Sheet • Cash and liquid investments was $42.9 billion and net cash of $34.3 billion as at 30 June 2018 • Debt of $8.6 billion as at 30 June 2018 Cash* & Net Cash* on Hand (HK$ billion) * Include liquid investment $41.4 $41.8 $42.9 $34.
Slide 17: Q2 2018 Results
Q2 2018 Results August 2018 17
Slide 18: GEG Revenue Q2 2018
GEG Revenue Q2 2018 Group Net Revenue in Q2 2018 grew 22% YoY and declined 1% QoQ to $13.9 billion GEG Gross Revenue (HK$’m) GEG Net Revenue (HK$’m) $18,932 $18,675 $14,812 $14,133 $13,925 $11,408 $13,300 $13,471 $10,111 $9,844 $9,949 $7,784 $4,545 $4,280 $3,689 $3,210 $3,060 $2,620 $135 $150 $139 $
Slide 19: GEG Revenue Q2 2018
GEG Revenue Q2 2018 Group Net Revenue in Q2 2018 grew 22% YoY and declined 1% QoQ to $13.9 billion Gross Net Gross Net YoY Revenue Revenue QoQ Revenue Revenue GEG Total +26% +22% GEG Total (1)% (1)% Galaxy Macau™ +33% +28% Galaxy Macau™ +1% +1% StarWorld +16% +17% StarWorld (6)% (5)% Broadway Macau™
Slide 20: GEG Adjusted EBITDA Q2 2018
GEG Adjusted EBITDA Q2 2018 Group Adjusted EBITDA in Q2 2018 grew 32% YoY and modestly QoQ to a record $4.3 billion • Played unlucky which reduced EBITDA by approx. $131 million • Normalized EBITDA grew 34% YoY and 1% QoQ to $4.5 billion GEG Adjusted EBITDA (HK$’m) YoY QoQ $4,319 $4,326 GEG Total +3
Slide 21: Galaxy Macau
NS Galaxy Macau™ FUR GEG August 2018
Slide 22: Galaxy Macau Q2 2018
Galaxy Macau Q2 2018 Galaxy Macau™ Q2 2018 Adjusted EBITDA grew 30% YoY and down 1% QoQ to $3.2 billion Galaxy Macau YoY QoQ Total Gross Revenue +33% +1% Net Revenue of $9.9 billion increased 28% YoY and 1% QoQ Total Net Revenue +28% +1% • VIP revenue grew 51% YoY and 2% QoQ to $7.3 billion Adjust
Slide 23: StarWorld Macau
StarWorld Macau August 2018 23
Slide 24: StarWorld Macau Q2 2018
StarWorld Macau Q2 2018 StarWorld Macau Q2 2018 Adjusted EBITDA grew 29% YoY and down 2% QoQ to $987 million StarWorld Macau YoY QoQ Total Gross Revenue +16% (6)% Net Revenue of $3.1 billion, up 17% YoY and down 5% QoQ Total Net Revenue +17% (5)% • VIP win increased 15% YoY and decreased 10% QoQ Adj
Slide 25: Broadway Macau
Broadway Macau™ August 2018 25
Slide 26: Broadway Macau Q2 2018
Broadway Macau™ Q2 2018 Broadway Macau™ Q2 2018 Adjusted EBITDA of $2 million, versus $1 million in Q2 2017 Broadway Macau™ YoY QoQ Total Gross Revenue +3% (7)% Net Revenue of $131 million, versus $127 million +3% (8)% Total Net Revenue in prior year and $142 million in Q1 2018 Adjusted EBITDA +100%
Slide 27: City Clubs Q2 2018
City Clubs Q2 2018 City Clubs Q2 2018 Adjusted EBITDA was up 12% YoY and 8% QoQ to $28 million City Clubs Adjusted EBITDA (HK$’m) $28 $25 $26 2017 Q2 2018 Q1 2018 Q2 August 2018 27
Slide 28: Construction Materials Q2 2018
Construction Materials Q2 2018 CMD Q2 2018 Adjusted EBITDA grew 53% YoY and 41% QoQ to $315 million Construction Materials Adjusted EBITDA (HK$’m) $315 $223 $206 2017 Q2 2018 Q1 2018 Q2 August 2018 28
Slide 29: GEG Development Update
GEG Development Update Cotai - The Next Chapter • Continue to move forward with Phases 3 & 4, which will include approximately 4,500 hotel rooms, including family and premium high end rooms, 400,000 square feet of MICE space, a 16,000-seat multi-purpose arena, F&B, retail and casinos, among others.
Slide 30: Selected 2018 Awards
Selected 2018 Awards Award Presenter GEG Best IR Company (Large Cap) Hong Kong Investor Relations Association Integrated Resort of the Year 11th International Gaming Awards Best Integrated Resort Award G2E Asia Awards Best Gaming Floor Award Best Hospitality & Gaming Company 2018 APAC Hong Kong Busi
Slide 31: Q2 2018 Summary Positioned for Growth
Q2 2018 Summary Positioned for Growth Corporate • 1H Group Adjusted EBITDA of $8.6 billion, up 34% YoY • Q2 Group Adjusted EBITDA of $4.3 billion, up 32% YoY and up modestly QoQ • • Paid a special dividend of $0.41 per share on 27 April 2018 Subsequently, the Group will pay another special dividend
Slide 32: Appendix: Adoption of New Accounting Standard
Appendix 1 Adoption of New Accounting Standard GEG HK$’m 1Q17 2Q17 1Q18 2Q18 YoY QoQ 1H17 1H18 YoY Previous Accounting Standard Gross Revenue 14,097 14,447 18,549 18,288 27% -1% 28,544 36,837 29% New Accounting Standard Net Revenue 11,128 11,408 14,133 13,925 22% -1% 22,536 28,058 25% Galaxy Macau
Slide 33: Disclaimer
Disclaimer This document and any verbal presentation or discussion have been prepared by Galaxy Entertainment Group Limited (the “Company”) solely for your personal reference. The information provided has not been independently verified. No representation or warranty express or implied is made as to
Slide 34: Q2 & Interim Results 2018
Q2 & Interim Results 2018 8 August, 2018
Galaxy Entertainment Group — Q2 2018 Earnings Presentation on 6ix