Century Casinos, Inc. · NASDAQ:CNTY
Century Casinos — Investor Presentation (April 2024)
42 slides from Century Casinos's investor presentation, Apr 5, 2024
Slide 1: Investor Presentation
April 5, 2024 - Cape Girardeau, MO INVESTOR PRESENTATION Peter Hoetzinger, Co CEO & President Lyle Randolph, Vice President of Operations & General Manager
Slide 2: Forward-Looking Statements
FORWARD - LOOKING STATEMENTS This presentation may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act o
Slide 3: North American Property Footprint
NORTH AMERICAN PROPERTY FOOTPRINT 11 Properties In the USA (Nevada, Colorado, Missouri, West Virginia and Maryland) and Canada (Alberta) 2,153 Hotel Rooms Across seven casino hotel/resort properties; one new hotel addition under construction (+38 rooms) 7,104 Slot Machines & 142 Table Games Offering
Slide 4: Regional Markets Overview
REGIONAL MARKETS OVERVIEW Diverse regional exposure in stable, mature gaming markets in the U.S. • Regional markets resilient during the pandemic Gross Gaming Revenue (GGR) • 2021 through 2023 Gross Gaming Revenue levels materially up versus 2019 $1.088 $1.060 across all markets served in the U.S. C
Slide 5: Stable Performance
STABLE PERFORMANCE US regional GGR has maintained stable growth since 2001 and has been resilient to macroeconomic changes including oil prices and CPI U.S. Regional GGR ($bn) $58 $52 $47 $39 $40 $34 $34 $35 $37 $31 $30 $30 $31 $31 $32 $26 $27 $29 $29 $29 $22 $24 $24 2001 2002 2003 2004 2005 2006 20
Slide 6: Balance Sheet and Leverage
BALANCE SHEET AND LEVERAGE As of December 31, 2023 In USD, in millions Cash 5.3X $171.3 Debt Leverage 1 Total Principal Debt 1 Net Debt 2 $346.8 $175.5 2.7X 3.4X Net Debt Leverage 2 Adjusted Net Debt Leverage 3 Adjusted EBITDAR 1 Rent Payments 1 (Max First Lien Net Leverage Ratio 5.5X) $114.0 $48.3
Slide 7: Main Growth Drivers
MAIN GROWTH DRIVERS The Riverview hotel in Cape Girardeau Caruthersville Land-based Improvements at Nugget Improvements in Alberta, Canada 6
Slide 8: Next Stage of Growth
NEXT STAGE OF GROWTH Attractive Value Creation Projects Project Description Estimated Capex Estimated Adjusted Estimated Completion Requirement EBITDAR1 Impact East Upgrades to restaurants, lake beach access, $2M – $3M $1M Q3 2024 various renovations and slot purchases Midwest New land-based casino
Slide 9: Long-Term Growth
LONG-TERM GROWTH Strategic Initiatives Projected to Drive Steady Growth 800 40,0% Approaching 3% s–C AGR 1 en u e $700M 700 ev 35,0% Net R $635M 600 30,0% ADJUSTED EBITDAR MARGIN $550M NET OPERATING REVENUE 500 24,0% 24,0% 25,0% $431M 21,0% 20,7% 2025 Assumptions: 400 20,0% • Full year of improvemen
Slide 10: Next Stage of Growth: Forecast 2024 and 2025 Cash Generation
NEXT STAGE OF GROWTH Forecast 2024 and 2025 Cash Generation 2024 2025 Target Revenue 635 +10% 700 Target Adjusted EBITDAR1 134 168 Rent Payments2 (64) (68) Capex Maintenance (13) (15) Capex Projects (26) (9) Interest on Goldman Term Loan (“TLB”) (38) (38) Principal Repayment TLB (7) (4) Tax (includi
Slide 11: Missouri Casinos Overview
MISSOURI CASINOS OVERVIEW Century Casino Caruthersville Century Casino & Hotel Cape Girardeau • April 1995 – opened as Casino Aztar • October 2012 – opened as Isle Casino • June 2007 – purchased by Isle of Capri • May 2017 – Purchased by ERI • May 2017 – Purchased by Eldorado Resorts Inc. (“ERI”) •
Slide 12: Missouri Market Stability
MISSOURI MARKET STABILITY In USD, in millions. 11 Sources: Missouri Gaming Commission
Slide 13: Missouri Competitive Landscape
MISSOURI COMPETITIVE LANDSCAPE 12
Slide 14: Gross Gaming Revenue (GGR) Trend
GROSS GAMING REVENUE (“GGR”) TREND Cape Girardeau and Caruthersville Cape Girardeau and Caruthersville GGR Trend Two-Year Average $120,0 $114,7 $115,0 $110,0 $105,1 $105,0 $100,3 $100,0 $95,0 $90,0 2018-2019 2020-2021 2022-2023 In USD, in millions. 13
Slide 15: Adjusted EBITDAR Trend
ADJUSTED EBITDAR1 TREND Cape Girardeau and Caruthersville Cape Girardeau and Caruthersville Adjusted EBITDAR1 Trend Two-Year Average $50,0 $45,7 $45,0 $43,7 $40,0 $35,0 $31,0 $30,0 $25,0 $20,0 2018-2019 2020-2021 2022-2023 In USD, in millions. 14 1. Adjusted EBITDAR is a non-GAAP financial measure.
Slide 16: Operational Efficiency
OPERATIONAL EFFICIENCY Cape Girardeau and Caruthersville 2023 2019 $ Variance % Variance Net Operating Revenue 111,673 94,309 17,364 18.4% Adjusted EBITDAR1 45,745 31,475 14,270 45.3% Adjusted EBITDAR Margin1 41.0% 33.4% • Net Operating Revenue increased by $17M or 18% in 2023 compared to 2019 • Ove
Slide 17: Marketing Initiatives and Loyalty Program
MARKETING INITIATIVES AND LOYALTY PROGRAM • Introduced the Winners’ Zone loyalty program in March 2020 — Flexibility to cater this to local customer base • Implemented digital Flipbooks and mobile app in late 2020 and early 2021 • Reintroduced a player development program at Cape Girardeau in late 2
Slide 18: Food & Beverage Initiatives
FOOD & BEVERAGE INITIATIVES • Strategic shift to reduce comp offerings and focus on cash Missouri Food & Beverage Cash Flow 2016 2019 2023 revenue $- $(500) • Optimized menu mix and pricing $(252) $(1.000) — Resulted in lower cost of goods sold percentages $(1.500) $(1.571) • Increased Adjusted EBIT
Slide 19: New Competition
NEW COMPETITION • Walker’s Bluff opened on August 25, 2023 • Located in Carterville, IL (approximately a 1-hour 15-minute drive from Cape Girardeau) • 646 slot machines • 14 table games Total Adjusted Walker’s Bluff Casino Resort Gross Receipts1 September $2,884 October $2,131 November $2,131 Decemb
Slide 20: The Riverview
THE RIVERVIEW 19
Slide 21: The Riverview – Opportunity
THE RIVERVIEW – OPPORTUNITY • Nearly 85% of trips to Cape Girardeau currently come from customers living within 75 miles of the casino • Increased reach into St. Louis metropolitan and other markets • Opportunity to bring additional, high-value customers to property • Aim to re-gain market share in
Slide 22: Cape Girardeau Hotel Market
CAPE GIRARDEAU HOTEL MARKET 17-Apr 18-Apr 19-Apr 20-Apr 21-Apr Hotel Opened Rooms Ownership Location Wed Thur Fri Sat Sun The Riverview 2024 69 Century Casino Downtown $207 $207 $307 $307 $207 Courtyard by Marriott 2018 91 Mayson Downtown $161 $175 $292 $260 $134 TRU by Hilton 2024 92 Mid-America In
Slide 23: The Riverview – Early Trends
THE RIVERVIEW – EARLY TRENDS Current Booking Trends • Initial booking trends show strong room nights out of the St. St. Louis Louis market Metro Area • Regional and national bookings are currently making up 40% Illinois 30% of total bookings, representing the opportunity for 15% 15% significant cash
Slide 24: The Riverview – Projected Impact
THE RIVERVIEW – PROJECTED IMPACT The Riverview Projected Annualized Incremental Revenue $10 - $12 Project Cost $31 Projected Annualized Incremental Adjusted EBITDAR1 $3 - $5 (net of estimated Walker’s Bluff impact2) Projected ROI3 16.2% • Expanded casino hours of operation resulting in incremental l
Slide 25: Century Casino Cape Girardeau Strengths
CENTURY CASINO CAPE GIRARDEAU STRENGTHS • Gaming • Hotel • Fine Dining • Starbucks • Banquets and Events • Weekly Entertainment • Headliner Entertainment 24
Slide 26: Caruthersville Casino & Hotel
CARUTHERSVILLE CASINO & HOTEL 25
Slide 27: Caruthersville: Prior Flooding and Drought Challenges
CARUTHERSVILLE Prior Flooding and Drought Challenges 26
Slide 28: Caruthersville: Land-Based Casino/Hotel Footprint
CARUTHERSVILLE Land-Based Casino/Hotel Footprint 27
Slide 29: Recent Riverboat to Land-Based Conversions
RECENT RIVERBOAT TO LAND-BASED CONVERSIONS Post-Conversion Casino Opening Date Location 12-Month GGR Increase Dec-19 Elizabeth, IN 7% Oct-17 Evansville, IN 18% Jun-16 Bettendorf, IA 11% Jun-16 Davenport, IA 49% Aug-14 Sioux City, IA 62% Average 29% Median 18% Caruthersville, Projected Increase Late
Slide 30: Caruthersville Casino & Hotel – Opportunity
CARUTHERSVILLE CASINO & HOTEL – OPPORTUNITY • Approximately 90% of trips to Caruthersville currently come from customers living within 75 miles of the casino • Potential for increased reach into Memphis, Nashville and other markets • Opportunity to bring additional, high-value customers to property
Slide 31: Caruthersville – Projected Impact on Completion
CARUTHERSVILLE– PROJECTED IMPACT ON COMPLETION Gaming Positions Former Temporary New Riverboat Pavilion Facility # Slots 519 418 600+ # Tables 7 6 11 Caruthersville Land-Based Casino & Hotel Project Cost $52 Projected Annualized Adjusted EBITDAR1 (net of increased rent) $3 - $4 Projected ROI 14.4% I
Slide 32: Century Casino Caruthersville Strengths
CENTURY CASINO CARUTHERSVILLE STRENGTHS • The population within 90 miles of Caruthersville is approximately 22% higher than the population within 90 miles of Cape Girardeau1 • Total income (calculated as population multiplied by income per capita) is approximately 15% higher within 90 miles of Carut
Slide 33: Missouri Sports Betting Update
MISSOURI SPORTS BETTING UPDATE • A ballot initiative that is supported by the professional sports teams in Missouri hopes to put the sports betting question on the November 5, 2024, ballot. • The sports teams working together on the initiative are the St. Louis Cardinals, St. Louis Blues, St. Louis
Slide 34: Appendix
APPENDIX 33
Slide 35: Appendix: Terms and Definitions
APPENDIX Terms and Definitions • In this presentation, the term “USD” refers to US dollars, the term “CAD” refers to Canadian dollars and the term “PLN” refers to Polish zloty. Amounts presented are rounded. As such, rounding differences could occur in period-over-period changes and percentages repo
Slide 36: Appendix: Non-GAAP Financial Measures
APPENDIX Non-GAAP Financial Measures • The Company supplements its consolidated financial statements prepared in accordance with US generally accepted accounting principles (“GAAP”) by using the following non-GAAP financial measures, which management believes are useful in properly understanding the
Slide 37: Appendix: Non-GAAP Financial Measures
APPENDIX Non-GAAP Financial Measures • Adjusted EBITDAR is defined as net (loss) earnings attributable to Century Casinos, Inc. shareholders before interest expense (income) (including interest expense related to the Company’s Master Lease), net, income taxes (benefit), depreciation, amortization, n
Slide 38: Appendix: Non-GAAP Financial Measures
APPENDIX Non-GAAP Financial Measures • Adjusted EBITDAR (continued). Adjusted EBITDAR should not be construed as an alternative to net earnings (loss) attributable to Century Casinos, Inc. shareholders, the most directly comparable GAAP measure, as indicators of our performance. In addition, Adjuste
Slide 39: Appendix: Non-GAAP Financial Measures
APPENDIX Non-GAAP Financial Measures • Lease Adjusted Leverage is calculated by dividing the Company’s trailing twelve-month Adjusted EBITDAR by the Company’s Lease Debt (as defined in this Appendix) plus Net Debt. Lease Adjusted Leverage shows the Company’s leverage as if the Master Lease, CDR land
Slide 40: Appendix: Reconciliation of Adjusted EBITDAR
APPENDIX Non-GAAP Financial Measures – Reconciliation of Adjusted EBITDAR For the three months ended December 31, in USD, in thousands 2023 2022 Net operating revenue $ 143,760 $ 103,754 Net loss attributable to Century Casinos, Inc. shareholders (10,821) (4,042) Interest expense (income), net 24,70
Slide 41: Appendix: Reconciliation of Missouri Adjusted EBITDAR and Margin
APPENDIX Non-GAAP Financial Measures – Reconciliation of Missouri Adjusted EBITDAR and Adjusted EBITDAR Margin Unaudited in USD, in thousands 2018 2019 2020 2021 2022 2023 Net operating revenue 96,030 94,309 79,574 123,006 109,070 111,673 Net earnings (loss) 17,051 21,240 (31,281) 28,384 11,115 10,2
Slide 42: Appendix: Calculation of Lease Adjusted Net Leverage
APPENDIX Non-GAAP Financial Measures – Calculation of Lease Adjusted Net Leverage and Lease Adjusted Leverage Year Ended in dollars, in millions December 31, 2023 Cash $ 171.3 Cash in Casinos $ 48.7 Total Principal Debt $ 346.8 Net Debt $ 175.5 1 Adj EBITDAR $ 114.0 2 Rent Payments $ (48.3) 3 Debt L