Star Entertainment Group Limited · ASX:SGR
Star Entertainment — H1 FY2022 Earnings Presentation
34 slides from Star Entertainment's earnings presentation, Feb 17, 2022
Slide 1: ASX Announcement: 2022 Half-Year Results Presentation
ASX Announcement 17 February 2022 2022 HALF-YEAR RESULTS PRESENTATION Attached is the presentation regarding the financial results of The Star Entertainment Group Limited (The Star) for the half-year ended 31 December 2021, to be presented by Matt Bekier, Managing Director and Chief Executive Office
Slide 2: 1H FY2022 Results Presentation
THE STAR ENTERTAINMENT GROUP 1H FY2022 RESULTS PRESENTATION THURSDAY 17 FEBRUARY 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: 1H FY2022 Highlights
OVERVIEW 1H FY2022 HIGHLIGHTS EARNINGS MATERIALLY ♦ Normalised Group revenue $580m, EBITDA $29m and net loss $74m* IMPACTED BY COVID-19 ♦ Statutory EBITDA $31m (pre significant items), net loss $74m (post significant items) RESTRICTIONS ♦ COVID-19 related property shutdowns, operating restrictions a
Slide 6: Trading Update and Regulatory Reviews
OVERVIEW TRADING UPDATE AND REGULATORY REVIEWS EARLY 2H FY2022 ♦ Early 2H FY2022 trading has continued to be impacted by COVID-19 and the prevalence of TRADING IMPACTED BY the Omicron variant COVID-19 ♦ Omicron has had a material impact on visitation and the supply of products and services, however,
Slide 7: Sydney
OVERVIEW SYDNEY PROPERTY CLOSURE ♦ Normalised EBITDA loss of $25m AND OPERATING ♦ Earnings significantly impacted by the property shutdown and COVID-19 related operating RESTRICTIONS restrictions ♦ The Star Sydney re-opened on 11 October 2021 (open for 81 of 184 days) and certain COVID-19 operating
Slide 8: Sydney Revenue Performance Upon Re-opening
OVERVIEW SYDNEY REVENUE PERFORMANCE UPON RE-OPENING ♦ Revenue approached pre-COVID-19 levels as restrictions were eased throughout the STRONG PERFORMANCE December quarter UPON RE-OPENING ♦ Restrictions were progressively eased through to 15 December, some restrictions were re- imposed from 24 Decemb
Slide 9: Sydney Operating Conditions
OVERVIEW SYDNEY OPERATING CONDITIONS 15-Dec-21 ♦ Vaccination, mask, density 18-Jun-21 quotient, QR code check-in 03-Jan-21 01-Jul-20 12-Feb-21 requirements eased ♦ Masks mandatory ♦ Masks encouraged ♦ 1 person per 4m2 ♦ 1 person per 20-Jun-21 23-Mar-20 ♦ 3 patrons per table 2m2 ♦ Masks mandatory 24-
Slide 10: Gold Coast
OVERVIEW GOLD COAST PROPERTY CLOSURES ♦ Normalised EBITDA $26m AND OPERATING ♦ Earnings materially impacted by property shutdowns, COVID-19 related operating restrictions RESTRICTIONS and the border closure ♦ Domestic revenue up 6% on pcp with non-gaming revenue up 35% despite shutdowns and SOLID RE
Slide 11: The Dorsett Gold Coast and The Star Residences
PROJECTS – THE STAR GOLD COAST THE DORSETT GOLD COAST AND THE STAR RESIDENCES DORSETT GOLD COAST HOTEL ROOM DORSETT GOLD COAST AND THE STAR RESIDENCES – TOWER 1 DORSETT GOLD COAST HOTEL LOBBY 10
Slide 12: New Non-gaming Amenities
PROJECTS – THE STAR GOLD COAST NEW NON-GAMING AMENITIES Concept image only ISOLETTO POOL CLUB AND ISOLETTO PRIVÉ DECK ATRIUM BAR Concept image only ISOLETTO POOL CLUB UNCLE SU RESTAURANT 11
Slide 13: Brisbane
OVERVIEW BRISBANE PROPERTY CLOSURES ♦ Normalised EBITDA $29m AND OPERATING ♦ Earnings impacted by property shutdowns and COVID-19 related operating restrictions RESTRICTIONS ♦ Domestic revenue down 11%, impacted by shutdowns and more onerous COVID-19 related REVENUE operating restrictions PERFORMANC
Slide 14: Queensland Operating Conditions
OVERVIEW QUEENSLAND OPERATING CONDITIONS 17-Nov-20 11-Jan-21 22-Jan-21 29-Jun-21 08-Aug-21 8-Oct-21 ♦ 1 person per 2m2 ♦ Brisbane re-opened ♦ Brisbane 1 person ♦ Brisbane 1 person per 4m2 ♦ 1 person per 4m2 ♦ 1 person per 2m2, masks ♦ 7 patrons per table ♦ 1 per 4m2 per 2m2 ♦ Masks ♦ Masks ♦ All EGM
Slide 15: Agenda
THE STAR ENTERTAINMENT GROUP AGENDA 1. OVERVIEW 2. FINANCIALS 3. PRIORITIES 4. Q&A 14
Slide 16: Group Overview
FINANCIALS GROUP OVERVIEW ♦ Operating expenses up 5% on pcp to $401m* OPERATING EXPENSES AND SIGNIFICANT ITEMS ♦ Costs in 1H FY2022 reflect investment in staff and operating footprint to position for re-opening ♦ Significant items net $1.4m** BALANCE SHEET AND ♦ Net debt increased by $52m (4%) to $1
Slide 17: Operating Expenses
FINANCIALS OPERATING EXPENSES ♦ Moved to centralised functions in 2019-2020 with ~$50m salaried headcount savings COST REDUCTION achieved in early FY2020 PROGRAM RECAP ♦ Additional $50m in fixed cost savings targeted in FY2021 program – further streamlining central functions/overheads, international
Slide 18: Capex
FINANCIALS CAPEX GROUP CAPEX IS DOWN ♦ The Group is coming off a period of heavy investment, delivered on time and on budget MATERIALLY FROM ♦ Capex of $66m well below depreciation and amortisation expense of $103m PRIOR YEARS ♦ FY2022 expected capex remains $125-150m, FY2023 guidance is ~$175m ♦ FY
Slide 19: Asset Sales
FINANCIALS ASSET SALES ♦ The Group has been pursuing a strategy of releasing capital from non-core or low-yielding RATIONALE assets and to re-invest the proceeds in higher growth and more productive areas ♦ Assets that meet this criteria include VIP related assets, car parks, hotels, retail and prop
Slide 20: Profit and Loss – 1H FY2022
FINANCIALS PROFIT AND LOSS – 1H FY2022 1H FY2022 1H FY2021 1H FY2022 1H FY2021 2 $M 6 fav/(unfav) 2 2 2 2 fav/(unfav) STATUTORY STATUTORY NORMALISED NORMALISED 6 Domestic Gaming revenue 498.0 657.5 (24.3%) 498.0 657.5 (24.3%) International VIP Rebate 1.8 16.4 (89.0%) 0.5 8.8 (94.3%) Non-gaming and o
Slide 21: Balance Sheet
FINANCIALS BALANCE SHEET $M DEC 2021 JUN 20211 DEC 20201 ♦ Capital programs progressed ASSETS Current Assets • Property, plant and equipment declined, reflecting Cash and cash equivalents 100.8 67.9 88.6 capex below depreciation Trade and other receivables 20.8 23.3 61.7 Inventories 17.1 15.2 16.4 •
Slide 22: Agenda
THE STAR ENTERTAINMENT GROUP AGENDA 1. OVERVIEW 2. FINANCIALS 3. PRIORITIES 4. Q&A 21
Slide 23: Our Priorities for the Year Ahead
PRIORITIES OUR PRIORITIES FOR THE YEAR AHEAD ♦ Post COVID-19 earnings recovery 1 OPERATIONS ♦ Operating expenses – maintain cost benefits from recently executed programs LEGAL, REGULATORY ♦ AUSTRAC – enforcement investigation – notified in June 2021, scope expanded 2 AND COMPLIANCE January 2022 • Th
Slide 24: Strategy Remains Unchanged
PRIORITIES STRATEGY REMAINS UNCHANGED OUR STRATEGY OUR DELIVERY ♦ Privileged assets and 1 Deliver on the operating model partnerships ♦ Leverage improved capabilities – loyalty, gaming, risk ♦ Signature gaming ♦ Premium hotel rooms, ♦ Retain the efficiencies from cost management programs F&B, retail
Slide 25: Gold Coast
PRIORITIES GOLD COAST CONSTRUCTION ON TIME AND BUDGET ♦ Opened the Dorsett Gold Coast Hotel in December 2021 ♦ Complete The Star Residences in 4Q FY2022 ♦ Construction of Tower 2, a $400m 63-storey mixed use tower, which commenced in February 2021 is underway, incorporating a 210 room 5-star hotel a
Slide 26: Queen's Wharf Brisbane
PRIORITIES QUEEN’S WHARF BRISBANE PLANNED FOR MID CY2023 OPENING ♦ 64% of gross floor area has been built ♦ Fit-out of the podium is progressing ♦ In excess of 90% of project costs are under lump sum terms ♦ Construction of the Neville Bonner Bridge is progressing ♦ Signed a lease agreement with DFS
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 >80% portfolio with environmental Winner International Gaming SUSTAINABILITY ratings, 90% by end of 2022 ‘Sustainable Business – Operator’ AND ENVIRONMENTAL Award Green Star Performance Ratings Aligning our reporting with the United achieved – The Star Sydney and
Slide 29: Statutory Results – 1H FY2022
APPENDIX STATUTORY RESULTS – 1H FY2022 SYDNEY GOLD COAST BRISBANE TOTAL $M 1H FY2022 1H FY20211 fav/(unfav) 1H FY2022 1H FY2021 fav/(unfav) 1H FY2022 1H FY2021 fav/(unfav) 1H FY2022 1H FY20211 fav/(unfav) Slots 79.6 121.2 (34.3%) 98.9 98.7 0.2% 81.3 91.3 (11.0%) 259.8 311.2 (16.5%) Domestic Tables 1
Slide 30: Normalised Results – 1H FY2022
APPENDIX NORMALISED RESULTS – 1H FY2022 SYDNEY GOLD COAST BRISBANE TOTAL $M 1H FY2022 1H FY20211 fav/(unfav) 1H FY2022 1H FY2021 fav/(unfav) 1H FY2022 1H FY2021 fav/(unfav) 1H FY2022 1H FY20211 fav/(unfav) Slots 79.6 121.2 (34.3%) 98.9 98.7 0.2% 81.3 91.3 (11.0%) 259.8 311.2 (16.5%) Domestic Tables
Slide 31: Cash Conversion and Funding
APPENDIX CASH CONVERSION AND FUNDING CATEGORY DEC 2021 JUN 2021 DEC 20202 CASH CONVERSION $M Cash flows from operating activities before interest and income tax Net cash receipts in the course of operations 612.9 1,689.7 816.9 Payments to suppliers, service providers and employees (425.3) (995.9) (4
Slide 32: Address Crown Sydney
APPENDIX ADDRESS CROWN SYDNEY COMPETITION READY 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 3 Car Park Direct access t
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 Unless otherwise stated, capital expenditure is presented on an accruals basis and excludes
Slide 34: The Star Entertainment Group
THE STAR ENTERTAINMENT GROUP
Star Entertainment Group — H1 FY2022 Earnings Presentation on 6ix