Genting Malaysia Bhd. · MYX:GENM
Genting Malaysia Bhd — Investor Presentation (July 2010)
38 slides from Genting Malaysia Bhd's investor presentation, July 2010
Slide 1: Genting Malaysia Berhad Investor Presentation
GENTING MALAYSIA BERHAD INVESTOR PRESENTATION July 2010 Private & Confidential
Slide 2: Agenda
Agenda • Genting Malaysia Business Strategy • Overview of Genting UK Acquisition • Overview of Aqueduct Racetrack bid • Appendices Private & Confidential 2
Slide 3: Genting Malaysia Business Strategy
GENTING MALAYSIA BUSINESS STRATEGY Private & Confidential
Slide 4: Genting Malaysia Business Strategy
Genting Malaysia Business Strategy TO EXPAND INTERNATIONALLY FOCUSING ON LEISURE, HOSPITALITY AND ENTERTAINMENT • Proposed acquisition of Genting Singapore PLC’s casino businesses in the United Kingdom for a total cash consideration of £340 million (~RM1,668 million) (“UK Acquisition”) • Submission
Slide 5: Rationale for the Expansion
Rationale for the Expansion • In line with GENM’s strategic direction to expand overseas and grow its earnings and revenue base • Access to highly regulated gaming jurisdictions - Direct entry into the UK and USA leisure, hospitality and entertainment industry • The expansions have synergistic effec
Slide 6: Expansion Plans
Expansion Plans Expansion overseas The UK Acquisition – Genting UK and grow earnings and revenue base • Opportunity to expand into the UK, EU and The Middle East • Genting UK’s existing infrastructure and Access to regulated leadership position are major advantages growing markets • An opportunistic
Slide 7: Overview of Genting UK Acquisition
OVERVIEW OF GENTING UK ACQUISITION Private & Confidential
Slide 8: Rationale for the Genting UK Acquisition
Rationale for the Genting UK Acquisition For Genting Malaysia Berhad • Grow its earnings and revenue base • Genting UK’s existing leadership position and GENM’s expertise to grow market share • Genting UK’s established infrastructure enables rapid roll out of marketing strategies and new leisure con
Slide 9: UK Total Casino Attendance
UK Total Casino Attendance million CAGR of 6.2% 18.0 16.6 16.2 16.0 15.1 13.9 14.0 12.3 12.0 10.0 8.0 6.0 4.0 2.0 0.0 2005 2006 2007 2008 2009 Source: Gambling Commission 2008/2009 Private & Confidential 9
Slide 10: UK Gaming Landscape
UK Gaming Landscape 2010* Market Share by UK Casino Operator number of Operating operating casino Genting Stanley 44 31.2% Grosvenor Casinos (Rank) 35 24.8% Market share Gala Casinos 27 19.2% London Clubs 9 6.4% A&S Leisure 6 4.3% Aspers/ Aspinalls 4 2.8% Club 36 3 2.1% Clockfair 2 1.4% Guoco 1 0.7%
Slide 11: Genting UK
Genting UK • Largest casino operator in the UK - Total of 44 casino out of 144 casinos operating in the UK • Experienced casino operator with over 30 years of operating track record • Extensive network of casinos offering full range of slots and table games • Established brand names - Crockfords, Th
Slide 12: Location Of Genting UK Casinos
Location Of Genting UK Casinos Private & Confidential 12
Slide 13: Genting UK Casino Attendance
Genting UK Casino Attendance ‘000 ‘000 450 398 4,000 389 3,601 400 358 3,500 3,326 350 3,112 3,000 300 2,500 250 % Yo Y 200 Up 16 2,000 Down 3% YoY 150 1,500 101 100 87 1,000 791 771 50 500 0 0 2007 2008 2009 1Q 2009 1Q 2010 2007 2008 2009 1Q 2009 1Q 2010 London Casinos Provincial Casinos Private &
Slide 14: Key Financials of Genting UK
Key Financials of Genting UK Pro forma for 3 Months ended GBP (‘000) FY2007 FY2008 FY2009 Mar 2010 Revenue 229,305 226,981 194,097 52,172 Improved financial position from FY2009 to 3 months ended 31 March 2010 : EBITDA 34,083 16,359 30,153 8,304 Note (1) EBITDA Margin (%) 14.9 7.2 15.5 15.9 (1) • EB
Slide 15: Valuation Range
Valuation Range Equity value of Genting UK (£ million) Implied multiples FV/2011E EBITDA Valuation Range 10.6 – 12.2x Discounted cash flow analysis 11.3 – 13.1x Public market comparables - 2011E EBITDA of £38 million 9.5 – 11.5x - 2012E EBITDA of £44 million 9.4 – 11.7x Broker consensus 8.0 – 12.2x
Slide 16: Purchase Price Multiples
Purchase Price Multiples • Based on the purchase consideration of £340 million and net debt of £86 million, the valuation multiples for the UK Acquisition are: EV/ 2011E EBITDA 11.2 times EV/ 2012E EBITDA 9.7 times Price / Book 1.2 times Assumptions • Enterprise Value (“EV”) of £426 million is compu
Slide 17: DCF Analysis - long term value
DCF Analysis - long term value Purchase Price Multiples Short term DCF Analysis Long term • DCF analysis captures long term value • Purchase Consideration of £340 mil – low end of £339 - 405 mil range Valuation Range (£ mil) Discounted cash flow analysis (£ mil) GENM’s strategy to grow Genting UK bu
Slide 18: Key Financial Matrix
Key Financial Matrix Use of cash by GENM Rate of return (%) 1) Acquisition of Genting UK Return on investment * In excess of 9.0% compared to 2) Share buyback at RM2.70 After-tax yield (inverse of PE ratio) ^ 8% compared to 3) Deposits & money market instruments Average interest rate per annum 2% *
Slide 19: Genting UK Growth Opportunities
Genting UK Growth Opportunities • Has applied for a new large casino license in Newham, East London • In the midst of applying for a second license in Birmingham, West Midlands, partnering The National Exhibition Centre (“NEC”) Group for a proposed development of a leisure and entertainment complex
Slide 20: Overview of Aqueduct Racetrack Bid
OVERVIEW OF AQUEDUCT RACETRACK BID Private & Confidential
Slide 21: Aqueduct Racetrack
Aqueduct Racetrack • The New York State Division of Lottery (“NYSL”) issued a Request for Proposal (“RFP”) for the development and operation of a video lottery facility (“VLF”) at Aqueduct Racetrack • Aqueduct Racetrack (Racino) occupies 210 acres in South Ozone Park in the Borough of Queens, the Ci
Slide 22: Terminology
Terminology Racinos are horse or greyhound race tracks which have casinos. In some cases, the casino games are limited to slot Racinos machines or VLTs only. However, many locations are beginning to include table games such as blackjack, poker, and roulette. VLT is a gaming machine that allows gambl
Slide 23: Strategic Location of Aqueduct Racetrack
Strategic Location of Aqueduct Racetrack Strategically located, with two subway stops on the New York Subway Aqueduct Private & Confidential 23
Slide 24: Aqueduct Racetrack VLT Facility
Aqueduct Racetrack VLT Facility 9 5 3 4 6 2 1 8 7 Aerial Perspective 1: Grand Entrance with covered entry way, three-storey 5: 200-seat high-end Chinese restaurant atrium and water show 6: Sports bar restaurant and lounge, 280-person seating 2: 93,000 sq ft casino on 1st floor; 42,500 sq ft casino o
Slide 25: Appendices
APPENDICES Private & Confidential
Slide 26: Appendix 1: Details of Genting UK Acquisition
APPENDIX 1: DETAILS OF GENTING UK ACQUISITION Private & Confidential
Slide 27: List of Companies to be Acquired
List of Companies to be Acquired List of Companies to be Acquired Palomino World Palomino Star Nedby Limited Genting Limited Group Limited Group Group International Enterprises 100% 100% 100% (Singapore) Pte Ltd Palomino World Genting Genting (UK) Ltd International (UK) International Ltd Investment
Slide 28: The Purchase Consideration
The Purchase Consideration • Purchase consideration amounts to £340 million, to be satisfied via cash from internally-generated funds • The purchase consideration was arrived at on a willing buyer-willing seller basis after taking into consideration, amongst others, the following: - Valuation of the
Slide 29: The Sale and Purchase Agreement
The Sale and Purchase Agreement Salient Terms • Purchase consideration will be settled in Singapore Dollars (S$) at the prevailing average exchange rate for three months prior to date of completion. • Conditions precedent include:- - Approvals from GENM and GENS’s non-interested shareholders in an E
Slide 30: Effects of the UK Acquisition
Effects of the UK Acquisition Issued and Paid-Up Capital • No effect Net Assets per share and gearing • No material effect on net assets per share of GENM • Upon completion of the UK Acquisition, GENM Group will have gearing of 0.05 times Earnings • No material effect on 2010 GENM’s results • Expect
Slide 31: Appendix 2: Genting UK Overview
APPENDIX 2: GENTING UK OVERVIEW Private & Confidential
Slide 32: Genting UK Overview
Genting UK Overview • Largest casino operator in UK in terms of number of casinos since December 2006 • Known under the brand Genting Casinos • Has a total of 44 casino clubs across UK – Operates 39 casino clubs within the provinces under 3 key brands • Circus Casino • Maxims Casino • Mint Casino –
Slide 33: Genting UK Overview
Genting UK Overview LONDON CASINOS • Maxims Casino Club – Most prestigious club within the Royal Borough of Kensington and Chelsea – A short walk from Kensington Palace and its gardens – Has a high stakes poker game • Crockfords Clubs – Oldest private gaming club in the world – Caters to the elite –
Slide 34: Genting UK Overview
Genting UK Overview LONDON CASINOS • The Palm Beach – One of the most vibrant gaming rooms in London – Situated in Berkeley Square in Mayfair – Opened for all-day trading in 2009 during busy summer months • London Mint – Busy and vibrant club in the heart of South Kensington – Refurbished in Decembe
Slide 35: Genting UK Overview
Genting UK Overview PROVINCIAL CASINOS • Circus Casino – A mass market proposition designed for players looking for a livelier atmosphere – Offers an energetic and busy leisure destination for fun day or night out – Located in 11 sites: Birmingham City Centre, Birmingham Star City, Blackpool, Edinbu
Slide 36: Appendix 3: Snapshot of Genting Malaysia Berhad
APPENDIX 3: SNAPSHOT OF GENTING MALAYSIA BERHAD Private & Confidential
Slide 37: Snapshot of GENM
Snapshot of GENM Share Price and Volume Traded Average Volume Traded Daily Past 1 month 8,762,257 Past 3 months 6,325,583 Past 6 months 5,766,185 Currently the 8th largest gaming company Source: Bloomberg as at 21 July 2010 Private & Confidential 37
Slide 38: Disclaimer
Disclaimer Some of the statements made in this presentation which are not statements of historical facts are forward-looking statements and are based on the current beliefs, assumptions, expectations, estimates, objectives and projections of the directors and management of the Genting Malaysia Berha
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