Star Entertainment Group Limited · ASX:SGR
Star Entertainment — Echo Entertainment Group — FY2014 Earnings Presentation
31 slides from Star Entertainment's earnings presentation, Aug 13, 2014
Slide 1: Announcement to the Market: Full Year Results Presentation
13 August 2014 ANNOUNCEMENT TO THE MARKET FULL YEAR RESULTS PRESENTATION Attached is a presentation regarding Echo Entertainment Group Limited’s (Echo) full year results for the financial year ended 30 June 2014 to be presented by Matt Bekier, Managing Director and Chief Executive Officer and Chad B
Slide 2: Full Year 2014 Results Presentation
ECHO FULL YEAR 2014 RESULTS PRESENTATION 13 AUGUST 2014 ECHOENTERTAINMENT GROUP
Slide 3: Basis of Preparation and Non-IFRS Information; Disclaimer
ECHO ENTERTAINMENT GROUP ECHO ENTERTAINMENT GROUP LIMITED (ASX: EGP) 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 Echo Entertainment Group Limited's
Slide 4: Agenda
ECHO ENTERTAINMENT GROUP AGENDA 1. OVERVIEW MATT BEKIER - CEO 2. FINANCIALS CHAD BARTON - CFO 3. OUTLOOK AND PRIORITIES MATT BEKIER - CEO ECHO ENTERTAINMENT GROUP
Slide 5: Overview: FY14 Results
OVERVIEW FY14 RESULTS > Statutory NPAT of $106.3m up 27.3% (Normalised NPAT of $158.2m up 24.6%) on pcp reflecting stronger 2H FY14 performance > Actual EBITDA of $387.1m up 15.7% and normalised EBITDA (excluding significant items) of $439.1m up 12.2% on pcp. Result driven through solid performance
Slide 6: Key Drivers of FY14 Results (EBITDA bridge)
OVERVIEW KEY DRIVERS OF FY14 RESULTS ($m) 30.4 11.4 mz. 12.2% Growth 7 18 4391 COW sig 409 —— | 1 ! 568 391.4 | 334.6 Y | FY13 Reported Significant FY13 Domestic & International Gaming taxes, New leviesand Operating FY14 International FY14 Reported EBITDA items and Normalised Other Revenue VIP Rebat
Slide 7: Turnaround Continuing to Plan
OVERVIEW TURNAROUND CONTINUING TO PLAN > Relaunched loyalty program “Absolute Rewards” in place and gaining momentum > Strengthened and expanded domestic and local sales teams driving benefits > Queensland benefiting from the new regulatory environment on EGMs (TITO, non-Qcom product, EGM note denom
Slide 8: Loyalty Program and Marketing Priorities
OVERVIEW LOYALTY PROGRAM AND MARKETING PRIORITIES Vv Effective rewards program established - focus now on refining and adding benefits Vv Relaunched loyalty program “Absolute Rewards” (implemented in June 2013) continues to grow and deliver benefits across the group after its first full year, partic
Slide 9: Key Drivers of FY14 Results by Segment
OVERVIEW KEY DRIVERS OF FY14 RESULTS Normalised $m 2H13, Slots MGF & PGR Non-Gaming & Other 118.0 220.0 The Star 1H14 122.3 236.5 2H14 133.3 255.0 Comments Slots revenue steadily increasing period on period as The Star increases market share in the region MGF & PGR growth over the period the result
Slide 10: EGM Market Share
OVERVIEW EGM MARKET SHARE > EGM market share has increased across all major properties in 2H FY14 > The Star market share of 9.4% in Q@4 FYI4. (79% inaa =: 1% FY13) 8% * Q4FY14 market share improvements driven by 6% loyalty program, expanded sales team and jackpot 4% strategy 2% * No concession chan
Slide 11: International VIP Rebate Business Performance
OVERVIEW INTERNATIONAL VIP REBATE BUSINESS PERFORMANCE >» International VIP Rebate front money up 6.5% to $2,232.0m > Growth patchy over the period - weakness in Q2 FY14 partly offset in 2H FY14 >» Normalised gross revenue up 6.9% to $472.2m (actual gross revenue up 2.5% to $396.5m) > Actual win rat
Slide 12: International VIP Rebate - Normalisation
OVERVIEW INTERNATIONAL VIP REBATE - NORMALISATION > Updated approach aimed at simplifying the normalisation process and reporting of estimated underlying revenues which is more comparable with domestic peers and to more closely approximate normalised results with the actual win rate experienced over
Slide 13: Agenda
ECHO ENTERTAINMENT GROUP AGENDA 1. OVERVIEW MATT BEKIER - CEO 2. FINANCIALS CHAD BARTON - CFO 3. OUTLOOK AND PRIORITIES MATT BEKIER - CEO ECHO ENTERTAINMENT GROUP
Slide 14: Echo Group Financials
FINANCIALS ECHO GROUP FINANCIALS ($m) FY13 FY14 Grow FY13 FY14 Growth Actual Actual % Normalised Normalised % Gross Revenue! 1846.8 1,897.4 2.7% 1,901.8 1,973.1 3.8% Variable contribution 1,241.6 1,254.0 1.0% 1,260.1 1,306.0 3.6% Operating expenditure ( 868.7) ( 866.9) 0.2% ( 868.7) ( 866.9) 0.2% EB
Slide 15: Balance Sheet and Dividend
FINANCIALS BALANCE SHEET AND DIVIDEND ASSETS Current Assets Cash and cash equivalents 265.5 144.9 Trade and other receivables 84.8 87.1 Inventories 7.2 65 Income tax receivable 13 NZ Derivative financial instruments 3.4 29 Other assets 14.7 21,7 Assets classified as held for sale 69.7 Total current
Slide 16: Metrics
FINANCIALS METRICS Actual Gross Revenue ($m) Dividend Per Share (cents) 1,950.0 1897.4 90 20 1,900.0 18468 6° 1850.0 70 60 1800.0 ae 40 1750.0 1.6893 40 1,700.0 3.0 1,650.0 20 1,600.0 10 1,550.0 + - 4 FYI2 FYI3 FYI4 FYI2 FYI3 FYI4 Statutory NPAT ($m) EBIT / Net Interest Expense Ratio (times) 120.0 1
Slide 17: Echo Funding
FINANCIALS ECHO FUNDING > FY14 Net debt of $658.2m (FY13 $707.3m) >» Undrawn bank facilities of $330m and average drawn debt maturity of 4.3 years > FY14 statutory net finance costs of $88.3m includes costs of $22.2m associated with the closing out of certain out of the money interest rate swaps and
Slide 18: Capex Trend ($m)
• Capex trend ($m) 402 346 280 263 • 230 155 111 FY10 FY11 FY12 FY13 FY14 FY15 Total Echo Capex D&A
Slide 19: Agenda
ECHO ENTERTAINMENT GROUP AGENDA 1. OVERVIEW MATT BEKIER - CEO 2. FINANCIALS CHAD BARTON - CFO 3. OUTLOOK AND PRIORITIES MATT BEKIER - CEO ECHO ENTERTAINMENT GROUP
Slide 20: Trading Update and Strategic Priorities
OUTLOOK AND PRIORITIES TRADING UPDATE AND STRATEGIC PRIORITIES >» FY15 YTD revenue growth broad based with all major properties delivering revenue growth at levels consistent with 2H FY14, as the momentum built in 2H FY14 carries forward into the new financial year. Expenses continue to be in line w
Slide 21: Agenda
ECHO ENTERTAINMENT GROUP AGENDA 1. OVERVIEW MATT BEKIER - CEO 2. FINANCIALS CHAD BARTON - CFO 3. OUTLOOK AND PRIORITIES MATT BEKIER - CEO ECHO ENTERTAINMENT GROUP
Slide 22: Appendix
ECHO ENTERTAINMENT GROUP APPENDIX THE STAR AND QUEENSLAND RESULTS - ACTUAL THE STAR AND QUEENSLAND RESULTS - NORMALISED OPERATIONAL BENCHMARKS INTERNATIONAL VIP REBATE - NORMALISATION INTERNATIONAL VIP REBATE - NORMALISATION FY14 RESTATED INTERNATIONAL VIP REBATE - NORMALISATION HISTORICALLY RESTATE
Slide 23: The Star and Queensland Results - Actual
APPENDIX THE STAR AND QUEENSLAND RESULTS-ACTUAL The Star fav, fav, fav, FY13 FY14 can FY13 can FY13 can Slots 242.1 255.6 5.6% 276.2 289.2 4.7% 518.2 544.9 5.1% Main Gaming Floor 347.0 362.1 4.4% 145.1 143.5 (1.1%) 492.1 505.6 2.7% PGR 127.6 129.3 1.3% 69.0 57.5 (16.7%) 196.6 186.8 (5.0%) Non-Gaming
Slide 24: The Star and Queensland Results - Normalised
APPENDIX THE STAR AND QUEENSLAND RESULTS-NORMALISED Normalised* The Star QLD fay, fay, fav, $m FY13 FY14 en FY13 FY14 ca) can Slots 242.1 255.6 5.6% 276.2 289.2 4.7% 518.2 544.9 5.1% Main Gaming Floor 347.0 362.1 4.4% 145.1 143.5 (1.1%) 492.1 505.6 2.7% PGR 127.6 129.3 1.3% 69.0 57.5 (16.7%) 196.6 1
Slide 25: Operational Benchmarks
APPENDIX OPERATIONAL BENCHMARKS Operational Benchmarks Slots Revenue ($m) NMR/machine/day MTGMs Revenue ($m) NMR/machine/day Table Games (Excl Rebate & MTGMs) Revenue ($m) Hold % International VIP Rebate (Actual) Front Money ($m) Turnover ($m) Turns Win rate Hotels Occupancy Cash Revenue ($m) Averag
Slide 26: International VIP Rebate - Normalisation
APPENDIX INTERNATIONAL VIP REBATE - NORMALISATION > New approach to the reporting of international VIP Rebate results and normalisation of those results to apply for FY15 results > Updated approach aimed at simplifying the normalisation process and reporting of turnover on a more comparable basis wi
Slide 27: International VIP Rebate Normalisation FY14 Restated
APPENDIX INTERNATIONAL VIP REBATE NORMALISATION FY14 RESTATED Normalised* The Star QLD Echo Group Total Total $m IHFY14. 2HFY14 FY14 IHFY14 2HFY14 FY14 IHFY14 2HFY14 Slots 122.3 133.3 255.6 136.7 152.5 289.2 259.0 285.8 544.9 Main Gaming Floor 182.5 179.7 362.1 71.8 71.7 143.5 254.2 251.4 505.6 PGR
Slide 28: International VIP Rebate Normalisation Historically Restated
APPENDIX INTERNATIONAL VIP REBATE NORMALISATION HISTORICALLY RESTATED Normalised* The Star Total $m FY12 FY13 FY12 FY13 Slots 239.4 242.1 255.6 283.2 276.2 289.2 522.6 518.2 544.9 Main Gaming Floor 328.7 347.0 362.1 140.9 145.1 143.5 469.6 492.1 505.6 PGR 125.9 127.6 129.3 67.5 69.0 57.5 193.4 196.6
Slide 29: Cash Collection Ratio
APPENDIX CASH COLLECTION RATIO Categ $m Cash flows from operating activities before interest and income tax Net cash receipts in the course of operations 1,643.6 Payments to suppliers, service providers and employees (1,046.9) Payment of government levies, gaming taxes and GST (359.4) Net cash inflo
Slide 30: Trade Receivables
APPENDIX TRADE RECEIVABLES Ageing of trade receivables O - 30 days -1 year 1-3 years 3 years + Total 2014 ($m) Not yet due 35.6 - - - 35.6 Past due not impaired - 32.4 8.5 - 40.9 Considered impaired - 9.7 8.5 0.1 18.3 Total 35.6 42.1 17.0 0.1 94.8 2013 ($m) Not yet due 41.8 - - - 41.8 Past due not i
Slide 31: Glossary
APPENDIX GLOSSARY CAGR Capital expenditure (capex) Customer front money EGM F&B MGF MTGM NMR Normalised revenue pcp PGR Rebate Significant items International VIP Rebate Compound Annual Growth Rate Unless otherwise stated, capital expenditure is presented on an accruals basis and excludes investment
Echo Entertainment Group — FY2014 Earnings Presentation on 6ix